PASG

Passage BIO, Inc. (PASG) - 10-Q Summary for Period Ended June 30, 2026

Business Context and Reporting Period

This Quarterly Report on Form 10-Q covers the period ended June 30, 2026. Passage BIO, Inc. is a clinical-stage genetic medicines company that has determined to wind down its gene therapy programs. On June 24, 2026, the Company entered into a definitive Merger Agreement with Remix Therapeutics, Inc. (Remix). Upon closing, expected in Q4 2026, Passage BIO will change its name to Remix Therapeutics, Inc., and the surviving entity will pursue Remix's business activities. The Company is currently operating as a remote-only entity with no physical headquarters.

Key Financial Metrics

Note: The Company has no product revenue. Operating expenses consist primarily of Research and Development (R&D) and General and Administrative (G&A) costs.

Material Changes vs. Prior Period

• Net Loss Improvement: Net loss decreased to $7.8 million for the three months ended June 30, 2026, from $9.4 million in the same period in 2025. For the six months, the loss decreased to $15.4 million from $24.8 million.
• Expense Reductions: R&D expenses decreased by $2.5 million (Q3) and $6.1 million (YTD) compared to the prior year, driven by reduced clinical activity, facility costs, and headcount reductions. G&A expenses increased by $2.4 million (Q3) and $1.1 million (YTD), primarily due to professional fees associated with the Merger.
• Lease Terminations: The Company recognized a net gain of $1.9 million in Q3 and $2.6 million YTD from the termination of its Philadelphia office and Hopewell, NJ laboratory leases. This offset a portion of operating losses.
• Asset Write-downs: Unlike the prior year, no impairment of long-lived assets was recorded in 2026. The Company disposed of property and equipment and terminated all operating lease obligations.
• Workforce Restructuring: In April 2026, the Company announced a restructuring plan reducing the workforce by approximately 75%, incurring approximately $3.3 million in severance costs.

Guidance, Outlook, Risks, and Unusual Items

• Merger Transaction: The Company is pursuing a merger with Remix Therapeutics. Remix is expected to raise approximately $100 million in concurrent financing ($70M equity, $30M convertible notes). Passage BIO shareholders are expected to own approximately 6% of the combined company, while Remix shareholders will own approximately 65%.
• Contingent Value Rights (CVRs): Existing shareholders will receive CVRs entitling them to a pro-rata share of future milestone payments from Gemma Biotherapeutics regarding the outlicensed GM1 and MLD programs. These payments are uncertain and subject to deductions.
• Going Concern: The Company has raised substantial doubt about its ability to continue as a going concern within one year. Cash of $24.2 million is deemed insufficient to fund operations for the next 12 months absent the completion of the Merger or additional financing.
• Unusual Items:
  • Non-refundable Payments: $16.3 million in payments received from Gemma (sublicense and transition services) are recorded as liabilities, not revenue, as performance obligations have not been met.
  • Severance Costs: Approximately $3.2 million in severance costs were recorded in Q2 2026 related to the 75% workforce reduction.
• Risks: Risks include failure to close the Merger, inability to secure additional funding, and the uncertainty of future payments from Gemma. The Company has terminated its lead program (PBFT02) and collaboration agreements with Penn and Gemma.

Investor Verification Checklist

• Merger Closing Conditions: Verify the status of the S-4 registration statement and shareholder approval requirements for the Remix merger.
• Cash Runway: Confirm the sufficiency of the $24.2 million cash balance to sustain operations until the expected Q4 2026 closing.
• CVR Valuation: Assess the likelihood and timing of future milestone payments from Gemma that would trigger CVR payouts.
• Liability Classification: Review the $16.3 million liability related to Gemma payments to understand the conditions required for revenue recognition.
• Termination Fees: Note the $1.5 million termination fee payable to Remix if the Merger is terminated under specific circumstances.