Passage Bio, Inc. (NASDAQ:PASG) is a clinical stage genetic medicines company focused on developing cutting-edge, one-time therapies to treat neurodegenerative diseases. Passage Bio has a strategic research collaboration with the University of Pennsylvania's Gene Therapy Program (GTP), which has provided them with a robust pipeline of product candidates targeting various central nervous system (CNS) disorders.

Passage Bio's primary focus is the development and advancement of its lead clinical product candidate, PBFT02, for the treatment of frontotemporal dementia (FTD) caused by progranulin deficiency (FTD-GRN). PBFT02 utilizes an adeno-associated virus serotype 1 (AAV1) capsid to deliver a functional copy of the GRN gene, which encodes for progranulin, a protein critical for maintaining lysosomal function and preventing neurodegeneration. Passage Bio is currently studying PBFT02 in an international, multi-center, open-label, single-arm Phase 1/2 clinical trial called upliFT-D.

In addition to PBFT02 for FTD-GRN, Passage Bio is exploring the potential of PBFT02 in other adult neurodegenerative diseases where increasing progranulin levels could provide benefits, such as FTD caused by C9orf72 mutations (FTD-C9orf72) and amyotrophic lateral sclerosis (ALS). Passage Bio expects to obtain regulatory feedback on the clinical pathway for these additional indications in the second half of 2024.

Passage Bio also has three additional clinical-stage product candidates - PBGM01 for GM1 gangliosidosis, PBKR03 for Krabbe disease, and PBML04 for metachromatic leukodystrophy. However, in order to reduce operating expenses, Passage Bio has stopped further clinical development of these programs and is pursuing out-licensing opportunities.

Financials

For the full year 2023, Passage Bio reported an annual net loss of $102.1 million, with no revenue generated. Passage Bio's annual operating cash flow was -$78.3 million, and its annual free cash flow was -$78.4 million.

In the first quarter of 2024, Passage Bio reported a net loss of $16.7 million. Research and development expenses decreased by $5.3 million to $11.5 million, while general and administrative expenses decreased by $12.5 million to $6.5 million. Passage Bio had $104.5 million in cash, cash equivalents, and marketable securities as of March 31, 2024, which it expects will fund its operations into the fourth quarter of 2025.

As of March 31, 2024, Passage Bio had $104.5 million in cash, cash equivalents, and marketable securities. Passage Bio expects this cash position to fund its operating expenses and capital expenditure requirements into the fourth quarter of 2025.

To support its ongoing operations, Passage Bio entered into an at-the-market (ATM) equity offering program in 2021, under which it may offer and sell shares of its common stock with an aggregate offering price of up to $125.0 million. During the first quarter of 2024, Passage Bio issued 6,000,000 shares under the ATM Facility, resulting in net proceeds of $8.7 million.

Risks and Challenges

Passage Bio faces several risks and challenges common to the biotechnology industry, including the inherent uncertainty of clinical development, regulatory approval, and commercialization of its product candidates. Passage Bio's sole clinical-stage product candidate, PBFT02, is still in early-stage trials, and there is no guarantee it will successfully advance through clinical development and obtain regulatory approval.

Additionally, Passage Bio relies heavily on its collaboration with the University of Pennsylvania's GTP for the discovery and preclinical development of its product candidates. Any disruption or termination of this collaboration could significantly impact Passage Bio's pipeline and future prospects.

Passage Bio also faces competition from other biotechnology and pharmaceutical companies developing gene therapies and treatments for neurodegenerative diseases. Successful competitors could delay or prevent Passage Bio's products from reaching the market, which would have a material adverse effect on Passage Bio's business.

Outlook

Passage Bio has not provided specific financial guidance for the full year 2024. However, Passage Bio has stated that its existing cash, cash equivalents, and marketable securities are expected to fund its operating expenses and capital expenditure requirements into the fourth quarter of 2025.

Passage Bio's primary focus in the near-term will be on advancing its lead candidate, PBFT02, through the ongoing upliFT-D clinical trial. Passage Bio expects to report six-month safety and biomarker data from Cohort 1 of the upliFT-D trial in the second half of 2024, and initial safety and biomarker data from Cohort 2 in the first half of 2025.

Additionally, Passage Bio plans to obtain regulatory feedback on the clinical pathway for evaluating PBFT02 in FTD-C9orf72 and ALS patients in the second half of 2024. Passage Bio is also exploring potential out-licensing opportunities for its pediatric portfolio of clinical programs, including GM1 gangliosidosis, Krabbe disease, and metachromatic leukodystrophy.

Conclusion

Passage Bio is a clinical-stage genetic medicines company with a focus on developing novel therapies for neurodegenerative diseases. Passage Bio's lead candidate, PBFT02, is currently being evaluated in a Phase 1/2 clinical trial for the treatment of FTD-GRN, and Passage Bio is exploring its potential in additional adult neurodegenerative indications.

While Passage Bio faces the typical risks and challenges associated with clinical-stage biotechnology companies, its strategic collaboration with the University of Pennsylvania's GTP and its robust pipeline of product candidates provide a solid foundation for Passage Bio's future growth. Investors will be closely watching the progress of the PBFT02 clinical program and Passage Bio's efforts to out-license its pediatric portfolio as it works to advance its mission of improving the lives of patients with neurodegenerative diseases.