Passage BIO (PASG) risk factors, FY2025 10-K

Risks Related to Our Financial Position and Need for Additional Capital

1. 01We have never generated revenue from product sales and may never achieve or maintain profitability
2. 02Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates

Risks Related to Product Development and Regulatory Approval

1. 03PBFT02 is currently our sole clinical stage product candidate and we may not be able to successfully develop and commercialize PBFT02
2. 04Preclinical and clinical development involve lengthy and expensive processes with uncertain outcomes. We may incur additional expenses or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our current product candidates or any future product candidates
3. 05Success in early preclinical studies or clinical trials may not be indicative of results obtained in later preclinical studies and clinical trials
4. 06Preliminary, topline or interim data from our clinical trials that we or our partners announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
5. 07If we do not achieve our projected development goals in the time-frames we announce and expect, the commercialization of our products may be delayed
6. 08Gene therapy is a novel technology, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval. Currently, only a limited number of gene therapy products have been approved in the United States and in foreign countries
7. 09Our product candidates may cause undesirable and unforeseen side effects, which could delay or prevent their advancement into clinical trials or regulatory approval, limit the commercial potential or result in significant negative consequences
8. 10Adverse public perception of genetic medicines may negatively impact regulatory approval of, and/or demand for, our potential products
9. 11Certain disorders we seek to treat have low incidence and prevalence, and it may be difficult to identify patients with these disorders, which may lead to delays in enrollment for our trials or slower commercial revenue if approved
10. 12Even if we complete the necessary clinical trials, we cannot predict when, or if, we will receive regulatory approval to commercialize a product candidate and the approval may be for a more narrow indication than we seek71% rewritten
11. 13Failure to obtain marketing approval in foreign jurisdictions would prevent our product candidates from being marketed abroad and will limit our ability to realize their full market potential
12. 14We may not be successful in our efforts to build a pipeline of additional product candidates

Risks Related to Our Reliance on Third Parties

1. 15Gemma is a newly-formed company with a limited history of operations. If Gemma is not successful in continuing the development and commercialization of the lysosomal pediatric products that we have licensed to them, we will not receive any downstream economic benefit and the products will revert back to us
2. 16We may in the future enter into third-party collaborations for research, development and commercialization of other therapeutic technologies or product candidates. Biotechnology companies are our likely future collaborators for any marketing, distribution, development, licensing or broader collaboration arrangements
3. 17We may not be successful in finding additional collaborators for continuing development of certain of our product candidates or successfully commercializing or competing in the market for certain indications
4. 18We may have conflicts with our collaborators that could delay or prevent the development or commercialization of our product candidates

Risks Related to Manufacturing

1. 19Gene therapies are novel, complex and difficult to manufacture. We could experience manufacturing problems that result in delays in our development or commercialization programs or otherwise harm our business
2. 20Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay81% rewritten
3. 21Our third-party manufacturers and suppliers use biological materials and may use hazardous materials, and any claims relating to improper handling, storage or disposal of these materials could be time-consuming or costly
4. 22Given the nature of biologics manufacturing, there is a risk of contamination. Any contamination could materially adversely affect our or our third-party vendor’s ability to produce our gene therapies on schedule and could therefore harm our results of operations and cause reputational damage
5. 23We depend on third-party suppliers for materials used in the manufacture of our product candidates, and the loss of these third-party suppliers or their inability to supply us with adequate materials could harm our business

Risks Related to Commercialization

1. 24The commercial success of any of our product candidates will depend upon its degree of market acceptance by physicians, patients, third-party payors and others in the medical community
2. 25If in the future we are unable to establish U.S. or global sales and marketing capabilities or enter into agreements with third parties to sell and market our product candidates, we may not be successful in commercializing our product candidates if they are approved and we may not be able to generate any revenue
3. 26We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success

Risks Related to Intellectual Property

1. 27Additionally, we have options under the Gemma Collaboration Agreement to conduct further research into new CNS indications that may create additional intellectual property
2. 28Similar risks would apply to any patents or patent applications that we may own or in-license in the future
3. 29If we breach our license agreements it could have a material adverse effect on our commercialization efforts for our product candidates
4. 30Our strategy of obtaining rights to key technologies through in-licenses may not be successful
5. 31Third parties may initiate legal proceedings alleging claims of intellectual property infringement, the outcome of which would be uncertain and could have a material adverse effect on the success of our business
6. 32If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed
7. 33Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies and our patent protection could be reduced or eliminated for non-compliance with these requirements
8. 34We may not be able to protect our intellectual property rights throughout the world
9. 35We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming and unsuccessful
10. 36As is the case with other biotechnology companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biotechnology industry involves both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain
11. 37We may be subject to claims asserting that our employees, consultants, advisors or collaborators have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of or other rights to what we regard as our own or licensed intellectual property
12. 38Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time
13. 39Depending upon the timing, duration and specifics of any FDA marketing approval of any product candidates we may develop, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments

Risks Related to Government Regulation

1. 40The pricing, insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate product revenue
2. 41Fast Track Designation by the FDA may not lead to a faster development or regulatory review or approval process
3. 42If we decide to seek Orphan Drug Designation for some of our product candidates, we may be unsuccessful or may be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for supplemental market exclusivity43% rewritten
4. 43If we decide to pursue accelerated approval for any of our product candidates, it may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive marketing approvalNew
5. 44Our product candidates for which we intend to seek approval may face competition from biosimilars approved through an abbreviated regulatory pathway
6. 45There have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs in general and the cost of pharmaceuticals in particular67% rewritten
7. 46amounts that federal and state governments will pay for healthcare products and services or otherwise negatively impact our business modelNew

Risks Related to Employee Matters, Managing Growth and Other Risks Related to Our Business

1. 47Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel
2. 48We may be required to expand our manufacturing, development and regulatory capabilities in the future, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations
3. 49Our internal computer systems, or those of our third-party collaborators or other contractors, may fail or suffer security breaches and cyber-attacks, which could result in a material disruption of our development programs42% rewritten
4. 50Our ability to utilize our net operating loss carryforwards may be subject to limitation
5. 51U.S. federal income tax reform and changes in other tax laws could adversely affect us23% rewritten
6. 52Our employees, principal investigators, CROs and consultants may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading
7. 53Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any product candidates that we may develop

Risks Related to Our Common Stock

1. 54The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for holders of our common stock
2. 55Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain
3. 56If we fail to establish and maintain proper and effective internal control over financial reporting in the future, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, investors’ views of us and, as a result, the value of our common stock
4. 57We will continue to incur increased costs as a result of operating as a public company and our management will continue to be required to devote substantial time to new compliance initiatives44% rewritten
5. 58Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
6. 59We may be subject to securities litigation, which could result in substantial expenses and could divert management attention
7. 60If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline
8. 61We are subject to a variety of privacy and data security laws, and our failure to comply with them could harm our businessNew
9. 62The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR
10. 63Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations26% rewritten
11. 64We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster