Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

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1. Description of Business and Basis of Presentation

Description of Business-Lexeo Therapeutics, Inc. (the "Company") is a clinical stage genetic medicine company with a focus on hereditary and acquired diseases of high unmet need. The Company's investigational therapies have the potential to offer gene therapy-based treatments to address many diseases that have eluded today's existing drug delivery platforms. The Company utilizes adeno-associated viruses ("AAV") that have been engineered to transfer genes to patients. The Company's therapeutic investigational treatments include gene therapies primarily in the early clinical and late pre-clinical stages of research and development.

The Company is located in New York, NY and was first formed on February 17, 2017, as an LLC under the laws of the State of Delaware under the legal name Lexeo Therapeutics, LLC. The Company filed and executed a certificate of conversion to corporation on November 20, 2020, to convert the LLC to Lexeo Therapeutics, Inc, a Delaware corporation. All of the Company's tangible assets are held in the United States ("U.S.").

Basis of Presentation and Principles of Consolidation-The Company's fiscal year ends on December 31, and its fiscal quarters end on March 31, June 30, and September 30.

These unaudited condensed financial statements and accompanying notes reflect the operations of the Company that have been prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. These unaudited condensed financial statements and accompanying notes should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2023 (the "Annual Financial Statements") included in the Company's Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission on March 11, 2024. The unaudited condensed balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly the financial position of the Company and its results of operations and cash flows for the periods presented have been included. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, for any other interim period, or for any other future year.

Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Updates ("ASU") of the Financial Accounting Standards Board ("FASB"). The Company has no unconsolidated subsidiaries. Certain prior period balances have been reclassified to conform to the current period presentation.

A 10.594230-for-1reverse share split of the Company's series A convertible preferred stock, series B convertible preferred stock, common stock, and options to purchase common stock under the Company's 2021 Equity Incentive Plan (as defined in Note 8), as well as corresponding adjustments in the respective conversion prices of the series A convertible preferred stock and series B convertible preferred stock, was effected on October 13, 2023 as approved by the Company's board of directors (the "Board of Directors") and its shareholders (the "Stock Split"). The Stock Split reduced the number of shares of the Company's authorized, issued and outstanding common stock, as well as the numbers of shares reserved and available for future issuance and underlying outstanding options to purchase common stock under its 2021 Equity Incentive Plan, on a 10.594230-for-1basis. As such, all references to series A convertible preferred stock and series B convertible preferred stock conversion ratios, conversion share and per share amounts, and post- conversion share and per share amounts, as well as common stock option, option per common share, common share and common per share amounts, in these unaudited condensed financial statements and accompanying notes have been retroactively restated to reflect the Stock Split and the Stock Split's effect on the respective series A convertible preferred stock and series B convertible preferred stock conversion ratios for each series of convertible preferred stock. The Stock Split did not affect the par values per share.

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Need for Additional Capital-Since inception, the Company has incurred net losses and negative cash flows from operations, including net losses of $72.4million and $66.4million during the nine months ended September 30, 2024 and the year ended December 31, 2023, respectively. As of September 30, 2024, the Company had cash and cash equivalents of $157.0million and an accumulated deficit of $254.2million and expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future. During the years ended December 31, 2021 and December 31, 2020, the Company raised aggregate total net proceeds of $185.0million in connection with the issuance of series A and series B convertible preferred stock. During the year ended December 31, 2023 the Company raised $100.3million of total net proceeds in connection with the closing of its initial public offering ("IPO") on November 7, 2023 and subsequent partial exercise of the underwriters' option to purchase additional shares, as well $3.9million of net proceeds from the issuance of a convertible Simple Agreement for Future Equity ("SAFE") note (the "convertible SAFE Note") in August 2023. During the nine months ended September 30, 2024, the Company received total net proceeds of $88.7million after deducting underwriting commissions and offering expenses in a private placement offering of its common stock (see Note 8). Management estimates that the Company's current cash and cash equivalents balance is sufficient to fund its operations for at least 12 months from the issuance date of these unaudited condensed financial statements.

If the Company is unable to obtain additional funding before achieving sufficient profitability and positive cash flows from operations, if ever, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, which could adversely affect its business prospects, or the Company may be unable to continue operations. Although management continues to pursue plans to obtain additional funding before achieving sufficient profitability and positive cash flows from operations, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.

Risks and Uncertainties-The Company is subject to risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including, but not limited to, successful discovery and development of its product candidates, development by competitors of new technological innovations, dependence on key personnel, the ability to attract and retain qualified employees, protection of proprietary technology, compliance with governmental regulations, the ability to secure additional capital to fund operations, and commercial success of its product candidates. Any of the Company's current product candidates and future product candidates that it may develop will require extensive nonclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, infrastructure, and extensive compliance- reporting capabilities. Even if the Company's product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

2. Summary of Significant Accounting Policies

There have been no significant changes in the Company's accounting policies from those disclosed in its Annual Financial Statements.

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3. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of inputs that may be used to measure fair value are as follows:

Level 1-Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2-Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3-Inputs are unobservable inputs for the asset or liability.

The Company's cash equivalents consist of investments in a U.S. government money market fund stated at carrying value, which approximates fair value and is based on quoted prices in active markets for identical securities. Cash is stated at carrying value, which approximates fair value due to its short-term nature. The carrying values of the Company's prepaid expenses, other current assets, accounts payable and accrued expenses approximate their fair values due to their short-term nature.

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4. Property and Equipment

5. Accrued Expenses and Other Current Liabilities

6. Leases

Operating Lease Right-of-Use Asset

In January 2022, the Company entered into a lease agreement for an office facility and laboratory space in New York, New York that commenced in April 2022and ends in July 2029with an additional five-year option to extend the lease beyond July 2029 at the then-prevailing effective market rental rate. Upon commencement of this lease, the Company recorded operating lease right-of-use assets and operating lease liabilities of $11.6million based on the present value of payments over the lease term using an estimated incremental borrowing rate of 8.53% in accordance with the provisions of ASC Topic 842, Leases("ASC 842"). In connection with the Company's lease of office space and laboratory space, the Company provided a security deposit to the landlord in the form of a letter of credit totaling $1.2million. The cash collateralizing the letter of credit was included in long-term restricted cash in the Company's condensed balance sheets as of September 30, 2024 and December 31, 2023. This lease was classified as an operating lease in accordance with the provisions of ASC 842. The Company did not recognize any right-of-use assets and lease liabilities associated with the potential option to renew or extend. The Company's operating lease agreement does not contain any significant residual value guarantees or restrictive covenants.

The remaining lease terms and payment terms as of September 30, 2024 and December 31, 2023 were 4.8years and 5.6years, respectively. The components of this operating lease were as follows:

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Equipment Finance Leases

Commencing in April 2022, the Company leases certain laboratory equipment under financing arrangements accounted for as finance leases in accordance with the provision of ASC 842 that are classified in the Company's condensed balance sheet as finance lease liabilities with related right-of-use assets recorded and depreciated on a straight-line basis over the estimated useful life of 7years. The total gross, accumulated amortization, and net book values of equipment finance lease right-of-use assets capitalized under such finance lease arrangements at September 30, 2024 were $2.2million, $0.7million and $1.5million, respectively. Under the terms of the equipment finance lease agreements executed through the issuance of these unaudited condensed financial statements, the principal balances plus interest for the equipment are to be repaid in full after 60monthly installments following lease commencement, with lease commencement dates ranging from April 1, 2022to April 1, 2023, annual imputed interest rates ranging from 7.90% to 9.30%, and monthly installment payment amounts ranging from approximately $4,000to $18,000. As of September 30, 2024, the total aggregate monthly installment payment amount was approximately $49,000for equipment finance lease agreements executed through the issuance date of these unaudited condensed financial statements.

The weighted-average remaining lease payment term, weighted-average remaining amortization term, and weighted-average effective interest rate for the Company's equipment finance lease agreements as of September 30, 2024 were 2.9years, 5.1years, and 8.58%, respectively. The weighted-average remaining lease payment term, weighted-average remaining amortization term, and weighted-average effective interest rate for the Company's equipment finance lease agreements as of December 31, 2023 were 3.7years, 5.7years, and 8.59%, respectively. The components of the equipment finance leases were as follows:

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The following table provides a reconciliation of the Company's remaining equipment finance lease obligations due within each year ending December 31 to the equipment finance lease liabilities recognized at September 30, 2024:

7. Convertible SAFE Note

On August 24, 2023, the Company entered into the convertible SAFE Note with Sarepta Therapeutics, Inc. in a principal amount of $4.0million bearing simple interest at an annual rate of 10% to be repaid after one year in the absence of the occurrence of certain settlement events. The convertible SAFE Note was accounted for as a liability in accordance with the provisions of ASC Topic 480, Distinguishing Liabilities from Equity, with changes in estimated fair value recognized in earnings. In connection with the convertible SAFE Note, the Company incurred issuance costs of $0.1million that were recorded as a discount to the liability balance and amortized to interest expense over the term of the convertible SAFE Note. During the three months ended September 30, 2023 (inception of the convertible SAFE Note), the estimated fair value of the convertible SAFE Note, gross of unamortized discount, increased by $272,000to $4.1million. Upon the declaration of effectiveness of the Company's IPO registration statement on November 2, 2023, the carrying value of the convertible SAFE Note of $4.4million, net of unamortized discount, automatically converted into 411,815shares of the Company's common stock (see Note 8).

8. Capital Stock

As of September 30, 2024 and December 31, 2023, the Company's amended and restated certificate of incorporation provided that the authorized capital stock of the Company was 510,000,000shares consisting of 500,000,000shares of common stock and 10,000,000shares of undesignated preferred stock, both with a par value of $0.0001per share. As of September 30, 2024 and December 31, 2023, 33,070,045shares and 26,668,485shares, respectively, of the Company's common stock authorized were issued, including 11,598shares and 22,107shares, respectively, that were legally issued upon the early exercise of unvested stock options and that are excluded from the number of shares outstanding until the right to repurchase subsequently lapses upon vesting. The Company did not repurchase any shares of common stock during the three months ended September 30, 2024, and repurchased a total of 2,991shares of common stock issued pursuant to the early exercise of stock options granted under the 2021 Plan for a total of approximately $13,000during the nine months ended September 30, 2024, which was recorded to treasury stock in the Company's condensed balance sheet (see Note 9). Each common share entitles the holder to one vote on all matters submitted to a vote of the Company's stockholders. Common stockholders are entitled to receive dividends, if any, as may be declared by the Company's Board of Directors. Nocash dividends have been declared or paid by the Company.

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Upon the declaration of effectiveness of the Company's IPO registration statement on November 2, 2023, the Company's outstanding convertible SAFE Note automatically converted into 411,815shares of common stock (see Note 7). Upon the closing of the Company's IPO on November 7, 2023, the Company issued and sold 9,090,910shares of its common stock, and subsequently, the underwriters partially exercised their associated 30-day option to purchase additional shares of common stock with 1,048,746additional shares issued. The net proceeds to the Company from the IPO and subsequent partial exercise of the underwriters' 30-day option to purchase additional shares were approximately $100.3million based on the initial offering price of $11.00per share, after deducting underwriting discounts, commissions and offering expenses totaling $11.3million. Also upon the closing of the Company's IPO on November 7, 2023, all 85,495,722then outstanding shares of the Company's series A convertible preferred stock and all 58,157,823then outstanding shares of the Company's series B convertible preferred stock converted into 8,070,027shares and 6,386,337shares of common stock, respectively, including 896,764shares of common stock issued as a result of series B convertible preferred stock antidilution provisions. On March 11, 2024, the Company entered into a common stock purchase agreement to issue and sell an aggregate of 6,278,905shares of its common stock at a price of $15.13per share, in a private placement that closed on March 13, 2024 (the "Private Placement"). The gross and net proceeds received from the Private Placement were approximately $95.0million and $88.7million, respectively, after deducting approximately $6.3million of commissions and other offering costs.

9. Stock-based Compensation

In February 2021, the Company adopted the 2021 Equity Incentive Plan (the "2021 Plan") for the issuance of stock options to the Company's key directors, officers, employees and consultants, as a means to secure the benefits arising from capital stock ownership. In connection with the Company's IPO in November 2023, the Company adopted the 2023 Equity Incentive Plan (the "2023 Plan") and the 2023 Employee Stock Purchase Plan (the "2023 ESPP" and collectively with the 2021 Plan and 2023 Plan, the "Plans"). The purposes of the Plans are to promote the alignment of the interests of key directors, officers, employees, and consultants with the success of the Company and to provide compensation opportunities to attract, retain and motivate directors, officers, employees, and consultants of the Company.

Upon adoption, the maximum number of shares of common stock that may be issued under the 2023 Plan was initially 4,737,000shares, which was approximately the sum of (i) 1,803,980new shares, plus (ii) the 2021 Plan's available reserve, plus (iii) the number of returning shares, if any, upon the cancellation or forfeiture of equity awards that are outstanding under the 2021 Plan. In addition, the number of shares of common stock reserved for issuance under the 2023 Plan will automatically increase on January 1 of each year, beginning on January 1, 2024, and continuing through and including January 1, 2033, by 5% of the total number of shares of common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by the Company's Board of Directors prior to the applicable January 1. Upon adoption, the maximum number of shares of common stock that may be issued under the 2023 ESPP was initially 238,600shares. The number of shares of common stock reserved for issuance under the 2023 ESPP will automatically increase on January 1 of each calendar year, beginning on January 1, 2024 and continuing through and including January 1, 2033, by the lesser of (i) 1% of the total number of shares of capital stock outstanding on December 31 of the preceding calendar year, (ii) 477,200shares and (iii) a number of shares determined by the Company's Board of Directors. Shares subject to purchase rights granted under the 2023 ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the 2023 ESPP.

On January 1, 2024, the number of shares of common stock reserved for issuance under the 2023 Plan and the 2023 ESPP automatically increased by 1,333,424shares and 266,684shares, respectively, to totals of 6,070,424shares and 505,284shares, respectively. As of September 30, 2024, 2,175,005shares and 505,284shares were available for future issuance under the 2023 Plan and 2023 ESPP, respectively. Noshares have been issued under the 2023 ESPP through September 30, 2024.

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Stock option activity

Stock options granted under the 2021 Plan generally (i) are subject to requisite service requirements, (ii) vest over a four-yearperiod with 25% of the options granted vesting after one year and the remainder vesting in equal monthly installments over the following 36 months, and (iii) allow for early exercise subject to repurchase. Stock options granted under the 2021 Plan to certain of the Company's non-employees vest in equal monthly installments over a four-yearperiod or vested upon the achievement of a certain milestone event. The Company did not repurchase any shares of common stock during the three months ended September 30, 2024, and repurchased a total of 2,991shares of common stock issued pursuant to the early exercise of stock options granted under the 2021 Plan for a total of approximately $13,000during the nine months ended September 30, 2024, which was recorded to treasury stock in the Company's condensed balance sheet (see Note 8).

Stock options granted under the 2023 Plan generally (i) are subject to requisite service requirements, and (ii) vest over a four-yearperiod with 25% of the options granted vesting after one year and the remainder vesting in equal monthly installments over the following 36 months. Stock options granted under the 2023 Plan to certain of the Company's non-employees vest in equal annual installments over a three-yearperiod or over a one-yearperiod.

The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2023 was $13.71per share. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company's common stock for those stock options that had exercise prices lower than the fair value of the Company's common stock. The total intrinsic value of stock options exercised during the nine months ended September 30, 2023 was $39,000.

The total grant date fair values of stock options vested during the three months ended September 30, 2024 and September 30, 2023 were $1.3million and $1.0million, respectively. The total grant date fair values of stock options vested during the nine months ended September 30, 2024 and September 30, 2023 were $2.9million and $1.8million, respectively.

The expected dividend yield is 0.00% as the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

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RSU activity

RSUs granted under the 2023 Plan generally (i) are subject to requisite service requirements, and (ii) vest over a four-yearperiod with 25% of the RSUs granted vesting after approximately one year and the remainder vesting in equal quarterly installments over the following 12 quarters.

Stock-based compensation expense

As of September 30, 2024, there was $20.8million of unrecognized stock-based compensation expense related to unvested stock options and RSUs estimated to be recognized over a weighted-average period of 1.37 years.

10. Net Loss per Share

11. Commitments and Contingencies

Leases-As of September 30, 2024, the Company had entered into commitments under lease agreements to rent laboratory and office space and finance equipment (see Note 6).

Commitments-As of September 30, 2024, the Company had entered into commitments under license, acquisition, research collaboration and sponsored research agreements with third parties (see Note 12). In addition, the Company has entered into services agreements with third parties for pharmaceutical manufacturing and research activities in the normal course of business, which can generally be terminated by the Company with 30- to 60-days' written notice, unless otherwise indicated. Further, certain of the Company's manufacturing agreements could require early termination and wind-down payments due from the Company upon either the termination of its clinical trials or if the Company terminates such agreements for convenience.

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Contingencies-From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company recognizes any associated legal fees as incurred and accrues a liability for such contingent liability matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. For all periods presented, the Company was not a party to any pending material litigation or other material legal proceedings, except that on October 12, 2023, Rocket Pharmaceuticals, Inc. ("Rocket") filed a lawsuit in the U.S. District Court for the Southern District of New York against the Company and two individuals claiming, among other things, misappropriation of confidential information and trade secrets. The individual defendants are twoformer employees of the Company's analytical development team, both of whom were employed at Rocket before joining the Company in 2021. The complaint alleges the individual defendants downloaded confidential Rocket company documents and other proprietary materials prior to leaving Rocket in 2021 and that the Company used this information to advance its programs. The complaint seeks unspecified damages and asks the court to enjoin the Company from competing and working in the market for gene therapy treatments targeting cardiac diseases. The Company retained legal counsel to assist with its ongoing review of the allegations in Rocket's complaint and is confident in its defenses to the allegations. In addition, in August 2024, the Company asserted counterclaims against Rocket and Spacecraft Seven LLC, a wholly owned subsidiary of Rocket, for misappropriation of trade secrets, correction of inventorship of certain patents, breach of contract, and tortious interference with contract. The case is currently in the discovery phase. While it is not possible to predict the outcome with certainty and an estimate of the possible loss cannot be made, the Company currently does not expect the final outcome will have a material adverse effect on its timelines for development of its product candidates.

Indemnification Agreements-In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its Board of Directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. For all periods presented, the Company has not incurred any material costs as a result of such indemnifications.

12. License, Acquisition, Research and Collaboration and Sponsored Research Agreements

Adverum Biotechnologies-On January 25, 2021, the Company entered into an exclusive license agreement with Adverum Biotechnologies Inc. ("Adverum") to in-license materials and technology related to the treatment of cardiomyopathy due to Friedreich ataxia ("FA") (the "Adverum Agreement"). In connection with the Adverum Agreement, the Company gained access to a portfolio of inventions, patent rights, technology, and licensed methods that the Company continues to develop, and the Company will assume all development and commercialization activities worldwide. Pursuant to the Adverum Agreement, the Company paid a one-time up-front non-refundable fee of $7.5million, and is obligated to pay aggregate development and regulatory milestones of up to $17.5million including a $3.5million development milestone that was achieved and paid in the first quarter of 2023, and aggregate sales event and commercialization milestones of up to $49.0million. The Company is obligated to pay Adverum tiered royalties ranging from high single-digits to sub teens based on annual aggregate worldwide net sales of Products (as defined in the Adverum Agreement).As of September 30, 2024, there were noresearch and development expenses recorded by the Company or payments made to Adverum under the terms of the Adverum Agreement other than the one-time up-front non-refundable fee of $7.5million and the $3.5million development milestone that was achieved and paid in the first quarter of 2023.

The Adverum Agreement remains in effect until termination at the date of the last royalty term to expire. The Company can terminate the Adverum Agreement with 120days' written notice. The Adverum Agreement can also be terminated as a result of a patent challenge, material breach of contractual terms, or insolvency by either party.

Cornell University-On May 27, 2020, the Company entered into twoexclusive license agreements with Cornell University ("Cornell") (the "First Cornell License Agreement" and the "Second Cornell License Agreement," collectively the "May 2020 Cornell License Agreements"). The First Cornell License Agreement is for the in-license of technology related to portfolios for APOE-associated Alzheimer's disease and Anti-Tau, although the Company's license is not restricted by such indications and it includes assignment to the Company of Cornell's IND for the use of AAVrh10.hAPOE2 vector to treat APOE4 homozygous patients who are at risk for or have Alzheimer's disease to support development of the Company's LX1001 program. The Second Cornell License Agreement is for the in-license of technology related to a portfolio for FA although the Company's license is not restricted by such indications, and it includes assignment to the Company of Cornell's IND for the use of AAVrh.10cUhCLN2 to treat children with CLN2 Batten disease to support development of the Company's LX1004 program. Through the May 2020 Cornell License Agreements, the Company gains access to a portfolio of inventions, patent rights, technology, and licensed methods that the Company continues to develop. Under the terms of the May 2020 Cornell License Agreements, the Company has assumed all development and commercialization activities worldwide with respect to the licensed technology.

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As initial consideration for the May 2020 Cornell License Agreements, the Company paid Cornell an upfront payment in cash of $0.3million and issued $1.3million of notes ("Notes"). In November 2020, Notes with outstanding principal of $1.3million were cancelled in exchange for 1,337,610shares of series A convertible preferred stock, which converted into 126,258shares of common stock upon the closing of the Company's IPO on November 7, 2023. As additional consideration, the Company is required to pay Cornell up to $8.4million upon the achievement of specific clinical and regulatory milestones under the First Cornell License Agreement and up to $4.3million in two portfolios and up to $0.6million for a third portfolio upon the achievement of specific clinical and regulatory milestones under the Second Cornell License Agreement. In the second quarter of 2022, a clinical and regulatory milestone of $0.1million was recognized and paid to Cornell in connection with the Second Cornell License Agreement. The Company is also required to pay Cornell a flat royalty in the mid-single-digits based on net sales of the products covered by the licenses, subject to certain adjustments.

Upon expiration of the royalty term of a given licensed product in a country, the respective license becomes non-exclusive and royalty-free. In addition, each of the May 2020 Cornell License Agreements may be terminated by the Company for any reason upon ninety (90) days' advance notice to Cornell and by Cornell upon the Company's material uncured breach, and all licenses and rights granted by either party under such agreement will concurrently terminate.

On April 21, 2024, the Company entered into the Third License Agreement (the "Third Cornell License Agreement," together with the May 2020 Cornell License Agreements, the "Cornell License Agreements") with Cornell. Pursuant to the Third Cornell License Agreement, Cornell has granted the Company an exclusive license to practice under certain patent rights generated in animal studies conducted by Cornell on behalf of the Company and a non-exclusive license to know-how concerning a gene therapy for FA cardiomyopathy and current and future data generated in an ongoing investigator-initiated Phase 1A trial of AAVrh.10hFXN to treat FA cardiomyopathy. Both licenses are worldwide and cover products with human and non-human prophylactic and therapeutic uses. Cornell has also granted the Company a right of reference to Cornell's Investigation New Drug application for a gene therapy for FA cardiomyopathy.

Under the Third Cornell License Agreement, the Company paid a license issue fee and an initial data transfer fee to Cornell totaling $0.6million. Additionally, the Company will be paying an annual data transfer fee of $50,000until data is no longer being gathered. The Company has agreed to pay annual license maintenance fees ranging from $2,500to $25,000until such time the Company commercializes a licensed product. In addition, the Company will pay Cornell up to an aggregate of $2.1million in regulatory milestones and up to an aggregate of $100million in commercial milestones, plus low single digit royalties on net sales.

The Third Cornell License Agreement contains other customary license terms including terms related to sublicensing, development, commercialization, milestones, royalties, intellectual property, and termination. Upon expiration of the applicable royalty term for a product in a given country, the Company shall retain a non-exclusive, royalty free license to the data and know-how, including to continue selling such product in that country.

Cornell may terminate the Third Cornell License Agreement if the Company (i) breaches the Third Cornell License Agreement (subject to a cure period), (ii) participates in any proceeding challenging the validity of the licensed patents, (iii) publishes the licensed data without Cornell's prior written consent, or (iv) does not reach certain milestones. Cornell may also terminate the Third Cornell License Agreement in part on product-by-product basis if the Company does not diligently develop and sale a product. The Company may terminate the Third Cornell License Agreement, in whole or in part with respect to the right of reference, or the licensed data, know-how, or patent rights, with 90days' prior written notice to Cornell.

During the three and nine months ended September 30, 2023, the Company incurred and paid $5,000and $10,000, respectively in connection with the Cornell License Agreements. During the three and nine months ended September 30, 2024, the Company incurred and paid $0and $0.7million, respectively in connection with the Cornell License Agreements.

Stelios Therapeutics, Inc.-Stelios Therapeutics, Inc. ("Stelios") was an early-stage company developing novel adeno-associated AAV-based gene therapies for rare cardiac conditions including arrhythmogenic cardiomyopathy and TNNI3-associated hypertrophic cardiomyopathy. On July 16, 2021, the Company acquired 100% of the outstanding stock of Stelios that was accounted for as an asset acquisition pursuant FASB ASC 805, Business Combinations. The Company is required to pay up to a remaining aggregate of $12.5million to the selling shareholders of Stelios upon the achievement of certain development milestones, excluding a $6.0million development milestone that was achieved in the third quarter of 2024 and paid in the fourth quarter of 2024. Dr. Eric Adler, the Company's Chief Medical Officer and Head of Research, was a co-founder of Stelios and a selling shareholder. Of the $6.0million development milestone payment, Dr. Adler received approximately $1.3million.

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Regents of the University of California, San Diego-Stelios entered into exclusive worldwide license agreements on April 23, 2020, and August 6, 2020 (the "First UCSD Agreement" and the "Second UCSD Agreement", respectively) with the Regents of UCSD to in-license materials and intellectual property related to gene therapies for arrhythmogenic right ventricular cardiomyopathy and hypertrophic cardiomyopathy, respectively. The First UCSD Agreement and the Second UCSD Agreement relate to the Company's development efforts for its LX2021 and LX2022 programs, respectively. In connection with the First UCSD Agreement and the Second UCSD Agreement, the Company gained access to inventions, patent rights, technology, and licensed methods that it continues to develop, and it has assumed all worldwide development and commercialization activities with respect to the licensed technologies. The First UCSD Agreement and Second UCSD Agreement required Stelios to pay one-time up-front non-refundable cash fees of $20,000for each agreement and requires the Company to pay aggregate development and commercialization milestones of up to $4.8million and $2.4million, respectively, and low- to mid-single digit royalties and low-single digit royalties, respectively, based on aggregate net sales. The only research and development expenses incurred by Stelios or the Company and payments made to the Regents of UCSD through September 30, 2024 under the terms of the First UCSD Agreement and the Second UCSD Agreement were the one-time up-front non-refundable cash fees of $20,000for each agreement. The Company has the right to terminate the First UCSD Agreement and the Second UCSD Agreement at any time upon sixty (60)-days' written notice to the Regents of UCSD.

On October 4, 2021, the Company entered into an exclusive worldwide license agreement (the "Third UCSD Agreement" and collectively with the First UCSD Agreement and the Second UCSD Agreement, the "UCSD Agreements") with the Regents of UCSD to in-license materials and intellectual property related to LX2020, a gene therapy for arrhythmogenic right ventricular cardiomyopathy. The Third UCSD Agreement relates to the Company's development efforts for its LX2020 program. In connection with the Third UCSD Agreement, the Company gained access to inventions, patent rights, technology, and licensed methods that it continues to develop, and it has assumed all worldwide development and commercialization activities with respect to the licensed technology. The Third UCSD Agreement required the Company to pay a one-time up-front non-refundable cash fee of $20,000and requires the Company to pay aggregate development and commercialization milestones of up to $4.0million, and low- to mid-single digit royalties based on aggregate net sales.Research and development expenses incurred by the Company and payments made to the Regents of UCSD under the terms of the Third UCSD Agreement were the one-time up-front non-refundable cash fee of $20,000as well as a $0.1million development milestone that was achieved during the third quarter of 2024. The Company has the right to terminate the Third UCSD Agreement at any time upon sixty (60)-days' written notice to the Regents of UCSD.

On December 3, 2021, the Company entered into twosponsored research agreements with the Regents of UCSD (the "First UCSD SRA", the "Second UCSD SRA", and collectively, the "UCSD SRAs") for the Company's LX2020, LX2021 and LX2022 programs in connection with the UCSD Agreements. Under the terms of the UCSD SRAs, the Company has the first rights to obtain non-exclusive or exclusive, sublicensable, royalty-bearing, perpetual and transferable worldwide licenses in any resulting inventions owned by the Regents of UCSD or resulting inventions jointly owned between the Company and the Regents of UCSD, and the Company retains the rights to any resulting inventions owned by the Company. The UCSD SRAs each have a two-yearterm and may be terminated early by the Company at any time upon the giving of thirty (30) days' written notice to the Regents of UCSD. The total costs to be invoiced to the Company over the terms of the UCSD SRAs are $5.6million, of which the Company incurred $0.2million and $1.3million of research and development expenses during the three and nine months ended September 30, 2023, respectively. The Company paid $0and $0.2million to the Regents of UCSD in connection with the UCSD SRAs during the three and nine months ended September 30, 2023, respectively. The Company did not incur any research and development expenses in connection with the UCSD SRAs during the three and nine months ended September 30, 2024. The Company paid $0and $0.7million to the Regents of UCSD in connection with the UCSD SRAs during the three and nine months ended September 30, 2024, respectively. The Company has paid a cumulative total of $4.0million to the Regents of UCSD as of September 30, 2024, in connection with the UCSD SRAs.

On April 13, 2024, the Company entered into a third sponsored research agreement with the Regents of UCSD (the "Third UCSD SRA") for the Company's LX2022 program in connection with the Second UCSD Agreement. Under the terms of the Third UCSD SRA, the Company has the first rights to obtain non-exclusive or exclusive, sublicensable, royalty-bearing, perpetual and transferable worldwide licenses in any resulting inventions owned by the Regents of UCSD or resulting inventions jointly owned between the Company and the Regents of UCSD, and the Company retains the rights to any resulting inventions owned by the Company. The Third UCSD SRA has a two-yearterm and may be terminated early by the Company at any time upon the giving of thirty (30) days' written notice to the Regents of UCSD. The costs to be invoiced to the Company over the term of the Third UCSD SRA are $0.7million, and the Company may incur additional costs of $0.6million under the Third UCSD SRA if certain study objectives are met. The Company also entered into an amendment to the Second UCSD SRA for the Company's LX2022 program that extended the term of the Second UCSD SRA to December 2024. The Company incurred $0.1million and $0.5million of research and development costs during the three and nine months ended September 30, 2024, respectively, and paid $0.3million and $0.6million during the three and nine months ended September 30, 2024, respectively, to the Regents of UCSD in connection with the Third UCSD SRA.

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On April 19, 2024, the Company entered into an amendment to the First UCSD SRA (as amended, the "Amended First UCSD SRA") for the Company's LX2021 program in connection with the First UCSD Agreement. The Amended First UCSD SRA extends the term of the First UCSD SRA to December 2026 and provides for additional research and development studies and expenses. The total costs to be invoiced to the Company under the Amended First UCSD SRA are $0.8million. The Company incurred $0.1million and $0.5million of research and development costs during the three and nine months ended September 30, 2024, respectively, and paid $0.3million during each of the three and nine months ended September 30, 2024 to the Regents of UCSD in connection with the Amended First UCSD SRA.

Weill Cornell Medical College-On February 2, 2021, the Company entered into a Research Collaboration Agreement with Weill Cornell Medical College ("WCM" and the "WCM Agreement") in connection with the Cornell License Agreements entered on May 27, 2020. The Company committed to fund scientific research at WCM to investigate further and potentially enhance the technology licensed to the Company pursuant to the License Agreements.

Under the terms of the WCM Agreement, each WCM invention, joint invention, and related joint results for which an Improvement, as defined in the WCM Agreement, applies and the Company has made an election to amend the Cornell License Agreements, the Company has the first option to negotiate in good faith with WCM for royalty- bearing, worldwide license, under Cornell patent rights, Cornell rights, and Cornell's interest in joint patent rights, to develop, make, have made, use, offer for sale, sell, have sold, and import derived products in the field. During the three and nine months ended September 30, 2023 the Company incurred $0.1million and $1.0million, respectively, of research and development costs and paid $0and $1.8million, respectively, to Cornell in connection with the WCM Agreement. During each of the three and nine months ended September 30, 2024 the Company incurred and paid $0.3million of research and development costs to Cornell in connection with the WCM Agreement.

The WCM Agreement expired in accordance with its terms in February 2024.

13. Subsequent Events

Subsequent events have been evaluated through November 13, 2024, which is the date that these unaudited condensed financial statements were issued and were available to be issued.

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