Neurogene Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto included elsewhere in this report and our audited consolidated financial statements and notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 24, 2026 (“Annual Report”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks, uncertainties, and assumptions. As a result of many factors, including those factors set forth in the section entitled “Risk Factors,” our actual results or outcomes, or the timing of our results or outcomes, could differ materially from the results or outcomes described in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled “Risk Factors.” You should carefully read the “Cautionary Note About Forward-Looking Statements” and “Risk Factors” sections of the Annual Report on Form 10-K as well as the risk factors included in Part II, Item 1A of this Quarterly Report on Form 10-Q to gain an understanding of the important factors that could cause actual results to differ materially from the results described below.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto included elsewhere in this report and our audited consolidated financial statements and notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 24, 2026 (“Annual Report on Form 10-K”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks, uncertainties, and assumptions. As a result of many factors, including those factors set forth in the section entitled “Risk Factors,” our actual results or outcomes, or the timing of our results or outcomes, could differ materially from the results or outcomes described in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled “Risk Factors.” You should carefully read the “Cautionary Note About Forward-Looking Statements” and “Risk Factors” sections of the Annual Report on Form 10-K as well as the risk factors included in Part II, Item 1A of this Quarterly Report on Form 10-Q to gain an understanding of the important factors that could cause actual results to differ materially from the results described below.

Previous wording

Our first clinical-stage program, NGN-401, is in development for the treatment of Rett syndrome, a severe and progressive neurodevelopmental disease with substantial neurological and physical impairments and significant unmet need. NGN-401 is purposefully designed to utilize the EXACT platform and adeno-associated virus (“AAV”) delivery viaintracerebroventricular (“ICV”) administration, and to deliver the full-length MECP2 gene which preserves the complete set of endogenous regulatory elements to restore functional MeCP2 protein. Our ongoing registrational trial of NGN-401, Embolden TM, is a single-arm, open-label, baseline-controlled trial evaluating the 1E15 vg dose of NGN-401 in females with Rett syndrome. The Embolden trial is designed to evaluate NGN-401 in females ages three and above with potential to support a broad label in a single study and enable an efficient path to market. Approximately 90% of participants have been dosed in Embolden, and we are on track to complete dosing in the second quarter of 2026. We completed dosing in a Phase 1/2 open-label, multi-center clinical trial of NGN-401 gene therapy for Rett syndrome, with ten participants receiving the 1E15 vg dose. NGN-401 is delivered using a one-time ICV procedure, which we believe is the most suitable route of administration to achieve optimal biodistribution in key regions of the brain and other parts of the nervous system that underlie Rett syndrome pathophysiology. Clinical grade NGN-401 manufactured at our fully operational current good manufacturing practices (“cGMP”) facility in Houston, Texas was used for dosing in the Phase 1/2 clinical trial and is being used for the Embolden trial. We believe that our in-house manufacturing capabilities better enable control of product quality and development timelines, strategic pipeline and financial flexibility, and clinical-to-commercial continuity.

Current wording

Our lead clinical-stage program, NGN-401, is in development for the treatment of Rett syndrome, a severe and progressive neurodevelopmental disease with substantial neurological and physical impairments and significant unmet need. NGN-401 is purposefully designed to utilize the EXACT platform and adeno-associated virus (“AAV”) delivery viaintracerebroventricular (“ICV”) administration, and to deliver the full-length MECP2 gene which preserves the complete set of endogenous regulatory elements to restore functional MeCP2 protein. We believe ICV delivery is the most suitable route of administration to achieve optimal biodistribution in key regions of the brain and other parts of the nervous system that underlie Rett syndrome pathophysiology. We have completed dosing of 25 participants in our ongoing registrational trial of NGN-401, Embolden TM, a single-arm, open-label, baseline-controlled trial evaluating the 1E15 vg dose of NGN-401 gene therapy in females with Rett syndrome. The Embolden trial is designed to evaluate NGN-401 in females ages three and above with potential to support a broad label in a single study and enable an efficient path to market. Top-line results are expected in the second half of 2027.

Previous wording

We received clearance of our Investigational New Drug (“IND”) application by the U.S. Food and Drug Administration (“FDA”) in January 2023. We completed enrollment in the Phase 1/2 open-label, multi-center clinical trial evaluating NGN-401 for the treatment of female patients with classic Rett syndrome in the second quarter of 2025. The trial is assessing the safety, tolerability, and efficacy of NGN-401 at a dose of 1E15 vg in eight participants in an ages 4-10 years cohort and two participants in an ages 11 years and older cohort.

Current wording

We completed dosing in the Phase 1/2 open-label, multi-center clinical trial evaluating NGN-401 for the treatment of female patients with classic Rett syndrome in the second quarter of 2025. The trial is assessing the safety, tolerability, and efficacy of NGN-401 at a dose of 1E15 vg in eight participants in an ages 4-10 years cohort and two participants in an ages 11 years and older cohort.

Previous wording

We also reported safety and tolerability data from the ten participants in the Phase 1/2 clinical trial who received the 1E15 vg dose of NGN-401 as of the data cutoff date of October 30, 2025. We believe that NGN-401 has been generally well-tolerated at the 1E15 vg dose, with no cases of hemophagocytic lymphohistiocytosis (“HLH”) in any participant at this dose. All treatment-related adverse events (“AEs”) have been Grade 1 (mild) or Grade 2 (moderate) in severity, and the majority are known potential risks of AAV and have resolved or are resolving. Participant 5 experienced two Grade 2 serious adverse events (“SAEs”) related to an abnormal nerve conduction finding - areflexia and related elective inpatient diagnostic testing. The nerve conduction finding has returned to the normal range. Unrelated to NGN-401, Participant 5 also experienced a leg fracture confounding her Month 12 gross motor assessment.

Current wording

In the Phase 1/2 trial, all treatment-related adverse events have been mild (Grade 1) or moderate (Grade 2) in severity, and the majority are known potential risks of AAV and have resolved or are resolving, as of the data cutoff date of June 16, 2026.

Previous wording

Based on research we conducted in 2025 related to hyperinflammatory syndromes and AAV gene therapy, HLH has only been reported following doses of AAV that are generally in the 1E14 vg/kg range or higher. The 1E15 vg dose used in the Phase 1/2 trial and in the Embolden registrational trial translates into the E13 vg/kg range, and we are not aware of any case of HLH ever being reported at this dose. Out of an abundance of caution, we incorporated enhanced monitoring into our Phase 1/2 and Embolden protocols for HLH markers, including ferritin, and a treatment algorithm that when administered early, has been used successfully to treat cases of HLH both in other AAV gene therapies and other known causes of HLH.

Current wording

Based on research we conducted in 2025 related to hyperinflammatory syndromes and AAV gene therapy, HLH has only been reported following doses of AAV that are generally in the 1E14 vg/kg range or higher. The 1E15 vg dose used in the Phase 1/2 trial and in the Embolden registrational trial translates into the E13 vg/kg range, and we are not aware of any case of HLH ever being reported at this dose. HLH is an acute inflammatory reaction that, if it were to occur, would be expected to happen within days after dosing. Out of an abundance of caution, we incorporated enhanced monitoring into our Phase 1/2 and Embolden protocols for HLH markers, including ferritin, and a treatment algorithm that, when administered early, has been used successfully to treat cases of HLH both in other AAV gene therapies and other known causes of HLH.

Previous wording

The primary endpoint is a responder-based composite endpoint that will assess an improvement in the Clinical Global Impression–Improvement Scale (“CGI-I”) with Rett syndrome anchors and the gain of a developmental milestone, compared to the participant’s own baseline. Responders are defined as participants who attain a CGI-I score less than or equal to three (“minimally improved”) and gain any one developmental milestone from a list of 28, as captured through standardized video recordings and independently verified by blinded central raters at the 12-month endpoint. A response rate of 35% is the minimum threshold for success to reject the null hypothesis in the Embolden trial.

Current wording

In June 2025, we first announced written agreement from the FDA on key elements of the NGN-401 Embolden registrational trial design, and we confirmed these elements and the trial design in September 2025. The primary endpoint is a responder-based composite endpoint that will assess an improvement in CGI-I with Rett syndrome anchors and the gain of a developmental milestone, compared to the participant’s own baseline. Responders are defined as participants who attain a CGI-I score less than or equal to three (“minimally improved”) and gain any one developmental milestone from a list of 28, as captured through standardized video recordings and independently verified by blinded central raters at the 12-month endpoint. The primary analysis to support the planned BLA is expected to occur after the first 24 participants have completed 12 months of follow-up. A response rate of 33% is the minimum threshold for success to reject the null hypothesis in the Embolden trial. We expect to report top-line data in the second half of 2027, and therefore we do not plan to share data updates from the trial before that time.

Previous wording

We previously reached alignment with the FDA on our potency assay strategy and chemistry, manufacturing and control (“CMC”) planning for the program. We plan to initiate our Process Performance Qualification (“PPQ”) campaign in mid-2026 and confirmed our commercial manufacturing scale is the same as our current clinical manufacturing scale, removing the need for comparability studies.

Current wording

We previously reached alignment with the FDA on our potency assay strategy and chemistry, manufacturing and controls (“CMC”) planning for the program. We initiated our Process Performance Qualification (“PPQ”) campaign in July 2026 and confirmed our commercial manufacturing scale is the same as our current clinical manufacturing scale, removing the need for comparability studies. We expect to complete the PPQ runs by the end of 2026.

Previous wording

Since our inception, we have funded our operations primarily with outside capital (e.g., proceeds from the sale of preferred stock, common stock and pre-funded warrants) and have raised aggregate net proceeds of approximately$552.1 million. However, we have incurred significant recurring losses, including a net loss of$30.9 million and$22.6 million for thethree months ended March 31, 2026 and 2025, respectively. In addition, as of March 31, 2026, we had an accumulated deficit of$383.6 million and cash, cash equivalents and short-term investments totaling$243.2 million. In order to continue our operations, we must achieve profitable operations and/or obtain additional equity or debt financing. Until we achieve profitability, management plans to fund our operations and capital expenditures with cash on hand and the sale and issuance of securities. There can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. If we are unable to raise sufficient additional capital, we may be compelled to consider actions such as reducing the scope of our operations and planned capital expenditures or selling certain assets, including intellectual property assets.

Current wording

Since our inception, we have funded our operations primarily with outside capital (e.g., proceeds from the sale of preferred stock, common stock and pre-funded warrants) and have raised aggregate net proceeds of approximately$692.8 million, including net proceeds of approximately $134.8 million from the July 2, 2026 public offering. See “Liquidity and Capital Resources” for additional information. However, we have incurred significant recurring losses, including a net loss of$65.4 million and$44.7 million for thesix months ended June 30, 2026 and 2025, respectively. In addition, as of June 30, 2026, we had an accumulated deficit of$418.1 million and cash, cash equivalents and short-term investments totaling$225.4 million. Following the completion of our July 2, 2026 public offering, we believe our existing cash, cash equivalents and investments will be sufficient to fund our operations into the first quarter of 2029. We may seek additional capital in the future to advance our pipeline, support our operations or pursue strategic opportunities. There can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. If we are unable to raise sufficient additional capital, we may be compelled to consider actions such as reducing the scope of our operations and planned capital expenditures or selling certain assets, including intellectual property assets.

Previous wording

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to increase significantly over the next several years as we increase personnel costs, including stock-based compensation, conduct clinical trials, including later-stage clinical trials for current and future product candidates, and prepare regulatory filings for our product candidates.

Current wording

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to remain significant over the next several years as we continue patient monitoring activities for our ongoing registrational trial, conduct clinical trials for future product candidates, complete process performance qualification (PPQ) activities, and prepare regulatory filings for our product candidates.

Previous wording

Comparison of the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Expenses related to the Rett syndrome program increased primarily due to a $5.1 million increase in clinical trial costs related to the Phase 1/2 and pivotal clinical trial of NGN-401, a $2.4 million increase in chemistry, manufacturing and controls (“CMC”) costs primarily related to CDMO support for NGN-401 and a $1.0 million decrease in preclinical costs. The decrease in expenses related to the Batten disease program was primarily driven by a $0.6 million decrease in clinical trial costs for the Phase 1/2 clinical trial of NGN-101, due to the de-prioritization of the program. The decrease in expenses related to the Early Discovery program was driven by a $0.6 million decrease in preclinical costs primarily due to lower costs of preclinical development for the Early Discovery program.

Current wording

Expenses related to the Rett syndrome program increased primarily due to an $8.0 million increase in clinical trial costs related to the ongoing registrational clinical trial for NGN-401 and a $3.1 million increase in CMC costs primarily related to CDMO support and PPQ manufacturing runs for NGN-401, partially offset by a $1.6 million decrease in preclinical costs. The decrease in expenses related to the Batten disease program was primarily driven by a $1.0 million decrease in clinical trial costs for the Phase 1/2 clinical trial of NGN-101, due to the de-prioritization of the program. The decrease in expenses related to the Early Discovery programs was driven by a $0.7 million decrease in preclinical development costs.

Previous wording

General and administrative expenses were $8.2 million for thethree months ended March 31, 2026, as compared to$8.2 million for thethree months ended March 31, 2025. General and administrative expenses were comparable to prior year, with increases primarily attributable to: (i) a $0.4 million increase in other expenses, primarily related to higher corporate costs and pre-commercial activities, (ii) a $0.1 million increase in personnel-related expenses, reflecting higher headcount to support business operations, and (iii) a $0.1 million increase in professional and consultant fees, primarily due to higher patent and IT services costs. These increases were partially offset by a $0.6 million decrease in stock-based compensation expense.

Current wording

General and administrative expenses were $11.2 million for thethree months ended June 30, 2026, as compared to$6.7 million for thethree months ended June 30, 2025. The increase was primarily attributable to: (i) a$3.3 million increase in stock-based compensation expense, driven by an increase in headcount as well as by an increase of approximately $2.7 million related to PSU expense as the second underlying performance condition was deemed probable of achievement and currently considered probable to vest, (ii) a$0.6 million increase in personnel-related expenses, reflecting higher headcount to support business operations, (iii) a$0.4 million increase in other expenses, primarily related to higher corporate costs and pre-commercial activities, and (iv) a$0.3 million increase in professional and consultant fees. The increase was partially offset by a$0.1 million decrease in office-related expense.

Previous wording

The change in other expenses was not material for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Current wording

The change in other expenses was not material for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025 respectively.

Previous wording

As of March 31, 2026, we had cash, cash equivalents and short-term investments totaling$243.2 million. Since inception and through the issuance of these financial statements, we have funded our operations primarily through the sales of convertible preferred stock and common stock for net proceeds of approximately$552.1 million, including net proceeds from sale of common stock pursuant to our ATM Sales Agreement.

Current wording

As of June 30, 2026, we had cash, cash equivalents and short-term investments totaling$225.4 million. Since inception, we have funded our operations primarily with outside capital (e.g., proceeds from the sale of preferred stock, common stock and pre-funded warrants) and have raised aggregate net proceeds of approximately$692.8 million, including net proceeds of approximately $134.8 million from the July 2, 2026, public offering described below.

Previous wording

For the three months ended March 31, 2026, we used $26.1 million of cash in operating activities. Cash used in operating activities reflected our net loss of $30.9 million, a $1.2 million decrease in our net operating assets and non-cash charges of $3.6 million, which consisted primarily of $3.6 million of stock-based compensation, $0.8 million in depreciation and impairment expense and $0.2 million in non-cash operating lease expense partially offset by $0.4 million in accretion on the held-to-maturity investments and $0.7 million change in the contingent value rights liability. The primary use of cash was to fund our operations related to the development of our product candidates.

Current wording

For the six months ended June 30, 2026, we used $49.9 million of cash in operating activities. Cash used in operating activities reflected our net loss of $65.4 million, a $3.4 million decrease in our net operating assets and non-cash charges of $12.2 million, which consisted primarily of $11.5 million of stock-based compensation, $1.7 million in depreciation and impairment expense and $0.4 million in non-cash operating lease expense partially offset by $0.7 million in accretion on the held-to-maturity investments and $0.7 million change in the contingent value rights liability. The primary use of cash was to fund our operations related to the development of our product candidates.

Previous wording

For the three months ended March 31, 2025, we used $20.8 million of cash in operating activities. Cash used in operating activities reflected our net loss of $22.6 million, a $1.4 million net increase in our operating assets and liabilities, and non-cash charges of $3.3 million, which consisted primarily of $4.0 million in stock-based compensation, $0.7 million in depreciation and $0.2 million in non-cash operating lease expense, partially offset by $1.7 million in accretion on the held-to-maturity investments. The primary use of cash was to fund our operations related to the development of our product candidates.

Current wording

For the six months ended June 30, 2025, we used $40.2 million of cash in operating activities. Cash used in operating activities reflected our net loss of $44.7 million, a $1.8 million net increase in our operating assets and liabilities, and non-cash charges of $6.2 million, which consisted primarily of $7.5 million in stock-based compensation, $1.5 million in depreciation and $0.4 million in non-cash operating lease expense, partially offset by $3.2 million in accretion on the held-to-maturity investments. The primary use of cash was to fund our operations related to the development of our product candidates.

Previous wording

For thethree months ended March 31, 2026, net cash flows provided by investing activities consisted of proceeds from maturities of short-term investments of $130.0 million, partially offset by purchases of short-term investments of $83.5 million and purchases of property and equipment of $0.3 million.

Current wording

For thesix months ended June 30, 2026, net cash flows provided by investing activities consisted of proceeds from maturities of short-term investments of $249.1 million, partially offset by purchases of short-term investments of $196.2 million and purchases of property and equipment of $0.6 million.

Previous wording

For thethree months ended March 31, 2025, net cash flows used in investing activities consisted of purchases of short-term investments of $89.0 million and purchases of property and equipment of $0.8 million, partially offset by proceeds from maturities of short-term investments of $44.7 million.

Current wording

For thesix months ended June 30, 2025, net cash flows used in investing activities consisted of purchases of short-term investments of $149.4 million and purchases of property and equipment of $0.9 million, partially offset by proceeds from maturities of short-term investments of $112.7 million.

Previous wording

For the three months ended March 31, 2026, net cash flows provided by financing activities primarily consisted of proceeds of $0.2 million from the exercise of stock options.

Current wording

For the six months ended June 30, 2026, net cash flows provided by financing activities primarily consisted of $5.9 million in net proceeds from open market sales of common stock pursuant to the at-the-market (ATM) sales agreement with Leerink Partners, LLC, $0.2 million from the exercise of stock options and $0.1 million from the proceeds from issuance of common stock under the 2023 Employee Stock Purchase Plan. As of June 30, 2026, the remaining amount authorized for sale under the ATM sales agreement was $112.9 million.

Previous wording

For the three months ended March 31, 2025, net cash flows provided by financing activities were insignificant.

Current wording

For the six months ended June 30, 2025, net cash flows provided by financing activities were insignificant.

Previous wording

In December 2020, we entered into a Master Collaboration Agreement (the “MCA”) with the University of Edinburgh (the “University of Edinburgh”). Under the MCA, we and the University of Edinburgh agreed to collaborate on certain research and development projects (“Projects”), and we agreed to provide funding for such Projects for a 40-month initial term, which was extended in November 2023 for an additional 33 months and may befurther extended by mutual agreement. Under the MCA, we are obligated to pay semi-annual installment payments relating to funding of costs for personnel and lab consumables for the duration of the MCA. Either party may terminate the MCA for convenience upon 90 days’ notice. If we were to terminate the MCA, we would be responsible for all non-cancellable costs and commitments related to any particular Project and any and all funding costs for any person working on such Project.

Current wording

In December 2020, we entered into a Master Collaboration Agreement (the “MCA”) with the University Court of the University of Edinburgh (the “University of Edinburgh”). Under the MCA, we and the University of Edinburgh agreed to collaborate on certain research and development projects (“Projects”), and we agreed to provide funding for such Projects for a 40-month initial term, which was extended in November 2023 for an additional 33 months and may befurther extended by mutual agreement. Under the MCA, we are obligated to pay semi-annual installment payments relating to funding of costs for personnel and lab consumables for the duration of the MCA. Either party may terminate the MCA for convenience upon 90 days’ notice. If we were to terminate the MCA, we would be responsible for all non-cancellable costs and commitments related to any particular Project and any and all funding costs for any person working on such Project.

Previous wording

In January 2023, we entered into a Non-Exclusive License Agreement with Sigma-Aldrich Co. LLC, pursuant to which we have a license to certain patents and know-how on a non-exclusive basis related to certain cell lines used in our baculovirus process in exchange for a small annual fee on a product-by-product basis, payable once the first product candidate enters the clinic. In addition, on a product-by-product basis, we are obligated to pay up to $2.5 million in the aggregate for development-related milestones. This agreement remains in force for as long as we continue to possess and use the licensed technology. We may terminate this agreement for convenience upon 60 days’ notice.

Current wording

In January 2023, we entered into a Non-Exclusive License Agreement with Sigma-Aldrich Co. LLC, pursuant to which we have a license to certain patents and know-how on a non-exclusive basis related to certain cell lines used in our baculovirus process in exchange for a small annual fee on a product-by-product basis, payable once the first product candidate entered the clinic. In addition, on a product-by-product basis, we are obligated to pay up to $2.5 million in the aggregate for development-related milestones. This agreement remains in force for as long as we continue to possess and use the licensed technology. We may terminate this agreement for convenience upon 60 days’ notice.

Previous wording

Our financial statements are prepared in accordance with U.S. GAAP. The preparation of the financial statements and related disclosures requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management evaluates estimates and assumptions on a periodic basis. Our actual results may differ from these estimates. A summary of our significant accounting policies is presented in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our significant accounting policies during thethree months ended March 31, 2026.

Current wording

Our financial statements are prepared in accordance with U.S. GAAP. The preparation of the financial statements and related disclosures requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management evaluates estimates and assumptions on a periodic basis. Our actual results may differ from these estimates. A summary of our significant accounting policies is presented in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our significant accounting policies during thesix months ended June 30, 2026.