Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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 together with our financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (this "report"). This discussion and analysis and other parts of this report contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives, expectations, forecasts and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under the section titled "Risk Factors" and elsewhere in this report.

Overview

We are a leading late-stage biotechnology company advancing durable and disease-targeted therapeutics with potential to transform treatment paradigms and provide unprecedented benefits to patients. Our core pipeline focus is advancing 4D-150 for the treatment of wet AMD and DME through late-stage studies and 4D-710 for treatment of cystic fibrosis through early-stage studies. We believe these product candidates are differentiated and can support meaningful near-term and long-term value generation.

In January 2025, we implemented a strategic pipeline prioritization designed to prioritize the development of 4D-150 and 4D-710. Further, we will be seeking strategic alternatives, including potential partnering, for our other clinical stage product candidates: 4D-175 for the treatment of geographic atrophy and 4D-725 for the treatment of alpha-1 antitrypsin deficiency. In addition, we terminated the development of 4D-110 for the treatment of choroideremia and 4D-125 for the treatment of X-linked retinitis pigmentosa.

Our lead product candidate 4D-150 utilizes our proprietary R100 vector and a transgene cassette encoding aflibercept and inhibitory miRNA targeting vascular endothelial growth factor-C ("VEGF-C"). 4D-150 was designed to become the first backbone therapy for the treatment of retinal vascular diseases by providing multi-year sustained production of anti-VEGF from the retina with a single, safe, intravitreal injection, substantially reducing treatment burden and improving long-term patient outcomes. 4D-150 is initially being developed for the treatment of wet age-related macular degeneration ("wet AMD") and diabetic macular edema ("DME").

In March 2025, we announced the first patients enrolled in 4FRONT-1, our North American Phase 3 clinical trial evaluating 4D-150 for the treatment of wet AMD. In October 2025, we announced that enrollment was exceeding initial projections with more than 200 patients enrolled, reflecting continued strong engagement and enthusiasm from investigators and patients. We expect 52-week topline data in the first half of 2027, an acceleration of the timeline from the previous guidance to the second half of 2027.

Additionally, 4FRONT-2, our second Phase 3 trial of 4D-150 in wet AMD, was initiated in June 2025, ahead of schedule. 4FRONT-2 is a global clinical trial and has an identical design to 4FRONT-1, except for enrolling both treatment naïve and recently diagnosed, treatment-experienced patients. We expect 52-week topline data for 4FRONT-2 in the second half of 2027.

In November 2025, we announced positive long-term interim results from the ongoing 4D-150 PRISM Phase 1/2 clinical trial in wet AMD. 4D-150 demonstrated consistent and durable benefit across all three patient cohorts as evidenced by maintenance of visual acuity, control of retinal anatomy and reduction of treatment burden at all time points with 1.5 to 2 years of follow-up. In addition, a consistent dose response was observed between 3E10 vg/eye, the selected Phase 3 dose, and the lower dose of 1E10 vg/eye. The Phase 3 dose achieved clinically meaningful reductions in treatment burden. No new cases of intraocular inflammation were reported during this follow-up period with up to approximately 3.5 years of follow-up.

In July 2025, we presented positive 60-week results from the 4D-150 SPECTRA clinical trial in DME where 4D-150 continued to be well tolerated with no intraocular inflammation observed at any timepoint or dose level. In addition, 4D-150 demonstrated durable and dose-dependent clinical activity with sustained gains in visual acuity and anatomic control between 3E10 vg/eye, the selected Phase 3 dose, and lower doses. The Phase 3 dose achieved clinically meaningful 78% reduction in treatment burden vs. projected on-label aflibercept 2mg Q8W. The FDA and EMA are aligned on a proposed single Phase 3 clinical trial being acceptable for possible future licensure for 4D-150 in DME.

In October 2025, we entered into a Collaboration and License Agreement with Otsuka Pharmaceutical Co., Ltd., pursuant to which we granted Otsuka exclusive rights to develop and commercialize 4D-150 for ophthalmological diseases, including wet AMD and DME, in Japan, China, Australia, and other APAC markets. Otsuka has agreed to lead all regulatory and commercialization activities in its licensed territories. We have agreed to continue to lead all Phase 3 clinical activity globally, including within the APAC region. Otsuka has agreed to provide an upfront cash payment of $85 million and certain cost sharing for global development activities. In addition, we are eligible for up to $335.5 million in potential regulatory and commercial milestone payments and tiered double-digit royalties depending on net sales in Otsuka's licensed territories. We retain full development and commercialization rights for 4D-150 outside the APAC region, including the United States, Latin America, and Europe.

Our second priority product candidate is 4D-710, which we believe is the first known genetic medicine to demonstrate successful delivery and expression of the CFTR transgene in the lungs of people with cystic fibrosis (CF). We believe these results will translate into durable clinical improvements in people with CF, including improved lung function and quality of life. In October 2025, we announced a funding agreement with the Cystic Fibrosis Foundation ("CFF") to provide up to $11 million in additional funding, including $7.5 million in an initial tranche, which was completed in October 2025. The proceeds of this funding agreement enabled the start of the Phase 2 stage of the AEROW clinical trial, redosing, and Phase 3 readiness activities. We expect to provide an interim data update from the ongoing Phase 1 stage of the AEROW clinical trial and a program update by year end 2025. 

We have funded our operations primarily through the sale and issuance of equity securities and to a lesser extent from cash received pursuant to our collaboration and license agreements.

In November 2025, we completed an underwritten offering (the "2025 Offering") in which 8,385,809 shares of our common stock were sold at an offering price of $10.51 per share, as well as pre-funded warrants to purchase 1,128,949 shares of our common stock at an offering price of $10.5099 per underlying share pursuant to an effective Registration Statement on Form S-3. The net proceeds from the 2025 Offering were approximately $93.3 million, after deducting the underwriting discounts and commissions and other estimated offering expenses.

We have incurred significant operating losses. Our net losses were $56.9 million and $43.8 million for the three months ended September 30, 2025 and 2024, respectively, and $159.5 million and $111.2 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $735.7 million. We do not expect positive cash flows from operations in the foreseeable future. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

We do not have any products approved for sale and have not generated any revenue from product sales since our inception. Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates, if approved.

We will require substantial additional funding to support our continuing operations and further the development of our product candidates. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, which could include income from collaborations, strategic partnerships, or other

strategic arrangements, for the foreseeable future. Adequate funding may not be available when needed or on terms acceptable to us, or at all. Our ability to raise additional funds 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 conflicts in the Middle East, the lingering impact of the COVID-19 pandemic, the war in Ukraine, rising interest rates, tariffs, inflation, government shutdowns and otherwise. If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

Restructuring and Other Charges

On July 2, 2025, we announced a workforce reduction of approximately 25% of current and planned roles, primarily in the areas supporting early-stage research and development and support functions to implement a strategic pipeline prioritization to focus on the development of 4D-150 and 4D-710. In connection with the work force reduction, the Company incurred total expense of $3.2 million and paid cash expenses of approximately $3.0 million including severance, benefits and related termination costs in the third quarter of 2025. There are no future payments in connection with the workforce reduction. The workforce reduction is expected to provide annual cash compensation cost savings of approximately $15 million and offsets additional expenses expected based on the accelerated timelines for the 4FRONT clinical trials and BLA filing.

Components of Results of Operations

Revenue

Our revenue to date has been generated through payments from our collaboration and license agreements, primarily from upfront and milestone payments and expense reimbursement. We have not generated any revenue from the sale of approved products and do not expect to do so for the foreseeable future.

Future collaboration and license revenue is highly dependent on the successful development and commercialization of products by our collaboration partners, which is uncertain, and revenue may fluctuate significantly from period to period. Additionally, we may never receive the consideration from our license agreements that is contemplated for option fees, development and sales-based milestone payments or royalties on sales of licensed products, given the contingent nature of these payments.

Operating Expenses

Research and Development

Our research and development expenses primarily consist of costs incurred for the discovery and preclinical and clinical development of our product candidates. These expenses include salaries and personnel-related costs, including stock-based compensation of our clinical, medical, chemistry, manufacturing and controls and scientific personnel performing research and development activities; laboratory supplies; research materials; fees paid to CROs to execute preclinical studies and clinical trials; fees paid to CMOs to manufacture materials for preclinical studies and clinical trials; fees related to obtaining technology licenses; consulting costs; costs related to seeking regulatory approval of our product candidates; and allocated facility-related costs, information technology costs, depreciation expense, and other overhead.

We expense all research and development costs in the periods in which they are incurred. We have entered into various agreements with CROs and CMOs. Costs of certain activities are recognized based

on an evaluation of the progress to completion of specific tasks. Payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses and other current assets on our balance sheet. The capitalized amounts are recognized as expense as the goods are delivered or the related services are performed.

We do not allocate our costs by product candidate, as a significant amount of research and development expenses includes internal costs, such as salary and other personnel-related expenses, laboratory supplies and allocated overhead, and external costs, such as fees paid to third parties to conduct research and development activities on our behalf, none of which are tracked by product candidate. In particular, with respect to internal costs, several of our departments support multiple product candidate research and development programs and, therefore, the costs cannot be allocated to a particular product candidate or development program.

At this time, we cannot reasonably estimate or know the nature, timing or estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. However, we expect our overall research and development expenses to increase in the near term primarily for 4D-150 Phase 3 studies in wet AMD and DME. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. See the section titled "Risk Factors" for additional risks regarding regulatory development and approval.

General and Administrative

Our general and administrative expenses consist primarily of personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expense for our personnel in executive, finance and accounting, legal, human resources, business development, and other administrative functions. General and administrative expenses also include professional fees for legal, patent, consulting, accounting and tax services, allocated overhead, including rent, equipment, depreciation, information technology costs and utilities, and other general operating expenses not otherwise classified as research and development expenses.

We expect our general and administrative expenses to remain relatively stable in the near term as a result of operational streamlining while maintaining patents for our product candidates, consulting, legal and accounting services associated with maintaining compliance with stock exchange listing and requirements of the SEC, investor relations costs, director and officer insurance premiums, and other costs associated with being a public company.

Other Income, Net

Our other income, net primarily consists of interest income earned on our cash equivalents and marketable securities and adjustments for the change in the fair value of our derivative liability which must be remeasured at each reporting date.

Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

The following tables summarize our results of operations for the periods indicated (dollars in thousands):

Revenue

Revenue increased by $0.1 million from the three months ended September 30, 2024 to the three months ended September 30, 2025, and increased by $0.1 million from the nine months ended September 30, 2024 to the nine months ended September 30, 2025. Revenue for both periods was from CFF.

Research and Development Expenses

The following table provides a breakout of research and development expenses for the periods indicated (dollars in thousands):

Research and development expenses increased by $10.9 million, or 28%, from the three months ended September 30, 2024 to the three months ended September 30, 2025. The increase was primarily due to the following:

Research and development expenses increased by $39.9 million, or 41%, from the nine months ended September 30, 2024 to the nine months ended September 30, 2025. The increase was primarily due to the following:

General and Administrative Expenses

General and administrative expenses decreased by $0.8 million, or 6%, from the three months ended September 30, 2024 to the three months ended September 30, 2025. The decrease was primarily due to decreased headcount of general and administrative personnel.

General and administrative expenses increased by $2.7 million, or 8%, from the nine months ended September 30, 2024 to the nine months ended September 30, 2025. The increase was primarily due to an increase in legal fees and consulting services.

Other Income, Net

Other income, net, decreased by $3.0 million, or 41%, from the three months ended September 30, 2024 to the three months ended September 30, 2025. Other income, net, decreased by $5.8 million, or

28%, from the nine months ended September 30, 2024 to the nine months ended September 30, 2025. The decrease is attributable to lower balances of cash equivalents and marketable securities.

Liquidity and Capital Resources

Sources of Liquidity

We have funded our operations primarily through the sale and issuance of our equity securities, including from the sale of our common stock in our IPO, Follow-on Offerings, and "at-the-market" offerings and the sale of our redeemable preferred stock, and to a lesser extent from cash received pursuant to our collaboration and license agreements.

In December 2020, we issued and sold 9,660,000 shares of common stock in our IPO at a price to the public of $23.00 per share. The aggregate net proceeds from our IPO were $204.7 million after deducting underwriting discounts and commissions and other offering costs.

In November 2021, we completed an underwritten public offering ("2021 Offering") in which 4,750,000 shares of our common stock were sold at an offering price of $25.00 per share. The net proceeds from the 2021 Offering were $111.1 million after deducting underwriting discounts and commissions and offering expenses.

In March 2022, we filed a Registration Statement on Form S-3 covering the offering of up to $300.0 million of common stock, preferred stock, debt securities, warrants and units, which was declared effective by the SEC in April 2022 (the "S-3 Registration Statement"). In March 2022, we also entered into an Open Market Sales Agreement (the "Sales Agreement") with Jefferies LLC as sales agent to sell shares of our common stock, from time to time, with aggregate gross sales proceeds of up to $100.0 million pursuant to the S-3 Registration Statement as an "at-the-market" offering under the Securities Act (the "2022 ATM Offering Program"). On May 31, 2024, we terminated the Sales Agreement and the 2022 ATM Offering Program pursuant to the terms of the Sales Agreement. At termination, 1,684,550 shares of our common stock had been sold pursuant to the Sales Agreement for net proceeds to us of $34.4 million, after deducting issuance costs.

In May 2023, we completed the 2023 Offering in which 8,625,000 shares of our common stock were sold at an offering price of $16.00 per share. The net proceeds from the 2023 Offering were $129.2 million after deducting underwriting discounts and commissions and offering expenses.

In July 2023, we entered into the License Agreement with AGT where we provided our 4D vector technology to AGT to deliver AGT's genetic payloads for the treatment of rare monogenic diseases. As partial consideration for the rights and licenses granted to AGT under the License Agreement, we received an upfront payment of $20.0 million.

In February 2024, we completed the 2024 Offering in which 6,586,015 shares of our common stock were sold at an offering price of $29.50 per share, as well as pre-funded warrants to purchase 3,583,476 shares of our common stock at an offering price of $29.4999 per underlying share. The net proceeds from the 2024 Offering were $281.2 million, after deducting underwriting discounts and commissions and other offering expenses. We also granted the underwriters the option to purchase up to 1,525,423 additional shares of common stock in connection with the offering. In March 2024, the underwriters exercised their option and purchased 1,259,299 additional shares of common stock resulting in net proceeds of $34.9 million, after deducting underwriting discounts and commissions.

In June 2024, we entered into a Sales Agreement (the "Leerink Sales Agreement") with Leerink Partners LLC ("Leerink") as sales agent to sell shares of our common stock, from time to time, with aggregate gross sales proceeds of up to $250.0 million pursuant to a Registration Statement on Form S-3 that we filed with the SEC in February 2024 as an "at-the-market" offering under the Securities Act. For the nine months ended September 30, 2025, no shares were sold pursuant to the Leerink Sales Agreement.

As of September 30, 2025, we had cash, cash equivalents and marketable securities of $372.2 million.

Future Funding Requirements

We have experienced recurring net losses and had an accumulated deficit of $735.7 million as of September 30, 2025. Our transition to profitability is dependent upon the successful development, approval and commercialization of our product candidates and those of our collaboration partners and achieving a level of revenue adequate to support our cost structure. We expect to continue to incur losses for the foreseeable future.

We expect that our overall research and development and general and administrative expenses will increase. As a result, we will need significant additional capital to fund our operations, which we may obtain through one or more equity offerings, debt financings or other third-party funding, the Otsuka Collaboration and Licensing Agreement, and additional potential strategic alliances and licensing or collaboration arrangements.

Because of the numerous risks and uncertainties associated with the development and commercialization of gene therapy product candidates, we are unable to estimate the amount of increased capital we will need to raise to support our operations and the outlays and operating expenditures necessary to complete the development of our product candidates and build additional manufacturing capacity, and we may use our available capital resources sooner than we currently expect.

Our future capital requirements will depend on many factors, including:

We believe that our existing cash, cash equivalents and marketable securities will allow us to fund our planned operations for at least one year from the date of the issuance of the financial statements included in this report.

We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect, in which case we would be required to obtain additional financing sooner than currently projected, which may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. See the section titled "Risk Factors" for additional risks associated with our substantial capital requirements.

We have limited committed external sources of funds. Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources to complete the clinical development for the product candidates for treatment of wet AMD, DME, GA, cystic fibrosis lung disease, alpha-1 antitrypsin deficiency lung disease or any other indication we may pursue. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter would result in fixed payment obligations and may involve agreements that include grants of security interests on our assets and restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, granting liens over our assets, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business. Any debt financing or additional equity that we raise may contain terms that could adversely affect our common stockholders. Further, additional funds may not be available when we need them, on terms that are acceptable to us, 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 the war in Ukraine, conflicts in the Middle East, any expansion of these conflicts, rising interest rates and inflation, natural disasters and pandemics.

If we are unable to obtain additional funding, we expect to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or investment in manufacturing capabilities, which could adversely affect our business. If we raise additional funds through collaborations or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to future revenue streams or product candidates or grant licenses on terms that may not be favorable to us.

Summary Statement of Cash Flows

The following is a summary of cash flows for the periods indicated below (in thousands):

Net Cash Used in Operating Activities

Net cash used in operating activities was $137.6 million for the nine months ended September 30, 2025. This was primarily due to the net loss of $159.5 million, adjusted for noncash charges of $18.5 million and net changes in operating assets and liabilities of $3.4 million. Noncash charges included $16.5 million of stock-based compensation expense, $3.5 million of depreciation and amortization and $2.2 million for the amortization of operating lease right-of-use assets, offset by $3.6 million net accretion of discount on marketable securities and $0.1 million change in fair value of derivative liability. Net changes in operating assets and liabilities included increases of $5.8 million in accrued and other liabilities and $2.4 million in accounts payable and a $2.7 million decrease in prepaid expenses and other current assets, offset by decreases of $2.3 million in operating lease liabilities and $0.1 million in deferred revenue and a $5.1 million increase in other assets.

Net cash used in operating activities was $88.7 million for the nine months ended September 30, 2024. This was primarily due to the net loss of $111.2 million, adjusted for noncash charges of $18.2 million and net changes in operating assets and liabilities of $4.3 million. Noncash charges included $18.5 million of stock-based compensation expense, $3.6 million of depreciation and amortization and $1.4 million for the amortization of operating lease right-of-use assets, offset by $5.3 million net accretion of discount on marketable securities. Net changes in operating assets and liabilities included an increase of $8.9 million in accrued and other liabilities which were offset by decreases of $1.4 million in operating lease liabilities and $0.6 million in accounts payable and increases of $2.2 million in other assets and $0.5 million in prepaid expenses and other current assets.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities was $35.9 million for the nine months ended September 30, 2025. This was due to $301.2 million in maturities of marketable securities, offset by purchases of marketable securities of $264.7 million and purchases of property and equipment of $0.6 million.

Net cash used in investing activities was $309.5 million for the nine months ended September 30, 2024. This was due to purchases of marketable securities of $409.9 million and purchases of property and equipment of $2.8 million, offset by $103.2 million in maturities of marketable securities.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $1.0 million for the nine months ended September 30, 2025 which was due to proceeds from the issuance of common stock from ESPP purchases of $0.9 million and proceeds from the issuance of common stock from the exercise of stock options and warrants of $0.1 million.

Net cash provided by financing activities was $336.6 million for the nine months ended September 30, 2024. This was primarily due to proceeds from the issuance of common stock upon public offering, net of issuance costs, of $316.1 million, proceeds from the issuance of common stock from the 2022 ATM Offering Program of $15.3 million, proceeds from the issuance of common stock from the exercise of stock options and warrants of $4.5 million and proceeds from the issuance of common stock from purchases from the Company's 2020 Employee Stock Purchase Plan ("ESPP") of $0.7 million.

Contractual Obligations, Commitments and Contingencies

Our commitments include obligations under vendor contracts to provide research services and other purchase commitments with our vendors. In the normal course of business, we enter into services agreements with contract research organizations, contract manufacturing organizations and other third parties. Generally, these agreements provide for termination upon notice, with specified amounts due upon termination based on the timing of termination and the terms of the agreement. The actual amounts and timing of payments under these agreements are uncertain and contingent upon the initiation and completion of the services to be provided. These amounts are not fixed and determinable.

As of September 30, 2025, our principal commitments consisted of obligations under our operating leases for our headquarters. Please see Note 8, Commitments and Contingencies, to our condensed financial statements included elsewhere in this report for further details.

Critical Accounting Policies and Significant Judgments and Estimates

Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements, as well as the reported revenue and expenses during the reported periods. We evaluate these estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

During the three and nine months ended September 30, 2025, there were no changes to our critical accounting policies and significant judgments and estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies, to our condensed financial statements included elsewhere in this report for information.

Off-Balance Sheet Arrangements

Since our inception, we have not engaged in any off-balance sheet arrangements as defined in the rules and regulations of the SEC.