10-Q
0001806310--12-31falseQ2http://fasb.org/us-gaap/2023#AccruedLiabilitiesAndOtherLiabilitieshttp://fasb.org/us-gaap/2023#AccruedLiabilitiesAndOtherLiabilitieshttp://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2023#Liabilities0001806310us-gaap:AdditionalPaidInCapitalMember2023-03-310001806310us-gaap:RetainedEarningsMember2024-03-310001806310tsha:SsiWarrantsMember2023-04-052023-04-0500018063102024-04-012024-06-300001806310tsha:TermLoanThroughAugustThirteenTwentyTwentyThreeMember2021-08-122021-08-120001806310tsha:AbeonaCLN1AgreementsMember2020-01-012020-12-310001806310tsha:UnderwritingAgreementMembertsha:JuneTwentyTwentyFourPreFundedWarrantsOptionOneMember2024-06-262024-06-260001806310tsha:November132024ThroughNovember132025Membertsha:TrinityTermLoanAgreementMembertsha:TrinityLendersMembertsha:TrinityTermLoansMember2023-11-132023-11-130001806310tsha:TermLoanThroughDecemberThirtyOneTwentyTwentyOneMembertsha:TermLoanFacilityMember2021-08-122021-08-120001806310us-gaap:CommonStockMember2023-06-300001806310us-gaap:EmployeeSeveranceMember2023-12-310001806310us-gaap:PerformanceSharesMembertsha:ModifiedOptionsMember2024-04-012024-06-300001806310tsha:DallasLeaseAmendmentMembertsha:PegasusParkLLCMember2021-12-140001806310tsha:SecuritiesPurchaseAgreementMembertsha:AstellasMemberus-gaap:PrivatePlacementMember2022-10-212022-10-210001806310tsha:QueensAgreementMembersrt:MaximumMember2020-02-210001806310us-gaap:RestrictedStockUnitsRSUMember2024-06-300001806310tsha:AstellasMembertsha:AcquisitionOfWorldwideRightsForTSHA120ForTreatmentOfGiantAxonalNeuropathyMemberus-gaap:PrivatePlacementMember2024-01-012024-06-300001806310us-gaap:AdditionalPaidInCapitalMember2024-03-310001806310us-gaap:EmployeeStockOptionMember2024-04-012024-06-300001806310tsha:MarketBasedStockOptionsMembertsha:TwoThousandTwentyStockIncentivePlanMember2023-02-012023-02-280001806310tsha:TwoThousandTwentyStockIncentivePlanMember2024-06-300001806310us-gaap:EmployeeStockOptionMembertsha:TwoThousandTwentyStockIncentivePlanAndTwoThousandTwentyThreeInducementPlanMember2024-04-012024-06-300001806310tsha:UnderwritingAgreementMembertsha:PreFundedWarrantsMember2024-06-260001806310tsha:LicenseAgreementForCLN7Member2022-03-012022-03-310001806310us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001806310tsha:SecuritiesPurchaseAgreementMemberus-gaap:PrivatePlacementMember2023-08-142023-08-140001806310us-gaap:EmployeeStockOptionMember2023-12-310001806310us-gaap:CommonStockMember2023-04-012023-06-300001806310us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-06-300001806310us-gaap:WarrantMember2023-01-012023-06-300001806310us-gaap:CommonStockMember2023-03-310001806310tsha:InducementPlanMember2024-01-012024-06-300001806310us-gaap:EmployeeStockOptionMember2023-01-012023-06-300001806310tsha:TwoThousandTwentyStockIncentivePlanMember2020-09-162020-09-160001806310tsha:UnderwrittenPublicOfferingMemberus-gaap:AdditionalPaidInCapitalMember2024-01-012024-06-300001806310tsha:DurhamLeaseMember2023-12-310001806310us-gaap:PerformanceSharesMembertsha:InitialOptionsAndOriginalOptionsMember2024-01-012024-06-300001806310tsha:SecuritiesPurchaseAgreementMembertsha:TwentyTwentyThreePreFundedWarrantsMemberus-gaap:PrivatePlacementMember2024-01-012024-06-300001806310us-gaap:MeasurementInputRiskFreeInterestRateMember2024-06-300001806310tsha:SalesAgreementMembertsha:SalesAgentMembersrt:MaximumMember2021-10-050001806310tsha:SalesAgreementMember2024-06-300001806310us-gaap:PerformanceSharesMembertsha:ModifiedOptionsMember2024-06-300001806310us-gaap:FairValueInputsLevel1Member2023-12-310001806310tsha:PegasusParkLLCMembertsha:DallasLeaseMember2021-01-112021-01-110001806310tsha:AbeonaRettAgreementMembertsha:AbeonaTherapeuticsIncMember2024-01-012024-06-300001806310srt:MinimumMembertsha:DallasLeaseAmendmentMembertsha:PegasusParkLLCMember2021-12-142021-12-140001806310tsha:InducementPlanMember2023-12-3100018063102021-08-120001806310tsha:AstellasMember2022-10-012022-10-3100018063102022-12-310001806310us-gaap:PerformanceSharesMembertsha:OriginalOptionsMember2023-05-012023-05-310001806310tsha:TwoThousandTwentyStockIncentivePlanMember2024-01-010001806310us-gaap:PerformanceSharesMembertsha:ModifiedOptionsMember2024-01-012024-06-300001806310tsha:AbeonaRettAgreementMembersrt:MaximumMembertsha:AbeonaTherapeuticsIncMember2020-10-290001806310us-gaap:MoneyMarketFundsMember2023-12-310001806310tsha:TrinityLendersMembertsha:TrinityTermLoanAgreementMembertsha:TrinityTermLoansMember2024-06-300001806310us-gaap:PrivatePlacementMember2023-04-012023-06-300001806310us-gaap:EmployeeStockOptionMember2024-01-012024-06-300001806310tsha:UnderwrittenPublicOfferingMemberus-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001806310us-gaap:PrimeRateMember2021-08-122021-08-120001806310tsha:TrinityTermLoanAgreementMembertsha:TrinityLendersMembertsha:TrinityTermLoansMemberus-gaap:PrimeRateMember2023-11-132023-11-130001806310tsha:TrinityTermLoansMember2023-12-310001806310tsha:UnderwritingAgreementMemberus-gaap:SubsequentEventMember2024-07-090001806310us-gaap:RetainedEarningsMember2023-03-310001806310us-gaap:WarrantMember2024-01-012024-06-300001806310tsha:AstellasMembertsha:LicenseForRettMember2024-01-012024-06-300001806310tsha:TermLoanFacilityMember2021-12-310001806310tsha:InducementPlanMember2024-06-300001806310us-gaap:GeneralAndAdministrativeExpenseMember2023-04-012023-06-300001806310tsha:SecuritiesPurchaseAgreementMembertsha:TwentyTwentyThreePreFundedWarrantsMember2023-08-140001806310us-gaap:LeaseholdImprovementsMember2023-12-310001806310us-gaap:CommonStockMemberus-gaap:PrivatePlacementMember2023-04-012023-06-300001806310us-gaap:ComputerEquipmentMember2023-12-310001806310tsha:SecuritiesPurchaseAgreementMemberus-gaap:PrivatePlacementMembertsha:SsiStrategyHoldingsLlcMember2023-04-300001806310us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2023-12-310001806310tsha:DurhamLeaseMember2020-12-170001806310us-gaap:AdditionalPaidInCapitalMember2023-06-300001806310us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-06-300001806310tsha:TSHA120ForTreatmentOfGiantAxonalNeuropathyMember2021-03-012021-03-310001806310us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001806310tsha:PerformanceAndMarketBasedRestrictedStockUnitsMembertsha:TwoThousandTwentyStockIncentivePlanMember2024-01-012024-06-300001806310us-gaap:ConstructionInProgressMember2023-12-310001806310tsha:PerformanceAndMarketBasedRestrictedStockUnitsMembertsha:TwoThousandTwentyStockIncentivePlanMember2023-01-012023-12-310001806310tsha:PerformanceAndMarketBasedRestrictedStockUnitsMembertsha:TwoThousandTwentyStockIncentivePlanMember2024-06-300001806310tsha:EmployeeStockPurchasePlansMember2020-09-162020-09-160001806310tsha:TrinityLendersMembertsha:TrinityTermLoansMembertsha:SuccessFeeAgreementMember2023-11-132023-11-130001806310us-gaap:CommonStockMember2024-01-012024-06-300001806310us-gaap:CommonStockMember2023-01-012023-06-300001806310tsha:ExitAndDisposalActivitiesMember2022-01-012022-03-310001806310tsha:SecuritiesPurchaseAgreementMembertsha:AugustTwoThousandAndTwentyThreePrivatePlacementMember2023-08-140001806310tsha:AbeonaCLN1AgreementsMember2020-08-012020-08-310001806310tsha:EmployeeStockPurchasePlansMembersrt:MaximumMember2020-09-160001806310us-gaap:AdditionalPaidInCapitalMember2024-01-012024-06-300001806310tsha:SecuritiesPurchaseAgreementMembertsha:TwentyTwentyThreePreFundedWarrantsMemberus-gaap:PrivatePlacementMember2023-08-140001806310tsha:TrinityTermLoansMember2024-01-012024-06-300001806310tsha:AbeonaRettAgreementMembertsha:AbeonaTherapeuticsIncMember2023-01-012023-12-310001806310us-gaap:RetainedEarningsMember2023-12-310001806310tsha:TwentyTwentyThreePreFundedWarrantsMember2024-06-300001806310us-gaap:EmployeeStockOptionMember2024-01-012024-06-3000018063102023-06-300001806310tsha:ClosingDateThroughNovember132024Membertsha:TrinityLendersMembertsha:TrinityTermLoanAgreementMembertsha:TrinityTermLoansMember2023-11-132023-11-130001806310tsha:AssetsCapitalizedAsFinanceLeasesMember2024-06-300001806310tsha:QueensAgreementMemberus-gaap:ResearchAndDevelopmentExpenseMember2020-04-012020-04-300001806310us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2024-06-300001806310tsha:SecuritiesPurchaseAgreementMembertsha:AstellasMemberus-gaap:PrivatePlacementMember2022-10-310001806310us-gaap:EmployeeSeveranceMember2024-01-012024-06-300001806310tsha:AbeonaRettAgreementMember2023-01-012023-06-300001806310tsha:AssetsCapitalizedAsFinanceLeasesMember2023-12-310001806310us-gaap:MeasurementInputExpectedTermMember2024-06-300001806310us-gaap:CommonStockMember2023-11-150001806310tsha:UnderwrittenPublicOfferingMember2024-01-012024-06-300001806310tsha:SsiWarrantsMember2024-01-012024-06-300001806310tsha:SecuritiesPurchaseAgreementMembertsha:TwentyTwentyThreePreFundedWarrantsMembertsha:AugustTwoThousandAndTwentyThreePrivatePlacementMember2023-08-140001806310tsha:AbeonaRettAgreementMember2024-06-300001806310us-gaap:RetainedEarningsMember2024-06-300001806310tsha:SecuritiesPurchaseAgreementMembertsha:TwentyTwentyThreePreFundedWarrantsMemberus-gaap:PrivatePlacementMember2023-01-012023-12-310001806310tsha:UnderwritingAgreementMembertsha:JuneTwentyTwentyFourPreFundedWarrantsOptionTwoMember2024-06-262024-06-260001806310tsha:SecuritiesPurchaseAgreementMembertsha:AstellasMemberus-gaap:PrivatePlacementMember2022-10-012022-10-310001806310us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-06-300001806310tsha:AbeonaRettAgreementMember2024-04-012024-06-300001806310us-gaap:AdditionalPaidInCapitalMember2024-06-300001806310tsha:SecuritiesPurchaseAgreementMembertsha:TwoThousandTwentyThreePreFundedWarrantsMember2023-08-140001806310tsha:TSHA120RettSyndromeMember2023-12-310001806310tsha:AbeonaCLN1AgreementsMember2021-01-012021-12-3100018063102023-04-012023-06-300001806310tsha:SalesAgreementMembertsha:SalesAgentMember2021-10-052021-10-050001806310tsha:AstellasMembertsha:LicenseForGanMember2024-01-012024-06-300001806310us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001806310tsha:UnderwritingAgreementMemberus-gaap:SubsequentEventMember2024-07-092024-07-090001806310us-gaap:MoneyMarketFundsMember2024-06-300001806310tsha:DurhamLeaseMember2024-01-012024-06-300001806310tsha:UnderwrittenPublicOfferingMember2024-04-012024-06-300001806310us-gaap:EmployeeStockOptionMember2023-01-012023-06-300001806310us-gaap:MeasurementInputSharePriceMember2024-06-300001806310us-gaap:FurnitureAndFixturesMember2023-12-310001806310tsha:AbeonaCLN1AgreementsMember2020-10-012020-10-310001806310tsha:AstellasMember2022-10-212022-10-210001806310tsha:UnderwritingAgreementMembertsha:JuneTwentyTwentyFourPreFundedWarrantsMember2024-06-260001806310us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-06-300001806310tsha:UnderwritingAgreementMembertsha:JuneTwentyTwentyFourPreFundedWarrantsMember2024-06-262024-06-260001806310tsha:LicenseAgreementForCLN7Member2022-03-310001806310tsha:UnderwrittenPublicOfferingMemberus-gaap:CommonStockMember2024-01-012024-06-300001806310us-gaap:RetainedEarningsMember2023-04-012023-06-300001806310tsha:EmployeeStockPurchasePlansMember2024-01-010001806310us-gaap:RetainedEarningsMember2022-12-310001806310us-gaap:EmployeeStockOptionMember2023-04-012023-06-300001806310tsha:TrinityTermLoanAgreementMembertsha:TrinityLendersMembertsha:TrinityTermLoansMembertsha:November132025ThroughButExcludingTheMaturityDateMember2023-11-132023-11-130001806310us-gaap:RetainedEarningsMember2023-01-012023-06-300001806310us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-06-300001806310tsha:SalesAgreementMember2022-04-012022-04-300001806310us-gaap:AdditionalPaidInCapitalMember2023-01-012023-06-300001806310us-gaap:MeasurementInputPriceVolatilityMember2024-06-300001806310tsha:TermLoanThroughDecemberThirtyOneTwentyTwentyOneMembertsha:TermLoanFacilityMember2021-08-120001806310us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-06-3000018063102021-08-122021-08-120001806310tsha:TermLoanFacilityMember2021-08-120001806310us-gaap:PerformanceSharesMembertsha:TwoThousandTwentyStockIncentivePlanMember2023-02-282023-02-280001806310tsha:TrinityTermLoanAgreementMember2024-06-300001806310tsha:UTSouthwesternAgreementMember2020-04-012020-04-300001806310tsha:TermLoanFromAprilOneTwentyTwentyThreeUntilDecemberThirtyOneTwentyTwentyThreeMembertsha:TermLoanFacilityMember2021-08-120001806310tsha:SuccessFeeLiabilityMember2024-06-300001806310tsha:TermLoanFacilityMember2023-01-012023-12-310001806310tsha:PegasusParkLLCMembertsha:DallasLeaseMember2021-01-110001806310us-gaap:CommonStockMember2024-03-310001806310us-gaap:GeneralAndAdministrativeExpenseMembertsha:TrinityLendersMembertsha:TrinityTermLoanAgreementMembertsha:TrinityTermLoansMember2023-12-310001806310tsha:QueensAgreementMember2024-01-012024-06-300001806310tsha:AbeonaRettAgreementMember2023-04-012023-06-300001806310tsha:UnderwritingAgreementMemberus-gaap:CommonStockMember2024-06-260001806310tsha:TSHA120ForTreatmentOfGiantAxonalNeuropathyMember2024-01-012024-06-300001806310tsha:TrinityTermLoansMember2024-06-300001806310tsha:PerformanceAndMarketBasedRestrictedStockUnitsMembertsha:TwoThousandTwentyStockIncentivePlanMember2023-02-012023-02-280001806310us-gaap:CommonStockMember2024-04-012024-06-300001806310tsha:TwentyTwentyThreePreFundedWarrantsMember2023-01-012023-12-310001806310us-gaap:RetainedEarningsMember2023-06-300001806310us-gaap:LeaseholdImprovementsMember2024-06-300001806310us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-3000018063102023-03-310001806310tsha:ExitAndDisposalActivitiesMember2022-12-012023-03-310001806310tsha:UnderwritingAgreementMemberus-gaap:SubsequentEventMember2024-06-262024-07-090001806310tsha:LaboratoryEquipmentMember2023-12-310001806310us-gaap:FairValueInputsLevel3Member2024-06-300001806310us-gaap:CommonStockMember2024-06-300001806310us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-06-300001806310us-gaap:AdditionalPaidInCapitalMember2023-12-310001806310tsha:EmployeeStockPurchasePlansMember2024-01-012024-06-300001806310tsha:TermLoanFromOctoberOneTwentyTwentyTwoUntilMarchThirtyOneTwentyTwentyThreeMembertsha:TermLoanFacilityMember2021-08-1200018063102024-08-120001806310tsha:TwoThousandTwentyStockIncentivePlanMember2024-01-012024-06-300001806310us-gaap:AdditionalPaidInCapitalMember2022-12-310001806310us-gaap:PrivatePlacementMemberus-gaap:AdditionalPaidInCapitalMember2023-01-012023-06-300001806310tsha:MarketBasedStockOptionsMembertsha:TwoThousandTwentyStockIncentivePlanMember2023-01-012023-12-310001806310us-gaap:RetainedEarningsMember2024-04-012024-06-300001806310us-gaap:MeasurementInputExpectedTermMember2023-04-050001806310tsha:SecuritiesPurchaseAgreementMemberus-gaap:PrivatePlacementMember2023-08-162023-08-160001806310tsha:TrinityTermLoanAgreementMembertsha:TrinityLendersMembertsha:TrinityTermLoansMember2023-11-130001806310us-gaap:FurnitureAndFixturesMember2024-06-300001806310tsha:UnsettledRestrictedStockUnitAwardsMember2024-01-012024-06-300001806310tsha:LicenseAgreementForCLN7Member2024-01-012024-06-3000018063102022-02-280001806310tsha:AstellasMembertsha:AcquisitionOfWorldwideRightsForTSHA120ForTreatmentOfGiantAxonalNeuropathyMember2024-01-012024-06-300001806310us-gaap:EmployeeStockOptionMembertsha:TwoThousandTwentyStockIncentivePlanAndTwoThousandTwentyThreeInducementPlanMember2024-01-012024-06-300001806310us-gaap:PrivatePlacementMemberus-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001806310tsha:TermLoanFacilityMembertsha:TermLoanFromJanuaryOneTwentyTwentyTwoUntilMarchThirtyOneTwentyTwentyThreeMember2021-08-120001806310tsha:AbeonaCLN1AgreementsMember2024-01-012024-06-300001806310us-gaap:MeasurementInputPriceVolatilityMember2023-04-050001806310us-gaap:PerformanceSharesMembertsha:ModifiedOptionsMember2023-01-012023-12-310001806310tsha:DurhamLeaseMember2024-06-300001806310us-gaap:RetainedEarningsMember2024-01-012024-06-3000018063102022-02-012022-02-280001806310tsha:AbeonaCLN1AgreementsMembersrt:MaximumMember2020-08-310001806310us-gaap:PerformanceSharesMembertsha:TwoThousandTwentyStockIncentivePlanMember2024-06-300001806310tsha:TermLoanFromAprilOneTwentyTwentyThreeUntilDecemberThirtyOneTwentyTwentyThreeMembertsha:TermLoanFacilityMember2021-08-122021-08-120001806310us-gaap:CommonStockMemberus-gaap:PrivatePlacementMember2023-01-012023-06-300001806310tsha:AbeonaRettAgreementMembertsha:AstellasMember2024-01-012024-06-300001806310tsha:TwoThousandTwentyStockIncentivePlanMember2023-12-310001806310us-gaap:RestrictedStockUnitsRSUMembertsha:TwoThousandTwentyStockIncentivePlanMember2024-01-012024-06-300001806310us-gaap:CommonStockMember2022-12-310001806310us-gaap:EmployeeStockOptionMember2024-06-300001806310tsha:TermLoanFromOctoberOneTwentyTwentyTwoUntilMarchThirtyOneTwentyTwentyThreeMembertsha:TermLoanFacilityMember2021-08-122021-08-1200018063102023-12-310001806310us-gaap:FairValueInputsLevel1Member2024-06-300001806310tsha:AbeonaRettAgreementMembertsha:AbeonaTherapeuticsIncMember2020-01-012020-12-310001806310tsha:SecuritiesPurchaseAgreementMemberus-gaap:PrivatePlacementMembertsha:SsiStrategyHoldingsLlcMember2023-04-012023-04-3000018063102023-01-012023-06-300001806310us-gaap:MeasurementInputRiskFreeInterestRateMember2023-04-050001806310tsha:SecuritiesPurchaseAgreementMembertsha:AstellasMemberus-gaap:PrivatePlacementMember2022-10-210001806310tsha:DurhamLeaseMember2020-12-172020-12-170001806310tsha:TrinityLendersMembertsha:TrinityTermLoanAgreementMembertsha:TrinityTermLoansMember2023-11-132023-11-130001806310tsha:AbeonaRettAgreementMember2024-01-012024-06-300001806310tsha:UTSouthwesternAgreementMember2019-11-300001806310us-gaap:PrivatePlacementMember2023-01-012023-06-300001806310tsha:LaboratoryEquipmentMember2024-06-300001806310us-gaap:ResearchAndDevelopmentExpenseMember2024-04-012024-06-3000018063102024-01-012024-06-300001806310tsha:EmployeeStockPurchasePlansMember2023-01-010001806310tsha:UnderwrittenPublicOfferingMemberus-gaap:CommonStockMember2024-04-012024-06-300001806310tsha:UnderwritingAgreementMember2024-06-260001806310us-gaap:ResearchAndDevelopmentExpenseMember2023-04-012023-06-300001806310us-gaap:GeneralAndAdministrativeExpenseMember2024-04-012024-06-300001806310us-gaap:FairValueInputsLevel3Member2023-12-310001806310tsha:TermLoanFacilityMembertsha:TermLoanFromJanuaryOneTwentyTwentyTwoUntilMarchThirtyOneTwentyTwentyThreeMember2021-08-122021-08-120001806310us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001806310tsha:TrinityLendersMembertsha:SuccessFeeAgreementMembertsha:TrinityTermLoansMember2024-06-300001806310tsha:SuccessFeeLiabilityMember2023-12-310001806310us-gaap:RestrictedStockUnitsRSUMember2023-12-310001806310tsha:SecuritiesPurchaseAgreementMembertsha:JuneTwoThousandTwentyFourPrefundedWarrantsMember2024-06-300001806310tsha:AstellasMember2022-10-310001806310tsha:TermLoanFromJanuaryOneTwentyTwentyTwoUntilSeptemberThirtyTwentyTwentyTwoMembertsha:TermLoanFacilityMember2021-08-122021-08-120001806310us-gaap:ComputerEquipmentMember2024-06-300001806310tsha:EmployeeStockPurchasePlansMember2020-09-160001806310us-gaap:CommonStockMember2023-12-310001806310us-gaap:PerformanceSharesMembertsha:TwoThousandTwentyStockIncentivePlanMember2024-01-012024-06-300001806310us-gaap:PerformanceSharesMembertsha:InitialOptionsAndOriginalOptionsMember2023-05-012023-05-310001806310us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-06-300001806310tsha:AbeonaRettAgreementMember2023-12-310001806310tsha:UnderwritingAgreementMembertsha:JuneTwentyTwentyFourPreFundedWarrantsMember2024-07-012024-07-310001806310us-gaap:MeasurementInputSharePriceMember2023-04-0500018063102022-10-012022-10-310001806310tsha:TermLoanFacilityMembertsha:TermLoanFromJanuaryOneTwentyTwentyTwoUntilMarchThirtyOneTwentyTwentyThreeMember2022-01-012023-11-130001806310tsha:SuccessFeeAgreementMember2024-06-3000018063102024-06-300001806310us-gaap:EmployeeStockOptionMember2023-01-012023-12-3100018063102024-03-310001806310us-gaap:ConstructionInProgressMember2024-06-300001806310tsha:TSHA120RettSyndromeMember2024-06-300001806310tsha:TermLoanFromJanuaryOneTwentyTwentyTwoUntilSeptemberThirtyTwentyTwentyTwoMembertsha:TermLoanFacilityMember2021-08-120001806310tsha:SsiWarrantsMember2024-06-300001806310tsha:AstellasMember2024-01-012024-06-30xbrli:pureutr:sqftxbrli:sharestsha:Productiso4217:USDxbrli:sharestsha:Programiso4217:USDutr:Y

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 001-39536

 

Taysha Gene Therapies, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

84-3199512

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

3000 Pegasus Park Drive Ste 1430

Dallas, Texas

75247

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (214) 612-0000

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.00001 per share

 

TSHA

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of August 12, 2024, the registrant had 204,943,306 shares of common stock, $0.00001 par value per share, outstanding.

 

 


 

Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

1

Balance Sheets

1

Statements of Operations

2

 

Statements of Other Comprehensive Loss

3

Statements of Stockholders’ (Deficit) Equity

4

Statements of Cash Flows

6

Notes to Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

28

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

56

Item 4.

Controls and Procedures

56

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

57

Item 1A.

Risk Factors

57

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

58

Item 3.

Defaults Upon Senior Securities

58

Item 4.

Mine Safety Disclosures

58

Item 5.

Other Information

58

Item 6.

Exhibits

59

Signatures

60

 

i


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Taysha Gene Therapies, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

June 30,
2024

 

 

December 31,
2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

172,743

 

 

$

143,940

 

Restricted cash

 

 

449

 

 

 

449

 

Prepaid expenses and other current assets

 

 

3,278

 

 

 

3,479

 

Assets held for sale

 

 

2,000

 

 

 

2,000

 

Total current assets

 

 

178,470

 

 

 

149,868

 

Restricted cash

 

 

2,151

 

 

 

2,151

 

Property, plant and equipment, net

 

 

10,513

 

 

 

10,826

 

Operating lease right-of-use assets

 

 

8,971

 

 

 

9,582

 

Other non-current assets

 

 

288

 

 

 

304

 

Total assets

 

$

200,393

 

 

$

172,731

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

8,718

 

 

$

6,366

 

Accrued expenses and other current liabilities

 

 

11,875

 

 

 

12,284

 

Deferred revenue

 

 

13,583

 

 

 

18,106

 

Total current liabilities

 

 

34,176

 

 

 

36,756

 

Term loan, net

 

 

37,835

 

 

 

40,508

 

Operating lease liability, net of current portion

 

 

18,134

 

 

 

18,953

 

Other non-current liabilities

 

 

1,380

 

 

 

1,577

 

Total liabilities

 

 

91,525

 

 

 

97,794

 

Commitments and contingencies - Note 13

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Preferred stock, $0.00001 par value per share; 10,000,000 shares authorized and no shares issued and outstanding as of June 30, 2024 and December 31, 2023

 

 

 

 

 

 

Common stock, $0.00001 par value per share; 400,000,000 shares authorized and 201,381,450 and 186,960,193 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

664,457

 

 

 

587,942

 

Accumulated other comprehensive income

 

 

2,405

 

 

 

 

Accumulated deficit

 

 

(557,996

)

 

 

(513,007

)

Total stockholders’ equity

 

 

108,868

 

 

 

74,937

 

Total liabilities and stockholders' equity

 

$

200,393

 

 

$

172,731

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1


 

Taysha Gene Therapies, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)

 

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue

 

$

1,112

 

 

$

2,395

 

 

$

4,523

 

 

$

7,101

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

15,073

 

 

 

19,791

 

 

 

35,730

 

 

 

32,305

 

General and administrative

 

 

7,338

 

 

 

5,988

 

 

 

14,422

 

 

 

14,739

 

Total operating expenses

 

 

22,411

 

 

 

25,779

 

 

 

50,152

 

 

 

47,044

 

Loss from operations

 

 

(21,299

)

 

 

(23,384

)

 

 

(45,629

)

 

 

(39,943

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of warrant liability

 

 

195

 

 

 

 

 

 

(142

)

 

 

 

Change in fair value of term loan

 

 

(1,279

)

 

 

 

 

 

(2,332

)

 

 

 

Interest income

 

 

1,440

 

 

 

223

 

 

 

3,133

 

 

 

542

 

Interest expense

 

 

(27

)

 

 

(1,440

)

 

 

(56

)

 

 

(2,814

)

Other (expense) income

 

 

42

 

 

 

3

 

 

 

37

 

 

 

(5

)

Total other income (expense), net

 

 

371

 

 

 

(1,214

)

 

 

640

 

 

 

(2,277

)

Net loss

 

$

(20,928

)

 

$

(24,598

)

 

$

(44,989

)

 

$

(42,220

)

Net loss per common share, basic and diluted

 

$

(0.09

)

 

$

(0.38

)

 

$

(0.19

)

 

$

(0.66

)

Weighted average common shares outstanding, basic and diluted

 

 

232,821,553

 

 

 

64,244,531

 

 

 

232,035,448

 

 

 

63,755,435

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2


 

Taysha Gene Therapies, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)

 

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net loss

 

$

(20,928

)

 

$

(24,598

)

 

$

(44,989

)

 

$

(42,220

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of terms loan attributable to instrument specific credit risk

 

 

2,656

 

 

 

 

 

 

2,405

 

 

 

 

Comprehensive loss

 

$

(18,272

)

 

$

(24,598

)

 

$

(42,584

)

 

$

(42,220

)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3


 

Taysha Gene Therapies, Inc.

Condensed Consolidated Statements of Stockholders’ (Deficit) Equity

(in thousands, except share data)

(Unaudited)

 

For the Three Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Accumulated

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Other

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Comprehensive Loss

 

 

Deficit

 

Balance as of March 31, 2024

 

 

187,018,275

 

 

$

2

 

 

$

591,166

 

 

$

(537,068

)

 

$

(251

)

 

$

53,849

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,332

 

 

 

 

 

 

 

 

 

3,332

 

Issuance of common stock and pre-funded warrants upon closing of underwritten public offering, net of underwriting discounts and commissions, and other offering costs of $5,024

 

 

14,361,113

 

 

 

 

 

 

69,957

 

 

 

 

 

 

 

 

 

69,957

 

Issuance of common stock upon exercise of stock options, net

 

 

2,062

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

Loss on instrument-specific credit risk

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,656

 

 

 

2,656

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(20,928

)

 

 

 

 

 

(20,928

)

Balance as of June 30, 2024

 

 

201,381,450

 

 

$

2

 

 

$

664,457

 

 

$

(557,996

)

 

$

2,405

 

 

$

108,868

 

 

For the Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Accumulated

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Other

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Comprehensive Loss

 

 

Equity

 

Balance as of March 31, 2023

 

 

63,473,349

 

 

$

1

 

 

$

404,114

 

 

$

(419,063

)

 

$

 

 

$

(14,948

)

Stock-based compensation

 

 

 

 

 

 

 

 

2,222

 

 

 

 

 

 

 

 

 

2,222

 

Issuance of common stock in private placement, net of offering costs of $
40

 

 

705,218

 

 

 

 

 

 

210

 

 

 

 

 

 

 

 

 

210

 

Issuance of common stock upon vesting and settlement of restricted stock units

 

 

254,070

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(24,598

)

 

 

 

 

 

(24,598

)

Balance as of June 30, 2023

 

 

64,432,637

 

 

$

1

 

 

$

406,546

 

 

$

(443,661

)

 

$

 

 

$

(37,114

)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

4


 

Taysha Gene Therapies, Inc.

Condensed Consolidated Statements of Stockholders’ (Deficit) Equity

(in thousands, except share data)

(Unaudited)

 

For the Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Accumulated Other

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Comprehensive Loss

 

 

Stockholders' Equity

 

Balance as of December 31, 2023

 

 

186,960,193

 

 

$

2

 

 

$

587,942

 

 

$

(513,007

)

 

$

 

 

$

74,937

 

Stock-based compensation

 

 

 

 

 

 

 

 

6,530

 

 

 

 

 

 

 

 

 

6,530

 

Issuance of common stock and pre-funded warrants upon closing of underwritten public offering, net of underwriting discounts and commissions, and other offering costs of $5,024

 

 

14,361,113

 

 

 

 

 

 

69,957

 

 

 

 

 

 

 

 

 

69,957

 

Issuance of common stock upon vesting and settlement of restricted stock units

 

 

11,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under ESPP

 

 

46,800

 

 

 

 

 

 

26

 

 

 

 

 

 

 

 

 

26

 

Issuance of common stock upon exercise of stock options

 

 

2,062

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

Gain on instrument-specific credit risk

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,405

 

 

 

2,405

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(44,989

)

 

 

 

 

 

(44,989

)

Balance as of June 30, 2024

 

 

201,381,450

 

 

$

2

 

 

$

664,457

 

 

$

(557,996

)

 

$

2,405

 

 

$

108,868

 

 

 

 

For the Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Accumulated Other

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Comprehensive Loss

 

 

Equity (Deficit)

 

Balance as of December 31, 2022

 

 

63,207,507

 

 

$

1

 

 

$

402,389

 

 

$

(401,441

)

 

$

 

 

$

949

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,897

 

 

 

 

 

 

 

 

 

3,897

 

Issuance of common stock in private placement, net of offering costs of $
40

 

 

705,218

 

 

 

 

 

 

210

 

 

 

 

 

 

 

 

 

210

 

Issuance of common stock upon vesting and settlement of restricted stock units, net

 

 

483,992

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under ESPP

 

 

35,920

 

 

 

 

 

 

50

 

 

 

 

 

 

 

 

 

50

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(42,220

)

 

 

 

 

 

(42,220

)

Balance as of June 30, 2023

 

 

64,432,637

 

 

$

1

 

 

$

406,546

 

 

$

(443,661

)

 

$

 

 

$

(37,114

)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5


 

Taysha Gene Therapies, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

 

For the Six Months
Ended June 30,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(44,989

)

 

$

(42,220

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation expense

 

 

647

 

 

 

674

 

Stock-based compensation

 

 

6,530

 

 

 

3,897

 

Research and development license expense

 

 

 

 

 

3,500

 

Change in fair value of warrant liability

 

 

142

 

 

 

 

Non-cash change in fair value of term loan

 

 

(268

)

 

 

 

Non-cash lease expense

 

 

619

 

 

 

603

 

Other

 

 

1

 

 

 

387

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

129

 

 

 

509

 

Accounts payable

 

 

2,365

 

 

 

2,123

 

Accrued expenses and other liabilities

 

 

(1,955

)

 

 

(1,324

)

Deferred revenue

 

 

(4,523

)

 

 

(7,101

)

Net cash used in operating activities

 

 

(41,302

)

 

 

(38,952

)

Cash flows from investing activities

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(341

)

 

 

(3,852

)

Net cash used in investing activities

 

 

(341

)

 

 

(3,852

)

Cash flows from financing activities

 

 

 

 

 

 

Debt issuance costs for term loan

 

 

(18

)

 

 

 

Proceeds from issuance of common stock and pre-funded warrants from underwritten public offering, net of underwriting discounts and sales commissions and other offering costs

 

 

70,481

 

 

 

 

Proceeds from issuance of common stock from private placement

 

 

 

 

 

500

 

Payment of offering costs

 

 

 

 

 

(387

)

Proceeds from common stock issuances under ESPP

 

 

26

 

 

 

50

 

Other

 

 

(43

)

 

 

(156

)

Net cash provided by financing activities

 

 

70,446

 

 

 

7

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

28,803

 

 

 

(42,797

)

Cash, cash equivalents and restricted cash at the beginning of the period

 

 

146,540

 

 

 

90,517

 

Cash, cash equivalents and restricted cash at the end of the period

 

$

175,343

 

 

$

47,720

 

Cash and cash equivalents

 

 

172,743

 

 

 

45,083

 

Restricted cash

 

 

2,600

 

 

 

2,637

 

Cash, cash equivalents and restricted cash at the end of the period

 

$

175,343

 

 

$

47,720

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

2,655

 

 

$

2,399

 

Supplemental disclosure of noncash investing and financing activities:

 

 

 

 

 

 

Issuance of warrants in connection with private placement

 

 

 

 

252

 

Research and development license not yet paid

 

 

 

 

 

3,500

 

Offering costs not yet paid

 

 

445

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6


 

Note 1—Organization and Description of Business Operations

Taysha Gene Therapies, Inc. (the “Company” or “Taysha”) was originally formed under the laws of the State of Texas on September 20, 2019. Taysha converted to a Delaware corporation on February 13, 2020, which had no impact to the Company’s par value or issued and authorized capital structure.

Taysha is a clinical-stage biotechnology company focused on advancing AAV-based gene therapies for severe monogenic diseases of the central nervous system.

Sales Agreement

On October 5, 2021, the Company entered into a Sales Agreement (the “Sales Agreement”) with SVB Securities LLC (f/k/a SVB Leerink LLC) and Wells Fargo Securities, LLC (collectively, the “Sales Agents”), pursuant to which the Company may issue and sell, from time to time in its sole discretion, shares of its common stock having an aggregate offering price of up to $150.0 million through the Sales Agents. In March 2022, the Company amended the Sales Agreement to, among other things, include Goldman Sachs & Co. LLC as an additional Sales Agent. The Sales Agents may sell common stock by any method permitted by law deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) of the Securities Act, including sales made directly on or through the Nasdaq Global Select Market or any other existing trade market for the common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to prevailing market prices, or any other method permitted by law. The Sales Agents are entitled to receive 3.0% of the gross sales price per share of common stock sold under the Sales Agreement. In April 2022, the Company sold 2,000,000 shares of common stock under the Sales Agreement and received $11.6 million in net proceeds. No other shares of common stock have been issued and sold pursuant to the Sales Agreement as of June 30, 2024.

Liquidity and Capital Resources

The Company has incurred operating losses since inception and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. Losses are expected to continue as the Company continues to invest in its research and development activities. As of June 30, 2024, the Company had an accumulated deficit of $558.0 million. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future.

On June 26, 2024, the Company entered into an underwriting agreement (the “June 2024 Underwriting Agreement”) with Jefferies LLC and Goldman Sachs & Co. LLC, as representatives of the several underwriters set forth therein (collectively, the “Underwriters”), to issue and sell 14,361,113 shares of the Company’s common stock and, in lieu of common stock to certain investors, pre-funded warrants to purchase 18,972,221 shares of its common stock in an underwritten public offering (the “June 2024 Offering”), pursuant to an effective shelf registration statement on Form S-3 and a related prospectus and prospectus supplement. The offering price to the public was $2.25 per share of common stock and $2.249 per pre-funded warrant, which was the price to the public of each share of common stock sold in the June 2024 Offering minus the $0.001 exercise price per pre-funded warrant. The Underwriters purchased the shares and the pre-funded warrants from the Company pursuant to the June 2024 Underwriting Agreement at a price of $2.115 per share and $2.114 per pre-funded warrant, respectively. See Note 10 for additional information. The initial closing of the June 2024 Offering occurred on June 27, 2024. In addition, the Company granted the Underwriters an option to purchase, for a period of 30 days, up to an additional 5,000,000 shares of common stock. On July 9, 2024, the Underwriters exercised their option to purchase an additional 3,235,000 shares of common stock. The total net proceeds from the June 2024 Offering were approximately $76.8 million, including the proceeds from the Underwriter’s option, after deducting underwriting discounts and commissions and offering expenses. See Note 16 for additional information.

Future capital requirements will depend on many factors, including the timing and extent of spending on research and development and the market acceptance of the Company’s products. The Company will need to obtain additional financing in order to complete clinical studies and launch and commercialize any product candidates for which it receives regulatory approval. There can be no assurance that such financing will be available or will be on terms acceptable to the Company. As of June 30, 2024, the Company had cash and cash equivalents of $172.7 million, which the Company believes will be sufficient to fund its planned operations for a period of at least twelve months from the date of issuance of these unaudited condensed consolidated financial statements. The Company has based this estimate on assumptions that may prove to be wrong, and its operating plan may change as a result of many factors currently unknown to it. As a result, the Company could deplete its capital resources sooner than it currently expects. The Company expects to finance its future cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances or licensing arrangements. If the Company is unable to obtain funding, the Company would be forced to delay, reduce or eliminate some or all of its research and development programs, preclinical and clinical testing or commercialization efforts, which could adversely affect its business prospects.

7


 

 

Note 2—Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X and are consistent in all material respects with those included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on March 19, 2024 (the “2023 Annual Report”). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. The condensed consolidated balance sheet as of December 31, 2023 is derived from audited financial statements, however, it does not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes in the Company’s 2023 Annual Report.

Principles of Consolidation

The accompanying interim condensed consolidated financial statements include the accounts of Taysha and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The most significant estimates and assumptions in the Company’s financial statements relate to the determination of the fair value of the common stock prior to the initial public offering (“IPO”) (as an input into stock-based compensation), estimating manufacturing accruals and accrued or prepaid research and development expenses, the measurement of impairment of long-lived assets, the valuation of the Trinity Term Loans that are carried at fair value and the allocation of consideration received in connection with the Astellas Transactions (as defined below). These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Significant Accounting Policies

There have been no changes in the Company’s significant accounting policies as disclosed in Note 2 to the audited consolidated financial statements included in the 2023 Annual Report.

 

Recently Adopted Accounting Pronouncements

There have been no significant changes in recently adopted accounting pronouncements from those disclosed in the section titled “Financial Statements and Supplementary Data” included in the 2023 Annual Report.

 

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures, to improve segment disclosure requirements under ASC 280, Segment Reporting, through enhancing disclosures about significant segment expenses. The guidance requires entities to provide significant segment expenses that are regularly provided to the chief operating decision maker and other segment expenses included in each reported measure of segment profitability. The ASU also enhances interim segment reporting requirements by aligning interim disclosures with information that must be disclosed annually in accordance with ASC 280. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods

8


 

beginning after December 15, 2024, applied retrospectively with early adoption permitted. The Company is still evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

Note 3—Fair Value Measurements

 

The Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds, the Trinity Term Loans, a success fee derivative liability and certain of the Company’s warrant liabilities.

 

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values (in thousands):

 

 

June 30, 2024

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

   Cash equivalents – money market funds

$

172,103

 

 

$

172,103

 

 

$

 

 

$

 

Total assets

$

172,103

 

 

$

172,103

 

 

$

 

 

$

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

   Trinity Term Loans

$

37,835

 

 

$

 

 

$

 

 

$

37,835

 

   Success Fee Derivative liability

 

800

 

 

 

 

 

 

 

 

 

800

 

   SSI Warrant liability

 

596

 

 

 

 

 

 

 

 

 

596

 

Total liabilities

$

39,231

 

 

$

 

 

$

 

 

$

39,231

 

 

 

 

December 31, 2023

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

   Cash equivalents – money market funds

 

$

142,425

 

 

$

142,425

 

 

$

 

 

$

 

Total assets

$

142,425

 

 

$

142,425

 

 

$

 

 

$

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

   Trinity Term Loans

$

40,508

 

 

$

 

 

$

 

 

$

40,508

 

   Success Fee Derivative liability

 

800

 

 

 

 

 

 

 

 

 

800

 

   SSI Warrant liability

 

454

 

 

 

 

 

 

 

 

 

454

 

Total liabilities

$

41,762

 

 

$

 

 

$

 

 

$

41,762

 

 

 

The Company classifies its money market funds, which are valued based on quoted market prices in an active market with no valuation adjustment, as Level 1 assets within the fair value hierarchy.

The Company’s Trinity Term Loans and Success Fee liability are classified as Level 3 measurements under the fair value hierarchy as the fair values were determined based on significant inputs not observable in the market. The fair values were determined utilizing a probability-weighted income approach, including variables for the timing of a success event and other probability estimates. See Note 7 for additional information on the Trinity Term Loans and Success Fee.

The Company’s SSI Warrant liability is classified as Level 3 measurements under the fair value hierarchy as the fair values were determined based on significant inputs not observable in the market. The fair values were determined using the Black-Scholes-Merton option pricing model to determine the fair value of the SSI Warrants (as defined below). See Note 10 for additional information on the SSI Warrants.

9


 

Note 4—Balance Sheet Components

Prepaid expenses and other current assets consisted of the following (in thousands):

 

 

 

June 30,
2024

 

 

December 31,
2023

 

Prepaid research and development

 

$

1,502

 

 

$

1,412

 

Prepaid clinical trial

 

 

674

 

 

 

802

 

Deferred offering costs

 

 

601

 

 

 

681

 

Prepaid insurance

 

 

165

 

 

 

292

 

Prepaid bonus

 

 

130

 

 

 

 

Other

 

 

206

 

 

 

292

 

Total prepaid expenses and other current assets

 

$

3,278

 

 

$

3,479

 

 

Property, plant and equipment, net consisted of the following (in thousands):

 

 

 

June 30,
2024

 

 

December 31,
2023

 

Leasehold improvements

 

$

2,117

 

 

$

2,117

 

Laboratory equipment

 

 

3,008

 

 

 

2,868

 

Computer equipment

 

 

1,271

 

 

 

1,133

 

Furniture and fixtures

 

 

864

 

 

 

864

 

Construction in progress

 

 

6,882

 

 

 

6,823

 

 

 

14,142

 

 

 

13,805

 

Accumulated depreciation

 

 

(3,629

)

 

 

(2,979

)

Property, plant and equipment, net

 

$

10,513

 

 

$

10,826

 

 

Property, plant and equipment, net includes $0.8 million and $1.0 million of assets capitalized as finance leases as of June 30, 2024 and December 31, 2023, respectively.

Depreciation expense was $0.3 million and $0.4 million for the three months ended June 30, 2024 and 2023, respectively. Depreciation expense was $0.6 million and $0.7 million for the six months ended June 30, 2024 and 2023, respectively.

Accrued expenses and other current liabilities consisted of the following (in thousands):

 

 

 

June 30,
2024

 

 

December 31,
2023

 

Accrued research and development

 

$

2,613

 

 

$

3,467

 

Accrued compensation

 

 

2,885

 

 

 

3,423

 

Accrued clinical trial

 

 

2,178

 

 

 

1,851

 

Lease liabilities, current portion

 

 

1,754

 

 

 

1,646

 

Accrued professional and consulting fees

 

 

1,072

 

 

 

330

 

Warrant liability

 

 

596

 

 

 

454

 

Accrued severance

 

 

 

 

 

390

 

Other

 

 

777

 

 

 

723

 

Total accrued expenses and other current liabilities

 

$

11,875

 

 

$

12,284

 

 

Note 5— Leases

The Company leases certain office, laboratory, and manufacturing space.

Dallas Lease

On January 11, 2021, the Company entered into a lease agreement (the “Dallas Lease”) with Pegasus Park, LLC, a Delaware limited liability company (the “Dallas Landlord”), pursuant to which the Company leases approximately 15,000 square feet of office space at 3000 Pegasus Park Drive, Dallas, Texas 75247 (the “Office Space”).

10


 

The Dallas Lease commenced on May 27, 2021, and has a term of approximately ten years. The Company has an option to extend the term of the Dallas Lease for one additional period of five years.

The Dallas Landlord has the right to terminate the Dallas Lease, or the Company’s right to possess the Office Space without terminating the Dallas Lease, upon specified events of default, including the Company’s failure to pay rent in a timely manner and upon the occurrence of certain events of insolvency with respect to the Company.

Dallas Lease Expansion

On December 14, 2021, the Company amended the Dallas Lease (the “Dallas Lease Amendment”) with the Dallas Landlord, pursuant to which the Company leases approximately 18,000 square feet of office space adjacent to the Office Space at 3000 Pegasus Park Drive, Dallas, Texas 75247 (the “Expansion Premises”).

The Dallas Lease Amendment commenced on July 1, 2022, and has a term of approximately ten years.

The Company is obligated to pay operating costs and utilities applicable to the Expansion Premises. Total future minimum lease payments under the Dallas Lease Amendment over the initial 10 year term are approximately $6.0 million. The Company is responsible for costs of constructing interior improvements within the Expansion Premises that exceed a $40.00 per rentable square foot construction allowance provided by the Dallas Landlord.

The Company has a right of first refusal with respect to certain additional office space on the 15th floor at 3000 Pegasus Park Drive, Dallas, Texas 75247 before the Dallas Landlord accepts any offer for such space.

Durham Lease

On December 17, 2020, the Company entered into a lease agreement (the “Durham Lease”) with Patriot Park Partners II, LLC, a Delaware limited liability company (the “Durham Landlord”), pursuant to which the Company agreed to lease approximately 187,500 square feet of a manufacturing facility located at 5 National Way, Durham, North Carolina (the “Facility”). The Durham Lease commenced on April 1, 2021 and is expected to have a term of approximately fifteen years and six months. The Company has two options to extend the term of the Durham Lease, each for a period of an additional five years.

The Company was not required to provide a security deposit in connection with its entry into the Durham Lease. The Company was responsible for constructing interior improvements within the Facility. The Company was required to place $2.6 million in an escrow account which was to be released when the improvements were substantially complete. In December 2023, the Company entered into an agreement with the landlord whereby the Company agreed to remove specified leasehold improvements which will be funded by the escrowed funds. The escrow funds are recorded as restricted cash on the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 with $0.5 million recorded in current assets and $2.1 million in noncurrent assets. The Durham Landlord has the right to terminate the Durham Lease upon specified events of default, including the Company’s failure to pay rent in a timely manner and upon the occurrence of certain events of insolvency with respect to the Company.

Summary of all lease costs recognized under ASC 842

The following table summarizes the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases for the three and six months ended June 30, 2024 and 2023 (in thousands):

 

 

Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

2024

 

2023

 

 

2024

 

 

2023

 

Operating lease cost

$

675

 

$

708

 

 

$

1,321

 

 

$

1,360

 

Variable lease cost

 

198

 

 

243

 

 

 

396

 

 

 

486

 

Total lease cost

$

873