Neurogene Inc.
Neurogene Inc.
08/11/2026 | Press release | Distributed by Public on 08/11/2026 14:58
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto included elsewhere in this report and our audited consolidated financial statements and notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 24, 2026 ("Annual Report on Form 10-K"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks, uncertainties, and assumptions. As a result of many factors, including those factors set forth in the section entitled "Risk Factors," our actual results or outcomes, or the timing of our results or outcomes, could differ materially from the results or outcomes described in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled "Risk Factors." You should carefully read the "Cautionary Note About Forward-Looking Statements" and "Risk Factors" sections of the Annual Report on Form 10-K as well as the risk factors included in Part II, Item 1A of this Quarterly Report on Form 10-Q to gain an understanding of the important factors that could cause actual results to differ materially from the results described below.
Forward-looking statements are inherently uncertain and you should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered in connection with any written or oral forward-looking statements that we may issue in the future. Except as required by law, we do not undertake any obligation to revise or update publicly any forward-looking statements after completion of the filing of this Quarterly Report on Form 10-Q to reflect later events or circumstances or to reflect the occurrence of unanticipated events, or otherwise.
In this section, references to "we," "our," "us," and "the Company" refer to post-merger Neurogene Inc. and our wholly owned subsidiary incorporated in the state of Nevada, also named Neurogene Inc. ("Neurogene OpCo"), unless otherwise indicated.
Overview
Despite recent scientific advances in genetics, most neurological diseases, particularly those with devastating consequences to patients, are left untreated. Conventional gene therapy is an attractive potential treatment approach for only a limited number of monogenic diseases due to the challenges caused by the complex biology of neurological diseases and by inherent variable transgene uptake and expression. We are a clinical-stage biotechnology company committed to overcoming these limitations and turning today's complex devastating neurological diseases into treatable conditions. We are building a robust and differentiated product portfolio of genetic medicines for rare neurological diseases with high unmet need not otherwise addressable by conventional gene therapy. One approach we are taking harnesses our proprietary transgene regulation technology, EXACTTM (Expression Attenuation via Construct Tuning), that utilizes microRNA-based genetic circuits designed to deliver therapeutic levels of transgene to key areas of the brain that underlie neurological disease pathology.
Our lead clinical-stage program, NGN-401, is in development for the treatment of Rett syndrome, a severe and progressive neurodevelopmental disease with substantial neurological and physical impairments and significant unmet need. NGN-401 is purposefully designed to utilize the EXACT platform and adeno-associated virus ("AAV") delivery via intracerebroventricular ("ICV") administration, and to deliver the full-length MECP2 gene which preserves the complete set of endogenous regulatory elements to restore functional MeCP2 protein. We believe ICV delivery is the most suitable route of administration to achieve optimal biodistribution in key regions of the brain and other parts of the nervous system that underlie Rett syndrome pathophysiology. We have completed dosing of 25 participants in our ongoing registrational trial of NGN-401, EmboldenTM, a single-arm, open-label, baseline-controlled trial evaluating the 1E15 vg dose of NGN-401 gene therapy in females with Rett syndrome. The Embolden trial is designed to evaluate NGN-401 in females ages three and above with potential to support a broad label in a single study and enable an efficient path to market. Top-line results are expected in the second half of 2027.
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We completed dosing in the Phase 1/2 open-label, multi-center clinical trial evaluating NGN-401 for the treatment of female patients with classic Rett syndrome in the second quarter of 2025. The trial is assessing the safety, tolerability, and efficacy of NGN-401 at a dose of 1E15 vg in eight participants in an ages 4-10 years cohort and two participants in an ages 11 years and older cohort.
In June 2026, we announced positive long-term clinical data from the Phase 1/2 trial with a data cutoff date of June 16, 2026. Across the 10 participants receiving the 1E15 vg dose, 100% improved in Clinical Global Impression-Improvement Scale ("CGI-I") score and gained one or more developmental milestone, consistent with the composite endpoint used to evaluate efficacy in the Embolden registrational trial. Forty-seven total developmental milestones were gained, averaging 4.7 milestones per participant. Participants gained milestones in a progressive, developmentally ordered, stepwise sequence, suggesting a restart of developmental progression. Clinical improvements emerged rapidly, with a median time to first improvement of two months post-treatment. Milestone gains deepened over time, increasing by 95% from 6 to 12 months and by 147% from 6 to ≥12 months. Seven of 10 participants gained ≥2 developmental milestones and demonstrated improvements across ≥2 core Rett syndrome domains, including both pediatric and adolescent/adult participants. Improvement continued through 30 months post-dose, with no plateau observed and no milestones lost.
Participants also experienced clinically meaningful improvements across additional validated Rett syndrome scales, including the Rett Syndrome Gross Motor Scale (RSGMS) and Rett Syndrome Hand Function Scale (RSHFS) (p<0.001).
In the Phase 1/2 trial, all treatment-related adverse events have been mild (Grade 1) or moderate (Grade 2) in severity, and the majority are known potential risks of AAV and have resolved or are resolving, as of the data cutoff date of June 16, 2026.
NGN-401 at the 1E15 vg dose continues to be generally well-tolerated in the Phase 1/2 trial and Embolden, with no cases of hemophagocytic lymphohistiocytosis ("HLH") in any participant at this dose, as of August 10, 2026.
The Phase 1/2 trial previously included a cohort evaluating a 3E15 vg dose of NGN-401. In November 2024, the third participant receiving the 3E15 vg dose died following complications from a rare hyperinflammatory syndrome associated with systemic exposure to high doses of AAV, and we discontinued use of that dose. Hyperinflammatory syndromes can include HLH and multisystem inflammatory syndrome.
Based on research we conducted in 2025 related to hyperinflammatory syndromes and AAV gene therapy, HLH has only been reported following doses of AAV that are generally in the 1E14 vg/kg range or higher. The 1E15 vg dose used in the Phase 1/2 trial and in the Embolden registrational trial translates into the E13 vg/kg range, and we are not aware of any case of HLH ever being reported at this dose. HLH is an acute inflammatory reaction that, if it were to occur, would be expected to happen within days after dosing. Out of an abundance of caution, we incorporated enhanced monitoring into our Phase 1/2 and Embolden protocols for HLH markers, including ferritin, and a treatment algorithm that, when administered early, has been used successfully to treat cases of HLH both in other AAV gene therapies and other known causes of HLH.
In June 2025, we first announced written agreement from the FDA on key elements of the NGN-401 Embolden registrational trial design, and we confirmed these elements and the trial design in September 2025. The primary endpoint is a responder-based composite endpoint that will assess an improvement in CGI-I with Rett syndrome anchors and the gain of a developmental milestone, compared to the participant's own baseline. Responders are defined as participants who attain a CGI-I score less than or equal to three ("minimally improved") and gain any one developmental milestone from a list of 28, as captured through standardized video recordings and independently verified by blinded central raters at the 12-month endpoint. The primary analysis to support the planned BLA is expected to occur after the first 24 participants have completed 12 months of follow-up. A response rate of 33% is the minimum threshold for success to reject the null hypothesis in the Embolden trial. We expect to report top-line data in the second half of 2027, and therefore we do not plan to share data updates from the trial before that time.
Clinical grade NGN-401 manufactured at our fully operational current good manufacturing practices ("cGMP") facility in Houston, Texas was used for dosing in the Phase 1/2 clinical trial and the Embolden trial. We believe that our in-house manufacturing capabilities better enable control of product quality and development timelines, strategic pipeline and financial flexibility, and clinical-to-commercial continuity.
We previously reached alignment with the FDA on our potency assay strategy and chemistry, manufacturing and controls ("CMC") planning for the program. We initiated our Process Performance Qualification ("PPQ") campaign in July 2026 and confirmed our commercial manufacturing scale is the same as our current clinical manufacturing scale, removing the need for comparability studies. We expect to complete the PPQ runs by the end of 2026.
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In February 2026, we announced that NGN-401 received Breakthrough Therapy designation based on the FDA's review of interim efficacy and safety data from the Phase 1/2 trial as of the data cutoff date of October 30, 2025, including patient-level data and supporting video documentation. Breakthrough Therapy designation is intended to expedite the development and review of medicines for the treatment of serious conditions which have shown preliminary clinical evidence indicating the potential for substantial improvement over available therapies on a clinically significant endpoint. The benefits of Breakthrough Therapy designation include eligibility for Priority Review, rolling submission of sections of the BLA and the FDA's organizational commitment to help determine an efficient route to approval.
In March 2025, we announced that NGN-401 received Priority Medicines ("PRIME") designation by the European Medicines Agency ("EMA"). Medicines are eligible for PRIME if they demonstrate the potential to address an unmet medical need by showing a meaningful improvement of clinical outcomes.
In August 2024, we announced that NGN-401 received Regenerative Medicine Advanced Therapy ("RMAT") designation from the FDA. RMAT designation is granted for regenerative medicines intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition, and with preliminary clinical evidence that indicates that the drug has the potential to address unmet medical needs. Benefits of the RMAT designation program include early and frequent communications with FDA senior managers, intensive guidance on efficient drug development and eligibility for an Accelerated Approval pathway and Priority Review.
In June 2024, we announced that NGN-401 was one of four sponsors selected by the Center for Biologics Evaluation and Research at the FDA to participate in the FDA's Support for clinical Trials Advancing Rare disease Therapeutics ("START") pilot program based on potential for clinical benefits and clinical development program readiness. As part of the START program, we have opportunities for enhanced communications with the FDA, with the aim to further accelerate the pace of NGN-401's development. These opportunities are designed to provide frequent advice and regular ad-hoc conversations to address product-specific development issues, including, but not limited to, clinical study design, choice of control group and fine-tuning the choice of patient population.
NGN-401 has also received Orphan Drug designation, Fast Track designation and Rare Pediatric Disease designation from the FDA. NGN-401 also received Orphan designation and Advanced Therapy Medicinal Product designation from the European Medicines Agency (EMA).
We believe that our EXACT platform has broad applicability in complex neurological diseases not otherwise easily addressable by conventional gene therapy. In addition to NGN-401, we are advancing early-stage discovery programs leveraging our EXACT platform for other potential indications. These programs are in the discovery stage, and we have not yet selected a clinical development candidate.
We also pursued a gene therapy program for the treatment of CLN5 Batten disease. We completed enrollment in a Phase 1/2 clinical trial of NGN-101, and in November 2024, we announced that we do not expect to advance the program at this time. Given the rarity of the disease, continued investment in the program was predicated on alignment with the FDA on a streamlined registrational pathway. To support this objective, we submitted an RMAT application, which was denied. We are currently evaluating options for the program.
Consistent with our precision drug delivery approach, we believe in utilizing the most optimal route of administration for our genetic medicines that best targets the underlying pathophysiology and biology of the disease to increase the probability of technical and regulatory success. The pathobiology of Rett syndrome involves structures across the brain and other areas of the nervous system. Therefore, it was critical to us to evaluate the optimal route of administration to achieve broad adeno-associated virus serotype 9 ("AAV9") distribution to key regions relevant for disease. In October 2025, we presented new preclinical data from non-human primates ("NHPs") demonstrating that ICV delivery of NGN-401 achieves superior AAV biodistribution across brain regions relevant to Rett syndrome, compared to intrathecal lumbar ("IT-L") delivery.
The head-to-head NHP study compared ICV and IT-L administration of NGN-401 at a dose that approximates the human dose being evaluated in the NGN-401 Phase 1/2 and Embolden clinical trials (1E15 vg) alongside a dose approximately four times higher than the clinically relevant dose administered via IT-L. ICV administration of NGN-401 showed greater expression of the full-length therapeutic MECP2 transgene mRNA in key brain regions underlying Rett syndrome pathophysiology when compared to the same IT-L administered dose. Similar levels of transgene RNA expression were observed in the lumbar spinal cord between the two delivery methods. Higher transgene RNA expression in key areas of the brain was also observed when ICV was compared to the approximately four times higher dose IT-L cohort. Comparable peripheral exposure of vector genome biodistribution was observed in peripheral organs, including the liver, between equivalent ICV and IT-L doses, consistent with data from intra-CSF administered products.
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These findings are consistent with preclinical data generated by us previously using a different transgene and lower dose as well as other independent laboratories, reinforcing a growing body of evidence that supports ICV delivery for achieving greater expression in the brain.
Background
We were founded in 2018, and have devoted substantially all of our resources to conducting research and development activities and undertaking preclinical studies, establishing our manufacturing facility, conducting clinical trials and the manufacturing of product used in our clinical trials and preclinical studies, business planning, developing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these activities.
Since our inception, we have funded our operations primarily with outside capital (e.g., proceeds from the sale of preferred stock, common stock and pre-funded warrants) and have raised aggregate net proceeds of approximately $692.8 million, including net proceeds of approximately $134.8 million from the July 2, 2026 public offering. See "Liquidity and Capital Resources" for additional information. However, we have incurred significant recurring losses, including a net loss of $65.4 million and $44.7 million for the six months ended June 30, 2026 and 2025, respectively. In addition, as of June 30, 2026, we had an accumulated deficit of $418.1 million and cash, cash equivalents and short-term investments totaling $225.4 million. Following the completion of our July 2, 2026 public offering, we believe our existing cash, cash equivalents and investments will be sufficient to fund our operations into the first quarter of 2029. We may seek additional capital in the future to advance our pipeline, support our operations or pursue strategic opportunities. There can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. If we are unable to raise sufficient additional capital, we may be compelled to consider actions such as reducing the scope of our operations and planned capital expenditures or selling certain assets, including intellectual property assets.
Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on a variety of factors, including the timing, scope and results of our research and development activities. Management expects that our expenses and capital requirements will increase substantially in connection with our ongoing activities as we:
•advance the NGN-401 program through clinical development and, if successful, seek regulatory approvals;
•invest in research programs to strengthen our capabilities, including resourcing and evaluating additional technologies that may augment our pipeline of product candidates;
•advance discovery programs from preclinical development into and through clinical development;
•seek regulatory approvals for any other product candidates that successfully complete clinical trials;
•establish sales, marketing and distribution infrastructure to commercialize any approved product candidates;
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•establish a commercialization infrastructure and scale up internal and external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval;
•expand clinical, scientific, management and administrative teams;
•maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets and know-how;
•implement operational, financial and management systems; and
•incur legal, accounting and other expenses related to operating as a public company.
We do not have any products approved for commercial sale and have not generated any commercial revenue from product sales. Our ability to generate product revenue sufficient to achieve and maintain profitability will depend upon the successful development and eventual commercialization of one or more of our product candidates, which we expect, if it ever occurs, will take many years. We expect to spend a significant amount in development and marketing costs prior to such time. We will therefore require substantial additional capital to develop our product candidates and support our continuing operations. We may never succeed in achieving regulatory and marketing approval for our product candidates. We may obtain unexpected results from our preclinical and clinical trials. For example, in November 2024 we decided not to move forward with the NGN-101 gene therapy program for CLN5 Batten disease, given the rarity of the disease and the lack of a streamlined registrational pathway with the FDA following denial of our RMAT application for that program. We may in the future elect to discontinue, delay, or modify additional preclinical and clinical trials of our other product candidates. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. Accordingly, until such time that we can generate a sufficient amount of revenue from product sales or other sources, if ever, management expects to finance our operations through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. However, we may be unable to raise additional capital from these sources on favorable terms, or at all, which could have a material adverse effect on our business. Our management cannot provide assurance that we will ever generate positive cash flow from operating activities. See "Liquidity and Capital Resources".
In December 2020, we entered into the Master Collaboration Agreement ("MCA") with the University Court of the University of Edinburgh (the "University of Edinburgh"), which was amended in November 2023 to extend the term of the MCA to December 2026. This collaboration supports our pipeline development activities, and provides us with the option to in-license product candidates arising from research conducted in Dr. Stuart Cobb's laboratory. Dr. Cobb serves as our Chief Scientific Officer and is also a Professor at the University of Edinburgh. Under the standard policies of the University of Edinburgh, as a professor inventor, he may be entitled to receive in the future a percentage of certain license-related payments made by us to the University. For more information about the MCA, see "Management's Discussion & Analysis of Financial Condition and Results of Operations-License and Collaboration Agreements".
Impact of Global Economic Events
Uncertainty in the global economy presents significant risks to our business. We are subject to continued risks and uncertainties related to the current macroeconomic environment, including persistent inflation, changing interest rates, changes in foreign currency exchange rates, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, changes in domestic and global monetary and fiscal policy, the enactment of the BIOSECURE Act in December 2025, which mandates a transition away from "biotechnology companies of concern," rapid changes in the regulatory and legislative landscape in the United States, geopolitical factors, including the ongoing conflicts between Russia and Ukraine and in the Middle East and significant volatility in commodity prices, including the price of oil, and the responses thereto, the impacts of climate change, and supply chain disruptions. While management is closely monitoring the impact of the current macroeconomic conditions on aspects of our business, including the impacts on our participants in our Phase 1/2 and Embolden clinical trials, employees, suppliers, vendors and business partners, the ultimate extent of the direct and indirect impacts on our business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside of our control and could exist for an extended period of time. Management will continue to evaluate the nature and extent of the potential impacts to our business, results of operations, liquidity and capital resources. For additional information, see the section entitled "Risk Factors."
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Components of Results of Operations
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates. We expense research and development costs as incurred, including:
•expenses incurred to conduct the necessary discovery-stage laboratory work, preclinical studies and clinical trials required to obtain regulatory approval;
•acquired licenses and intellectual property that are accounted for as asset acquisitions and have no alternative future use;
•personnel expenses, including salaries, benefits and stock-based compensation expense for our employees engaged in research and development functions;
•costs of funding research performed by third parties, including pursuant to agreements with clinical research organizations ("CROs") that conduct our clinical trials, as well as investigative sites, consultants and CROs that conduct our preclinical and nonclinical studies;
•expenses incurred under agreements with our third-party contract development and manufacturing organizations ("CDMOs"), as well as internal manufacturing scale-up expenses, including the cost of acquiring and manufacturing preclinical study and clinical trial materials;
•fees paid to consultants who assist with research and development activities;
•expenses related to regulatory activities, including filing fees paid to regulatory agencies; and
•allocated expenses for facility costs, including rent, utilities, depreciation and maintenance.
Before a product receives regulatory approval, we record upfront and milestone payments to third parties under licensing arrangements as expense, provided that there is no alternative future use of the rights in other research and development projects.
Non-refundable prepayments for research and development costs that are paid in advance of performance are capitalized as a prepaid expense and amortized over the service period as the services are provided. Costs for certain development activities, such as outside research programs funded by us, are recognized based on an evaluation of the progress to completion of specific tasks with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense as applicable.
We track outsourced development costs and other external research and development costs to specific product candidates on a program-by-program basis, including fees paid to CROs, CDMOs and research laboratories in connection with our preclinical development, process development, and clinical development activities. We also incur personnel and other operating expenses for research and development programs, which are presented in aggregate.
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to remain significant over the next several years as we continue patient monitoring activities for our ongoing registrational trial, conduct clinical trials for future product candidates, complete process performance qualification (PPQ) activities, and prepare regulatory filings for our product candidates.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel expenses, including salaries, benefits and stock-based compensation expense, for employees and consultants in executive, finance and accounting, legal, operations support, information technology and human resource functions. General and administrative expenses also include corporate facility costs not otherwise included in research and development expense, including rent, utilities, depreciation and maintenance, as well as legal fees related to intellectual property and corporate matters and fees for accounting and consulting services.
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We expect that our general and administrative expense will increase in the future to support our continued research and development activities and potential commercialization efforts. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, legal support and accountants, among other expenses. If any of our current or future product candidates obtains U.S. regulatory approval, we expect that we would incur significantly increased expenses associated with building a sales and marketing team, as well as an expanded regulatory and compliance function.
Interest Income
Interest income consists primarily of interest earned on our cash, cash equivalents and short-term investments. We expect our interest income to fluctuate depending on interest rates and the amount of cash that is invested.
Income Taxes
We assess our income tax positions and record tax benefits based upon management's evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we record the amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions for which it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements.
Since inception, we have not recorded any income tax benefits for net operating losses ("NOLs") or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our NOLs and tax credits will not be realized. Accordingly, we have established a valuation allowance against such deferred tax assets for all periods since inception.
As of December 31, 2025, we had federal and state NOL carryforwards in the amount of $372.2 million and $43.5 million, respectively, which may be available to offset future taxable income. The state NOL carryforwards will begin to expire in 2029, unless previously utilized. Most federal NOL carryforwards were generated subsequent to January 1, 2018, and therefore are able to be carried forward indefinitely. As of December 31, 2025, we also had federal research tax credit and federal orphan drug tax credit carryforwards of $8.5 million and $10.0 million, respectively, which may be used to offset future tax liabilities. These tax and orphan drug credit carryforwards begin to expire in 2039 and 2043, respectively, unless previously utilized.
Results of Operations
Comparison of the Three and Six Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations for the periods indicated (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 |
Change
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2026 | 2025 | Change | ||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Research and development expenses | $ | 25,468 | $ | 19,366 | $ | 6,102 | $ | 50,618 | $ | 37,131 | $ | 13,487 | |||||||||||||||||||||||
| General and administrative expenses | 11,202 | 6,715 | 4,487 | 19,401 | 14,869 | 4,532 | |||||||||||||||||||||||||||||
| Total operating expenses | 36,670 | 26,081 | 10,589 | 70,019 | 52,000 | 18,019 | |||||||||||||||||||||||||||||
| Loss from operations | (36,670) | (26,081) | (10,589) | (70,019) | (52,000) | (18,019) | |||||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||
| Interest income | 2,046 | 2,928 | (882) | 4,307 | 6,134 | (1,827) | |||||||||||||||||||||||||||||
| Interest expense | - | (1) | 1 | (1) | (3) | 2 | |||||||||||||||||||||||||||||
| Other income | 143 | 1,212 | (1,069) | 307 | 1,360 | (1,053) | |||||||||||||||||||||||||||||
| Other expense | (7) | (74) | 67 | (16) | (154) | 138 | |||||||||||||||||||||||||||||
| Net loss | $ | (34,488) | $ | (22,016) | $ | (12,472) | $ | (65,422) | $ | (44,663) | $ | (20,759) | |||||||||||||||||||||||
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Research and Development Expenses
The following table summarizes our research and development expenses for the periods indicated (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||||
| Program specific expenses: | |||||||||||||||||||||||||||||||||||
| Rett syndrome | $ | 9,890 | $ | 7,052 | $ | 2,838 | $ | 20,927 | $ | 11,576 | $ | 9,351 | |||||||||||||||||||||||
| Batten disease | 60 | 401 | (341) | 238 | 1,246 | (1,008) | |||||||||||||||||||||||||||||
| Early Discovery | 675 | 720 | (45) | 1,288 | 2,007 | (719) | |||||||||||||||||||||||||||||
| Unallocated internal expenses: | |||||||||||||||||||||||||||||||||||
| Personnel-related | 5,990 | 5,125 | 865 | 12,446 | 10,529 | 1,917 | |||||||||||||||||||||||||||||
| Stock-based compensation | 2,688 | 1,575 | 1,113 | 4,479 | 3,146 | 1,333 | |||||||||||||||||||||||||||||
| Manufacturing | 4,876 | 3,635 | 1,241 | 9,073 | 6,742 | 2,331 | |||||||||||||||||||||||||||||
| Other | 1,289 | 858 | 431 | 2,167 | 1,885 | 282 | |||||||||||||||||||||||||||||
| Total research and development expenses | $ | 25,468 | $ | 19,366 | $ | 6,102 | $ | 50,618 | $ | 37,131 | $ | 13,487 | |||||||||||||||||||||||
Research and development expenses were $25.5 million for the three months ended June 30, 2026, as compared to $19.4 million for the three months ended June 30, 2025.
Expenses related to the Rett syndrome program increased primarily due to a $2.9 million increase in clinical trial costs related to the ongoing registrational clinical trial for NGN-401 and a $0.7 million increase in CMC costs primarily related to CDMO support and PPQ runs for NGN-401, partially offset by a $0.6 million decrease in preclinical costs. The decrease in expenses related to the Batten disease program was primarily driven by a $0.3 million decrease in clinical trial costs for the Phase 1/2 clinical trial of NGN-101, due to the de-prioritization of the program.
The increase in unallocated internal expenses was primarily driven by higher salaries, benefits, and stock-based compensation costs due to an increase in research and development headcount, as well as an increase in laboratory consumables expense related to CMC.
Research and development expenses were $50.6 million for the six months ended June 30, 2026, as compared to $37.1 million for the six months ended June 30, 2025.
Expenses related to the Rett syndrome program increased primarily due to an $8.0 million increase in clinical trial costs related to the ongoing registrational clinical trial for NGN-401 and a $3.1 million increase in CMC costs primarily related to CDMO support and PPQ manufacturing runs for NGN-401, partially offset by a $1.6 million decrease in preclinical costs. The decrease in expenses related to the Batten disease program was primarily driven by a $1.0 million decrease in clinical trial costs for the Phase 1/2 clinical trial of NGN-101, due to the de-prioritization of the program. The decrease in expenses related to the Early Discovery programs was driven by a $0.7 million decrease in preclinical development costs.
The increase in unallocated internal expenses was primarily driven by higher salaries, benefits, and stock-based compensation costs due to an increase in research and development headcount, as well as an increase in laboratory consumables expense related to CMC.
We expect that our research and development expenses will continue to increase for the foreseeable future as we advance our programs and product candidates into and through clinical development and, as we continue to develop additional product candidates, build our manufacturing capabilities and develop our EXACT technology.
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General and Administrative Expenses
The following table summarizes our general and administrative expenses for the periods indicated (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||||
| General and administrative specific expenses: | |||||||||||||||||||||||||||||||||||
| Personnel-related | $ | 2,785 | $ | 2,212 | $ | 573 | $ | 5,411 | $ | 4,696 | $ | 715 | |||||||||||||||||||||||
| Stock-based compensation | 5,172 | 1,833 | 3,339 | 7,010 | 4,310 | 2,700 | |||||||||||||||||||||||||||||
| Professional and consultant fees | 1,233 | 970 | 263 | 2,635 | 2,247 | 388 | |||||||||||||||||||||||||||||
| Office-related | 496 | 620 | (124) | 1,106 | 1,252 | (146) | |||||||||||||||||||||||||||||
| Other | 1,516 | 1,080 | 436 | 3,239 | 2,364 | 875 | |||||||||||||||||||||||||||||
| Total general and administrative expenses | $ | 11,202 | $ | 6,715 | $ | 4,487 | $ | 19,401 | $ | 14,869 | $ | 4,532 | |||||||||||||||||||||||
General and administrative expenses were $11.2 million for the three months ended June 30, 2026, as compared to $6.7 million for the three months ended June 30, 2025. The increase was primarily attributable to: (i) a $3.3 million increase in stock-based compensation expense, driven by an increase in headcount as well as by an increase of approximately $2.7 million related to PSU expense as the second underlying performance condition was deemed probable of achievement and currently considered probable to vest, (ii) a $0.6 million increase in personnel-related expenses, reflecting higher headcount to support business operations, (iii) a $0.4 million increase in other expenses, primarily related to higher corporate costs and pre-commercial activities, and (iv) a $0.3 million increase in professional and consultant fees. The increase was partially offset by a $0.1 million decrease in office-related expense.
General and administrative expenses were $19.4 million for the six months ended June 30, 2026, as compared to $14.9 million for the six months ended June 30, 2025. The increase was primarily attributable to: (i) a $2.7 million increase in stock-based compensation expense, driven by an increase in headcount as well as by an increase of approximately $1.8 million related to PSU expense as the second underlying performance condition was deemed probable of achievement and currently considered probable to vest, (ii) a $0.9 million increase in other expenses, primarily related to higher corporate costs and pre-commercial activities, (iii) a $0.7 million increase in personnel-related expenses, reflecting higher headcount to support business operations and (iv) a $0.4 million increase in professional and consultant fees. These increases were partially offset by a $0.1 million decrease in office-related expense.
We expect general and administrative expenses to increase in future periods as we continue to scale our operations.
Interest Income
Interest income decreased by $0.9 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The decrease was primarily due to a decrease in short-term investments and lower yields on cash, cash equivalents, and short-term investment balances.
Interest income decreased by $1.8 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The decrease was primarily due to a decrease in short-term investments and lower yields on cash, cash equivalents, and short-term investment balances.
Other Income
Other income decreased $1.1 million for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025, respectively. The decrease was primarily due to refunds received in 2025 attributable to (i) approximately $0.4 million in Washington state sales tax refunds receivable and (ii) approximately $0.7 million of New York state tax refunds received for the prior period amended returns.
Other Expenses
The change in other expenses was not material for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025 respectively.
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Liquidity and Capital Resources
Sources of Liquidity
Since inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates. We expect that our research and development and general and administrative costs will continue to increase significantly, including in connection with conducting clinical trials and manufacturing for our product candidates to support commercialization and providing general and administrative support for our operations, including the costs associated with operating as a public company. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. We believe that our existing capital resources will be sufficient to fund our operations through at least 12 months following the filing date of this Form 10-Q. See the section entitled "Risk Factors" in this Quarterly Report on Form 10-Q for additional risks associated with our substantial capital requirements.
As of June 30, 2026, we had cash, cash equivalents and short-term investments totaling $225.4 million. Since inception, we have funded our operations primarily with outside capital (e.g., proceeds from the sale of preferred stock, common stock and pre-funded warrants) and have raised aggregate net proceeds of approximately $692.8 million, including net proceeds of approximately $134.8 million from the July 2, 2026, public offering described below.
In August 2025, we entered into an at-the-market sales agreement (the "Sales Agreement" with Leerink Partners, LLC ("Leerink") as sales agent, pursuant to which we may offer and sell, from time to time, shares of our common stock with an aggregate price up to $150.0 million through Leerink (the "ATM facility"). As of June 30, 2026, $112.9 million remained available for sale under the Sales Agreement.
In July 2026, we issued and sold an aggregate of 4,124,999 shares of our common stock (inclusive of 624,999 shares of common stock pursuant to the exercise in full of the underwriters' option to purchase additional shares) at a public offering price of $30.00 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to 666,666 shares of our common stock at a public offering price of $29.999999 per pre-funded warrant (the "July 2026 Offering"). We received aggregate proceeds of approximately $143.8 million, or approximately $134.8 million after deducting the underwriters' discount and commissions and estimated offering expenses.
After giving effect to the July 2026 Offering, we had approximately $360.2 million of cash, cash equivalents and short-term investments. Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments should be sufficient to fund our operations into the first quarter of 2029. For more information see "Risk Factors."
We intend to use the net proceeds from the July 2026 Offering, together with our existing cash, cash equivalents and short-term investments, to fund the ongoing clinical development of NGN-401, pre-commercial activities for NGN-401 and for working capital and other general corporate purposes.
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Future Capital Requirements
In order to complete the development of our product candidates and to build the sales, marketing and distribution infrastructure that management believes will be necessary to commercialize product candidates, if approved, we will require substantial additional capital. Accordingly, until such time as we can generate a sufficient amount of revenue from product sales or other sources, if ever, management expects to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, including restricting our operations and limiting our ability to incur liens, issue additional debt, pay dividends, repurchase our own common stock, make certain investments or engage in merger, consolidation, licensing, or asset sale transactions. If we raise capital through collaborations, partnerships, and other similar arrangements with third parties, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional capital from these sources on favorable terms, or at all. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from macroeconomic conditions, geopolitical instability, government regulation and otherwise. The failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including by requiring us to delay, reduce or curtail our research, product development or future commercialization efforts. We may also be required to license rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. Management cannot provide assurance that we will ever generate positive cash flow from operating activities.
In order to continue our operations, we must achieve profitable operations and/or obtain additional equity or debt financing. Until we achieve profitability, management plans to fund our operations and capital expenditures with cash on hand and the sale and issuance of securities. We may not be successful in raising additional capital and such capital, if available, may not be on terms that are acceptable to us.
We have incurred, and expect to continue to incur, additional costs associated with operating as a public company. In addition, we anticipate that we will need substantial additional funding in connection with our continuing operations. Management bases its projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than management expects.
Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount and timing of our capital requirements. Our future funding requirements will depend on many factors, including:
•the scope, timing, progress, results, and costs of researching and developing genetic medicines, and conducting larger and later-stage clinical trials;
•the scope, timing, progress, results, and costs of researching and developing other product candidates that we may pursue;
•the costs, timing, and outcome of regulatory review of our product candidates;
•the costs of future activities, including product sales, medical affairs, marketing, manufacturing, and distribution, for any of our product candidates for which we receive marketing approval;
•the costs of manufacturing commercial-grade products and sufficient inventory to support commercial launch;
•the revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;
•the cost and timing of attracting, hiring, and retaining skilled personnel to support our operations and continued growth;
•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
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•Our ability to establish, maintain, and derive value from collaborations, partnerships or other marketing, distribution, licensing, or other strategic arrangements with third parties on favorable terms, if at all;
•the extent to which we acquire or in-license other product candidates and technologies, if any; and
•the costs associated with operating as a public company.
A change in the outcome of any of these or other factors with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we may need additional capital to meet the capital requirements associated with such operating plans.
Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
|
Six Months Ended June 30, |
|||||||||||
| 2026 | 2025 | ||||||||||
| Net cash used in operating activities | $ | (49,880) | $ | (40,236) | |||||||
| Net cash provided by (used in) investing activities | 52,344 | (37,595) | |||||||||
| Net cash provided by financing activities | 6,176 | 58 | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 8,640 | $ | (77,773) | |||||||
Cash Flows from Operating Activities
For the six months ended June 30, 2026, we used $49.9 million of cash in operating activities. Cash used in operating activities reflected our net loss of $65.4 million, a $3.4 million decrease in our net operating assets and non-cash charges of $12.2 million, which consisted primarily of $11.5 million of stock-based compensation, $1.7 million in depreciation and impairment expense and $0.4 million in non-cash operating lease expense partially offset by $0.7 million in accretion on the held-to-maturity investments and $0.7 million change in the contingent value rights liability. The primary use of cash was to fund our operations related to the development of our product candidates.
For the six months ended June 30, 2025, we used $40.2 million of cash in operating activities. Cash used in operating activities reflected our net loss of $44.7 million, a $1.8 million net increase in our operating assets and liabilities, and non-cash charges of $6.2 million, which consisted primarily of $7.5 million in stock-based compensation, $1.5 million in depreciation and $0.4 million in non-cash operating lease expense, partially offset by $3.2 million in accretion on the held-to-maturity investments. The primary use of cash was to fund our operations related to the development of our product candidates.
Cash Flows from Investing Activities
For the six months ended June 30, 2026, net cash flows provided by investing activities consisted of proceeds from maturities of short-term investments of $249.1 million, partially offset by purchases of short-term investments of $196.2 million and purchases of property and equipment of $0.6 million.
For the six months ended June 30, 2025, net cash flows used in investing activities consisted of purchases of short-term investments of $149.4 million and purchases of property and equipment of $0.9 million, partially offset by proceeds from maturities of short-term investments of $112.7 million.
Cash Flows from Financing Activities
For the six months ended June 30, 2026, net cash flows provided by financing activities primarily consisted of $5.9 million in net proceeds from open market sales of common stock pursuant to the at-the-market (ATM) sales agreement with Leerink Partners, LLC, $0.2 million from the exercise of stock options and $0.1 million from the proceeds from issuance of common stock under the 2023 Employee Stock Purchase Plan. As of June 30, 2026, the remaining amount authorized for sale under the ATM sales agreement was $112.9 million.
For the six months ended June 30, 2025, net cash flows provided by financing activities were insignificant.
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Contractual Obligations and Commitments
Lease Obligations
New York Headquarters Lease
We sub-lease approximately 6,000 square feet of office space for our corporate headquarters in New York, New York. In November 2025, we extended the lease by an additional 19 months at a lower cost per square foot which now expires in January 2028.
Houston Lease
We lease 42,342 square feet for a manufacturing facility in Houston, Texas. The lease expires in August 2029. We have the option to renew the lease term for two additional five-year terms. The renewal periods were not included in the lease term for purposes of determining the lease liability or right-of-use asset.
Blaine Lease in Seattle
We lease approximately 33,300 square feet of office space in Seattle, Washington, that was previously used by Neoleukin for offices, a laboratory for research and development, and related uses. The lease expires on February 1, 2029, with the option to extend the lease for two additional five-year terms. The renewal periods were not included in the lease term for purposes of determining the lease liability.
Eastlake Lease in Seattle
We lease approximately 6,272 square feet of office space in Seattle, Washington, that was previously used by Neoleukin for additional office and laboratory space for research and development and related uses (the "Eastlake Lease"). The lease expires on September 30, 2026. We also assumed the existing agreement to sublease the Eastlake Lease to an unrelated third party ("Eastlake Sublease"). Pursuant to the terms of the Eastlake Sublease, we are entitled to receive a total of approximately $1.6 million in lease payments. The term of the sublease is through September 30, 2026.
Lease CVR
Each contingent value right ("CVR") distributed pursuant to the CVR Licensing Agreement, dated December 18, 2023, by and between us and the rights agent (the "CVR Agreement") contains the contractual right to receive certain net savings, if any, realized by June 30, 2029 in connection with certain legacy lease obligations related to our business prior to the reverse merger with Neoleukin (the "Lease CVR"). As of June 30, 2026, approximately $0.4 million was recorded as a component of the contingent value rights liability arising from the Lease CVR on our condensed consolidated balance sheet. The commitment relates to Neoleukin's sublease agreement, effective October 31, 2023, for one of its properties with an unrelated third party for the remainder of the lease term. For more information on the Lease CVR, see Note 9, Commitments and Contingencies-Lease CVR, in the notes to the financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Intellectual Property CVR
The December 2023 CVR Licensing Agreement and April 2024 CVR Licensing Agreement collectively account for the total Intellectual Property CVR. As of June 30, 2026, no other development and sales milestones were achieved nor deemed probable of achievement under the December 2023 CVR Licensing Agreement. For more information on the Intellectual Property CVR, see Note 9, Commitments and Contingencies-Intellectual Property CVR, in the notes to the financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
The following table summarizes the components of the contingent value rights liability as of June 30, 2026 and December 31, 2025 (in thousands):
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Current | Non-Current | Current | Non-Current | ||||||||||||||||||||
| Lease CVR | $ | - | $ | 407 | $ | 312 | $ | 428 | |||||||||||||||
| Intellectual Property CVR | - | - | 326 | - | |||||||||||||||||||
| Total CVR liability | $ | - | $ | 407 | $ | 638 | $ | 428 | |||||||||||||||
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Research and Development and Manufacturing Agreements
We enter into agreements with certain vendors for the provision of goods and services, which includes manufacturing services with contract development and manufacturing organizations and development and clinical trial services with CROs. These agreements may include certain provisions for purchase obligations and termination obligations that could require payments for the cancellation of committed purchase obligations or for early termination of the agreements. The amount of the cancellation or termination payments vary and are based on the timing of the cancellation or termination and the specific terms of the agreement. These obligations and commitments are not presented separately.
License and Collaboration Agreements
Master Collaboration Agreement with The University of Edinburgh
In December 2020, we entered into a Master Collaboration Agreement (the "MCA") with the University Court of the University of Edinburgh (the "University of Edinburgh"). Under the MCA, we and the University of Edinburgh agreed to collaborate on certain research and development projects ("Projects"), and we agreed to provide funding for such Projects for a 40-month initial term, which was extended in November 2023 for an additional 33 months and may be further extended by mutual agreement. Under the MCA, we are obligated to pay semi-annual installment payments relating to funding of costs for personnel and lab consumables for the duration of the MCA. Either party may terminate the MCA for convenience upon 90 days' notice. If we were to terminate the MCA, we would be responsible for all non-cancellable costs and commitments related to any particular Project and any and all funding costs for any person working on such Project.
License Agreement with The University of Edinburgh
In March 2022, we exercised our option under the MCA with respect to certain Projects and entered into a License Agreement with the University of Edinburgh (the "March 2022 Edinburgh License Agreement"), pursuant to which we licensed certain patents and know-how related to the EXACT technology and optimized MECP2 cassettes on an exclusive basis. Under the March 2022 Edinburgh License Agreement, we obtained an exclusive, worldwide license to the licensed patents to develop, manufacture, supply, sell, and commercialize any products that utilize the licensed patents (the "Licensed Products") in exchange for low single-digit percentage royalties on future commercial net sales of the Licensed Products. Royalties are payable on a Licensed Product-by-Licensed Product and country-by-country basis until the later of the expiration of the last licensed patent covering such Licensed Product in the country where the Licensed Product is sold, or, if no licensed patent exists or has expired in such country, then 10 years from first commercial sale of such Licensed Product in such country (the "Royalty Term"). The term of the March 2022 Edinburgh License Agreement continues until the end of the Royalty Term and the expiration of all of the payment obligations under that license. We may terminate the March 2022 Edinburgh License Agreement for convenience upon 90 days' notice. In connection with the license, we are also obligated to pay the University of Edinburgh up to $5.3 million in regulatory-related milestones, of which $0.3 million has been paid in connection with the Phase 1/2 study. The remaining regulatory milestone payments consist of $2.0 million payable upon achievement of the first regulatory approval (FDA or EMA) and $3.0 million payable upon achievement of the second regulatory approval (FDA or EMA). In addition, we may be obligated to make up to $25.0 million of sales-related milestone payments based on annual net sales of Licensed Products in excess of defined thresholds.
License Agreement with Virovek
In September 2020, we entered into a Non-Exclusive License Agreement with Virovek, Inc., pursuant to which we have a license to use certain patents and know-how on a non-exclusive basis related to our baculovirus process in exchange for low single-digit percentage royalties on future commercial net sales of each product using the baculovirus process, development milestone payments of up to $0.2 million in the aggregate, and a nonrefundable annual license fee. This agreement continues until the later of (i) the expiration of the last to expire patent right that covers the manufacture, use, offer for sale, sale, importation, export or supply of any licensed product, (ii) ten years after the first commercial sale of any licensed product, or (iii) the expiration of all regulatory or market exclusivities. We may terminate this agreement for convenience upon 60 days' notice.
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License Agreement with Sigma-Aldrich Co
In January 2023, we entered into a Non-Exclusive License Agreement with Sigma-Aldrich Co. LLC, pursuant to which we have a license to certain patents and know-how on a non-exclusive basis related to certain cell lines used in our baculovirus process in exchange for a small annual fee on a product-by-product basis, payable once the first product candidate entered the clinic. In addition, on a product-by-product basis, we are obligated to pay up to $2.5 million in the aggregate for development-related milestones. This agreement remains in force for as long as we continue to possess and use the licensed technology. We may terminate this agreement for convenience upon 60 days' notice.
License Agreement with Stanford
In August 2024, we entered into a Non-Exclusive License Agreement with the Board of Trustees of Leland Stanford Junior University (the "Stanford License Agreement") to license, on a non-exclusive basis, certain biological materials used in the manufacturing process of our product candidates, including NGN-401. Over the 10-year term of the Stanford License Agreement, we are obligated to pay an annual license maintenance fee. We may terminate this agreement for convenience upon 30 days' notice.
Off-Balance Sheet Arrangements
We currently do not have, and did not have during the periods presented, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Critical Accounting Policies and Significant Judgments and Estimates
Our financial statements are prepared in accordance with U.S. GAAP. The preparation of the financial statements and related disclosures requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management evaluates estimates and assumptions on a periodic basis. Our actual results may differ from these estimates. A summary of our significant accounting policies is presented in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our significant accounting policies during the six months ended June 30, 2026.
Recent Accounting Pronouncements
See Note 3, Summary of Significant Accounting Policies-Recently Issued Accounting Standards in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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