SION

Business Context and Reporting Period

Sionna Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing novel medicines to treat cystic fibrosis (CF) by stabilizing the nucleotide binding domain 1 (NBD1) of the CFTR protein. The company completed its initial public offering (IPO) in February 2025. This Form 10-Q covers the quarterly and nine-month periods ended September 30, 2025.

Key Financial Metrics

Material Changes vs. Prior Period

• Net Loss Increase: Net loss for the nine months ended September 30, 2025, increased by $9.0 million compared to the same period in 2024, primarily driven by higher operating expenses.
• Operating Expenses: Total operating expenses rose by $13.0 million year-over-year. General and administrative expenses increased by $10.9 million, largely due to a $7.3 million increase in personnel-related costs (including stock-based compensation) and a $3.3 million increase in professional fees associated with public company operations.
• R&D Expenses: R&D expenses increased by $2.1 million year-over-year. This was driven by a $10.4 million increase in direct R&D expenses for clinical programs, partially offset by a $13.6 million decrease in one-time in-process research and development (IPR&D) acquisition costs incurred in Q3 2024.
• Liquidity: Cash and marketable securities increased significantly from $150.0 million at December 31, 2024, to $325.0 million at September 30, 2025, following the February 2025 IPO which raised approximately $199.6 million in net proceeds.

Guidance, Outlook, and Risks

Outlook and Liquidity: Management believes existing cash, cash equivalents, and marketable securities of $325.0 million are sufficient to fund operations into 2028. The company expects to continue incurring significant operating losses as it advances clinical development.

Clinical Progress:

• SION-719: Initiated a Phase 2a proof-of-concept trial (PreciSION CF) in October 2025 to evaluate the drug as an add-on to the standard of care (Trikafta).
• SION-451: Initiated a Phase 1 dual combination trial in August 2025 with complementary modulators (SION-2222 and SION-109). Topline data for both trials are anticipated in mid-2026.

Risks and Contingencies:

• Capital Needs: The company has no revenue and will require substantial additional funding to complete development and commercialization. Failure to raise capital could force delays or termination of programs.
• Regulatory and Clinical Risk: Success depends on the safety and efficacy of NBD1 stabilizers, a novel target. Clinical trials may fail, or regulatory approval may be delayed or denied.
• Competition: Faces substantial competition from Vertex Pharmaceuticals, which holds significant market share and resources in the CF market.
• Third-Party Dependence: Relies on third parties for manufacturing and clinical trial execution, introducing supply chain and operational risks.

Investor Verification Checklist

• Cash Runway: Verify the $325.0 million liquidity position and the assumption that it funds operations into 2028 given the burn rate of approximately $55 million for the first nine months of 2025.
• Expense Trajectory: Monitor the trend in General and Administrative expenses, which more than doubled year-over-year due to public company costs and headcount growth.
• Clinical Milestones: Track the initiation and enrollment progress of the Phase 2a trial for SION-719 and the Phase 1 dual combination trial for SION-451, with data expected in mid-2026.
• IPR&D Volatility: Note that Q3 2024 included a $13.6 million one-time charge for IPR&D acquisition; future quarters may not include similar non-recurring costs, making direct expense comparisons sensitive to timing.
• Stock-Based Compensation: Review the $8.2 million in stock-based compensation expense for the nine months ended September 30, 2025, and the $32.0 million of unrecognized expense remaining.