Quarterly Report for Quarter Ending MARCH 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis (this "MD&A") of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and related notes included in this Quarterly Report on Form 10-Q (this "Quarterly Report"). This MD&A contains forward-looking statements reflecting our expectations, plans, and assumptions regarding future operating performance, which are subject to risks and uncertainties that may be outside our control. Actual results may differ materially from those expressed or implied by such forward-looking statements due to factors described in the sections entitled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements." The Company was incorporated in connection with its separation from Avidity Biosciences, Inc. ("Former Parent" or "Avidity") and became an independent public company upon completion of the Spin-Off (as defined below). As a result, the results of operations and cash flows presented for the periods discussed below reflect our operations as a standalone entity and may not be indicative of future results. This MD&A is intended to provide an understanding of our financial condition, changes in financial condition, and results of operations during the quarter ended March 31, 2026, and should be read in conjunction with the information contained in Exhibit 99.1 to our Registration Statement on Form 10-12B/A, as amended (File No. 001-43008), which was filed with the Securities and Exchange Commission (the "SEC") and became effective on February 26, 2026 (the "Form 10").

Overview

We are a biopharmaceutical company pioneering the delivery of RNA therapeutics to the heart to transform the standard of care for people living with cardiomyopathies. Our proprietary technology leverages a targeted RNA delivery platform that combines the tissue selectivity of mAbs and other targeted delivery ligands with the precision of oligonucleotides. This unique combination allows selective targeting of the underlying genetic drivers of disease that were previously undruggable.

We have initially selected genetically validated cardiology targets for our development pipeline. Our precision cardiology pipeline currently consists of two primary, wholly owned precision cardiology development candidates for the treatment of PRKAG2 syndrome and PLN cardiomyopathy. The chart below represents a summary of our wholly owned development programs. We also have two additional pipeline candidates in research and development targeting undisclosed rare cardiology targets which we may develop in the future.

ATR 1072

Our lead product candidate, ATR 1072, is a siRNA-based therapy targeting PRKAG2 for the treatment of PRKAG2 syndrome. Preclinical studies to date have demonstrated ATR 1072's potency and selectivity for PRKAG2 silencing. A mouse surrogate AOC ("mATR 1072") containing the siRNA component of ATR 1072 conjugated to a mouse targeting anti-TFR1 antibody demonstrated robust in vivo activity. Marked reductions of PRKAG2 mRNA in the heart of wildtype mice were observed with mATR 1072. We also observed substantial reductions in PRKAG2 protein in the heart. We have also observed functional activity of mATR 1072 in a mouse model of PRKAG2 syndrome. In this model, mice exhibit reduced diastolic function and conduction abnormalities relative to wildtype mice. Treatment with ATR 1072 improved diastolic function and restored electrical conduction parameters, which we believe establishes a link between PRKAG2 molecular target engagement and functional cardiac benefit. In addition, preliminary tolerability data in cynomolgus monkeys, a non-human primates ("NHP") species, has been evaluated. ATR 1072 was pharmacologically active in NHP achieving robust and durable PRKAG2 mRNA knockdown and reduced protein expression in the heart. In these subacute studies in NHP, ATR 1072 was well tolerated, with no adverse findings in electrocardiogram ("ECG") parameters or heart morphology with a preclinical tolerability profile comparable to others in the RNA delivery platform. Preclinical toxicology studies and Chemistry, Manufacturing, and Controls ("CMC") manufacturing are ongoing for ATR 1072. We expect to file an Investigational New Drug ("IND") in the second half of 2026 and we plan to initiate a Phase 1 clinical trial following IND acceptance by the FDA.

ATR 1086

Our second lead product candidate, ATR 1086, is a siRNA-based therapy targeting phospholamban ("PLN") for the treatment of PLN cardiomyopathy. Preclinical studies to date have demonstrated ATR 1086's potency and selectivity for PLN silencing. In a mouse surrogate AOC ("mATR 1086") containing the siRNA component of ATR 1086 conjugated to a mouse targeted anti-TFR1 antibody, mATR 1086 demonstrated robust PLN mRNA reduction in the heart. Preclinical studies have also demonstrated the functional activity of mATR 1086 in a humanized mouse model of PLN cardiomyopathy (hPLNR14/R14). This model is homozygous for the human PLN 14del mutation resulting in rapidly progressive heart disease where animals die within 8 weeks of life. mATR 1086 treatment in this model resulted in 100% survival through the duration of the study for at least 20 weeks. In addition, mATR 1086 treated mice had substantial improvement in cardiac function marked by increased ejection fraction compared to untreated mice. These data demonstrate that reduction of mutant PLN led to improved heart function. Preliminary tolerability data in a higher species, the NHP, has been evaluated. ATR 1086 was pharmacologically active in NHP achieving robust and durable PLN mRNA knockdown in the heart. Sustained PLN mRNA reduction (~80%) was well tolerated for over three months in non-GLP studies in cynomolgus monkeys (n=3), an NHP species, with no adverse findings in ECG parameters or heart morphology with a preclinical tolerability profile comparable to others in the RNA delivery platform. CMC manufacturing for ATR 1086 has been initiated to support IND-enabling preclinical studies in 2026. We expect to file an IND for ATR 1086 in 2027.

Other Programs

While we initially focused on targeting rare cardiac conditions with high unmet need, we believe our de-risked technology coupled with the robust preclinical data across two different therapeutic areas supports our strategy to expand the pipeline to treat a broader range of genetic and cardiac diseases.

Separation from Avidity

In October, 2025, Avidity entered into an Agreement and Plan of Merger with Novartis AG ("Novartis") and Ajax Acquisition Sub, Inc., a wholly owned subsidiary of Novartis ("Merger Sub"), pursuant to which Merger Sub merged with and into Avidity, with Avidity surviving as an indirect wholly owned subsidiary of Novartis (the "Merger").

In connection with the Merger, we entered into a Separation and Distribution Agreement (the "Separation Agreement") with Avidity and Novartis. Pursuant to the Separation Agreement, Avidity undertook a pre-closing reorganization (the "Separation") to transfer to us all assets and liabilities related to its early-stage precision cardiology programs and certain collaboration, license and research agreements. Avidity retained all other assets and liabilities.

Following the Separation, on February 26, 2026, Avidity distributed all the outstanding shares of the Company's common stock, par value $0.001 per share ("common stock") to Avidity's stockholders on a pro rata basis (the "Spin-Off"). Each holder of the Former Parent's common stock, par value $0.0001 per share ("Former Parent Common Stock") received 1 share of common stock for every 10 shares of the Former Parent Common Stock held of record as of the close of business, Eastern Time, on February 12, 2026. In the Spin-Off, 15,514,966 shares of common stock were distributed to holders of the Former Parent Common Stock.

Additionally, in the Spin-Off, holders of options to purchase shares of the Former Parent Common Stock (the "Former Parent Stock Options") and holders of restricted stock units denominated in shares of the Former Parent Common Stock, whether subject to time-based or performance-based vesting, that were granted under any equity plans, agreements or arrangements of the Former Parent ("Former Parent RSUs" and together with the Former Parent Stock Options, the "Former Parent Equity Awards") received a non-transferable Make Whole Award that will be settled in shares of common stock at a ratio of one (1) share of common stock for every ten (10) shares of the Former Parent Common Stock underlying each such Former Parent Equity Award, as required by the terms of the Separation Agreement and as permitted by the SEC's Staff Legal Bulletin No. 4. The Company granted Make Whole Awards to certain holders of Former Parent Equity Awards for an aggregate of 1,590,677 shares of its common stock, which awards were outstanding as of March 31, 2026. These awards are required to be settled as soon as administratively practicable after the effective time of the Spin-Off, but in no event after March 15, 2027. See Note 6.

From and after the completion of the Spin-Off, the Company continues to operate as an independent, publicly traded company. The Company was capitalized with $270.0 million in cash, less the sum of the amount of marketable securities and cash, cash equivalents and restricted cash contained in any accounts owned by the Company as of the close of business on the day prior to the date of the Spin-Off. The Company is led by a dedicated management team and board of directors. Avidity has no continuing ownership interest in the Company following the Spin-Off.

In connection with the Spin-Off, the Company entered into various agreements relating to transition services, licenses and certain other matters with the Former Parent. For additional information regarding these agreements, refer to Note 7.

Prior to the Separation, the historical combined financial statements have been prepared on a stand-alone basis and are derived from the Former Parent's consolidated financial statements and accounting records and are presented in conformity with U.S. GAAP.

Our financial position, results of operations and cash flows historically operated as part of the Former Parent's financial position, results of operations and cash flows prior to and until the Separation. These historical combined financial statements may not be indicative of our future performance and do not necessarily reflect what our results of operations, financial condition and cash flows would have been had we operated as a separate, publicly traded company during the periods presented.

Where we describe historical business activities in this Quarterly Report, we do so as if these transfers had already occurred and the Former Parent's activities related to such assets and liabilities had been performed by Atrium.

Transition from Avidity and Costs to Operate as an Independent Company

Prior to the Separation, our condensed financial statements reflect our operating results and financial position as it was operated by the Former Parent, rather than as an independent company. We utilized allocations and carve-out methodologies through the date of the Spin-Off to prepare historical combined financial statements and condensed financial statements. The condensed financial statements herein for periods prior to the Spin-Off may not be indicative of our future performance, do not necessarily include the actual expenses that would have been incurred by us, and may not reflect our results of operations, financial position, and cash flows had we been a separate, standalone company during the historical periods presented.

We have incurred and we will continue to incur ongoing operating expenses to operate as an independent company. These costs include the cost of various corporate headquarters functions, information technology-related costs, and costs to operate stand-alone accounting, legal, and other administrative functions. It is not practicable to estimate the costs that would have been incurred in each of the periods presented in the historical combined financial statements for the functions described above. Actual costs that would have been incurred if we operated as a stand-alone public company during these periods would have depended on various factors, including organizational design, outsourcing and other strategic decisions related to corporate functions, information technology and back office infrastructure. On the effective time of the Spin-Off, we entered into the Transition Services Agreement with the Former Parent, pursuant to which we provide certain nominal transition services to the Former Parent, and the Former Parent provides certain transition services to us. During this transition period, we may incur one-time expenses to expand our infrastructure.

Components of Results of Operations

Revenue

Collaboration revenue

We expect to generate revenue from research and development and clinical trial activities. This revenue comes from license and research collaboration agreements, including reimbursements for services, upfront payments, and milestone payments under current and future agreements. As of March 31, 2026, the Company recognized $15.0 million in collaboration receivables as the result of the successful delivery of a development candidate for the first licensed compound targeting a cardiology indication under the BMS Collaboration Agreement.

We do not expect to generate revenue from product sales until our candidates successfully advance through clinical development and receive regulatory approval, if ever. Consequently, our revenue may fluctuate quarterly, influenced by the timing and amounts of payments related to our services and milestones. Any setbacks in preclinical or clinical development, or failure to secure regulatory approval, could adversely affect our ability to generate future revenues and our overall financial position.

Operating Expenses

Research and development

Research and development expenses represent costs incurred in connection with our discovery research and ongoing efforts to progress preclinical programs into clinical development as well as to execute clinical trials. These expenses include both external and internal costs, as follows:

Research and development expenses are recognized as incurred. Nonrefundable advance payments for goods and services to be used in future research and development activities are capitalized as prepaid assets until the goods or services are received. We classify such prepaid assets as current or non-current assets based on our estimates of the timing of when the goods or services will be realized or consumed.

We manage our research and development spend in the aggregate and evaluate programs based on factors such as development progress, probability of technical and regulatory success, commercial potential, and availability of capital or partnership resources. Because our personnel and infrastructure support multiple programs, we do not allocate internal costs on a program-specific basis.

We expect our research and development expenses to increase as we continue to conduct ongoing research and development activities, advance preclinical research programs toward clinical development, and conduct clinical trials. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming and can vary significantly for each product candidate and development program.

Our research and development costs may vary significantly depending on factors such as:

General and administrative

General and administrative expenses primarily consist of employee-related expenses (including salaries, benefits, and stock-based compensation) for our executive, finance, legal, human resources, and other administrative functions. Other general and administrative expenses include professional fees for legal, accounting, audit, tax, and consulting services; costs associated with insurance, investor relations, and public company compliance; and allocated facility and information technology related costs, including depreciation, not otherwise included in research and development expenses.

We expect general and administrative expenses to increase over time as we operate as a public company and continue to build the infrastructure necessary to support our increased research and development activities, commercial readiness initiatives, compliance costs, and other corporate activities.

Other income (expense)

Other income (expense) primarily includes interest income and fluctuations in other non-operating items.

Results of Operations

The following table summarizes our results of operations for the periods presented (in thousands):

Collaboration Revenue

Collaboration revenue increased by $18.1 million for the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to the recognition of a $15.0 million milestone under the BMS Collaboration Agreement.

Research and Development Expenses

The following table illustrates the components of our research and development expenses for the periods presented (in thousands):

Research and development expenses increased by $9.7 million for the three months ended March 31, 2026, as compared to the same period in 2025. External costs increased $3.9 million primarily due to a $3.2 million increase in contract manufacturing costs and $0.7 million increase in other development costs. Internal costs increased $5.8 million primarily due to higher personnel costs including salaries, wages and accelerated vesting of stock-based compensation.

General and Administrative Expenses

General and administrative expenses increased by $18.2 million for the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to $6.4 million in higher personnel costs including salaries, wages and accelerated vesting of stock-based compensation, and $8.7 million in external spend to support our expanded operations.

Liquidity and Capital Resources

Sources of Liquidity

We have incurred net losses and negative cash flow from operations since inception and we anticipate that we will continue to incur net losses for the foreseeable future. Historically, we have depended on Avidity to fund our operations as Avidity used a centralized approach to cash management and financing prior to the Spin-Off. As a result, we did not maintain our own bank accounts and had no cash and cash equivalents prior to the establishment of our independent cash management structure. As of March 31, 2026, we held cash and cash equivalents of $267.8 million.

We no longer participate in Avidity's centralized treasury system and independently manage our liquidity. Avidity has contributed to us an amount in cash equal to $270.0 million, minus the sum of the amount of marketable securities and cash, cash equivalents and restricted cash contained in any bank and brokerage accounts held by us as of the close of business on the day prior to the effective time of the Spin-Off. We anticipate the funding, as well as cash generated from its collaboration agreements, will be sufficient to meet our working capital requirements, capital expenditures and other general corporate purposes and through Phase 1 clinical proof-of-concept for our product candidate, ATR 1072, for the treatment of PRKAG2 syndrome. Whether these resources are adequate to meet our liquidity needs will depend on our growth and operating results.

We expect to invest our cash, in accordance with our investment policy, in money market funds and fixed income securities including U.S. treasury bills and government securities. We will attempt to minimize credit risk related to our cash, cash equivalents and restricted cash by maintaining a well-diversified portfolio that limits the amount of exposure as to maturity and investment type.

Future Capital Requirements

As of March 31, 2026, following the establishment of our independent cash management structure in connection with the Spin-Off, we held cash and cash equivalents of $267.8 million. We expect that our cash and cash equivalents, as of the date of this Quarterly Report, will be sufficient to fund our current forecast for operating expenses, financial commitments and other cash requirements for at least 12 months from the date of the filing of this Quarterly Report.

Our primary uses of cash are to fund our operations, which consist primarily of research and development expenditures related to our programs and, to a lesser extent, general and administrative expenditures. We anticipate that we will continue to incur significant and increasing expenses for the foreseeable future as we continue to advance our product candidates and further our research and development initiatives, expand our corporate infrastructure, including the costs of being a public company, and incur costs associated with potential commercialization. We are subject to all of the risks typically related to the development of new drug candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We anticipate that we will need substantial additional funding in connection with our continuing operations.

We do not have any products approved for sale and have not generated any revenue from product sales since our inception. We do not expect to generate revenue from any product candidates that we develop until we obtain regulatory approval for one or more of such product candidates and commercialize our products pursuant to our existing collaboration agreements or enter into new collaboration agreements with third parties. Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we may never achieve or sustain profitability and, unless and until we are able to develop and commercialize our product candidates, we will need to raise additional capital. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations with our funding, revenue generated from the Third Party Agreements, if any, and through public or private equity or debt financings, or potentially other capital sources, such as collaboration or licensing arrangements with third parties or other strategic transactions. There are no assurances that we will be successful in obtaining an adequate level of financing to support our business plans when needed on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity 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, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration or licensing arrangements with

third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise capital as and when needed, or on attractive terms, we may have to significantly delay, reduce, or discontinue the development and commercialization of our product candidates or scale back or terminate our operations.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could significantly increase as a result of many factors, including:

A change in the outcome of any of these or other variables with respect to the development of any product candidate could significantly change the costs and timing associated with the development of that product candidate. Additionally, we may experience increased costs and be required to raise additional capital much sooner than anticipated. Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.

Cash Flows

Historically, the cash flows from our operating and financing activities reflect the impact of funding provided by Avidity under a centralized cash management structure. As a result, we did not maintain separate bank accounts, and our historical cash flows include intercompany transfers recorded within operating and financing activities. In connection with the Spin-Off, we no longer participate in Avidity's centralized treasury system and independently manage our financial obligations. The following table summarizes our cash flow activities (in thousands):

Cash Flows from Operating Activities

Net cash used in operating activities was $31.1 million for the three months ended March 31, 2026, compared to $11.1 million used in operating activities for the three months ended March 31, 2025. The change primarily reflects higher research and development spending as well as general and administrative expenses as described under "Results of Operations". Our operating cash flows historically represent funding requirements for our activities, which were financed by Avidity through intercompany transfers.

Cash Flows from Investing Activities

Net cash used in investing activities was $2.1 million for the three months ended March 31, 2026. We had no cash flows from investing activities for the three months ended March 31, 2025. The change primarily reflects the acquisition of lab equipment to further the research and development of product candidates.

Cash Flows from Financing Activities

Net cash provided by financing activities was $301.5 million for the three months ended March 31, 2026, compared to $11.1 million provided by financing activities for the three months ended March 31, 2025. These amounts reflect net transfers from the Former Parent as part of the Separation.

Contractual Obligations and Commitments

In June 2020, and as amended in December 2020, the Former Parent entered a non-cancellable operating lease for approximately 47,737 square feet of office and laboratory space in San Diego, California. The Former Parent entered into an expansion lease in June 2023 with both leases terminating concurrently on November 30, 2026. In connection with the Separation, the lease and all related rights and obligations have been transferred and assigned to us, and, we now operate as the tenant under the lease.

Additionally, prior to the Separation, certain facility and service arrangements were comingled within contracts held by the Former Parent. Under the terms of the Separation, the Former Parent will retain those comingled contracts and continue to be the obligor. We did not assume any of the Former Parent's obligations under those agreements.

We enter into contracts during the ordinary course of our business for purposes such as contract research services, contract manufacturing services, professional services, and a variety of other operational needs. Our agreements often include clauses requiring payment in the event of early termination, with the amount depending on both the timing and specific terms of each contract. As a result, we classify these contracts as cancellable.

Critical Accounting Estimates

Our critical accounting estimates are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates" included in Exhibit 99.1 to the Form 10. There have been no significant changes to these critical accounting estimates during the three months ended March 31, 2026.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, including the expected timing and impact of adoption, see Note 2, "Summary of Significant Accounting Policies," to our condensed financial statements included elsewhere in this Quarterly Report and Exhibit 99.1 to the Form 10. There have been no material changes to our assessment of recently issued accounting standards during the quarter ended March 31, 2026.