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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________ to _____________________

Commission File Number: 001-39397

INOZYME PHARMA, INC.

(Exact name of registrant as specified in its charter)


Delaware	38-4024528
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
321 Summer Street, Suite 400 Boston, Massachusetts	02210
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (857) 330-4340

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common stock, par value $0.0001 per share

     INZY

     Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 7, 2025, the registrant had 64,561,824 shares of common stock, $0.0001 par value per share, outstanding.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements, which reflect our current views with respect to, among other things, our operations and financial performance. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” and the negative version of these words and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described in the “Risk Factors” section in our most recent Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q and include, among other things:

•

our ongoing Phase 1/2 clinical trials of INZ-701 for adults with ENPP1 and ABCC6 Deficiencies, our ongoing open label long-term safety study of INZ-701 in patients with ENPP1 or ABCC6 Deficiencies who have received INZ-701 in an existing study ("ADAPT"), our ongoing Phase 1b clinical trial of INZ-701 for infants with ENPP1 Deficiency ("ENERGY 1"), our ongoing pivotal trial of INZ-701 in pediatric patients with ENPP1 Deficiency ("ENERGY 3"), our ongoing Phase 1 clinical trial of INZ-701 in patients with end-stage kidney disease receiving hemodialysis ("SEAPORT 1"), and our ongoing pivotal clinical trial of INZ-701 in infants (“ENERGY 2”), including statements regarding the timing of enrollment and completion of the clinical trials and the period during which the results of the clinical trials will become available;

•

the timing, design, and conduct of our planned clinical trials of INZ-701 for patients with ENPP1 Deficiency;

•

our plans to conduct research, preclinical testing and clinical trials of INZ-701 for additional indications;

•

our plans to conduct research, preclinical testing and clinical trials of other product candidates;

•

our plans to engage in regulatory interactions with the U.S. Food and Drug Administration, the European Medicines Agency and other regulatory authorities;

•

our plans with respect to regulatory filings;

•

the timing of, and our ability to obtain and maintain, marketing approvals of INZ-701, and the ability of INZ-701 and our other product candidates to meet existing or future regulatory standards;

•

our expectations regarding our ability to fund our cash flow requirements with our cash, cash equivalents and short-term investments;

•

the potential advantages of our product candidates;

•

the rate and degree of market acceptance and clinical utility of our product candidates;

•

our estimates regarding the potential market opportunity for our product candidates;

•

our commercialization and manufacturing capabilities and strategy;

•

our intellectual property position;

•

our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;

•

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•

the impact of changes in and uncertainty surrounding U.S. trade policy;

•

our ability to comply with the covenants under our loan agreement;

•

the impact of government laws and regulations;

•

our competitive position; and

•

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart our Business Startups Act of 2012.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in our most recent Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
PART II.	OTHER INFORMATION	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 5.	Other Information	33
Item 6.	Exhibits	35
Signatures		36

iii

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

INOZYME PHARMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share and per share data)


	March 31, 2025			December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	25,846		$	21,081
Short-term investments		58,930			92,006
Prepaid expenses and other current assets		8,550			7,278
Restricted cash		311			311
Total current assets		93,637			120,676
Property and equipment, net		608			784
Right-of-use assets		410			562
Prepaid expenses, net of current portion		509			1,160
Total assets	$	95,164		$	123,182
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	3,670		$	2,530
Accrued expenses		12,742			15,953
Operating lease liabilities		669			913
Current portion of long-term debt		25,700			14,502
Total current liabilities		42,781			33,898
Long-term debt, net		20,585			31,458
Total liabilities		63,366			65,356
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred Stock, $0.0001 par value – 5,000,000 shares authorized at March 31, 2025 and December 31, 2024; no shares issued and outstanding at March 31, 2025 or December 31, 2024		—			—
Common Stock, $0.0001 par value – 200,000,000 shares authorized at March 31, 2025 and December 31, 2024; 64,470,243 shares issued and outstanding at March 31, 2025 and 64,240,198 shares issued and outstanding at December 31, 2024		6			6
Additional paid in-capital		447,790			445,705
Accumulated other comprehensive (loss) income		(5	)		69
Accumulated deficit		(415,993	)		(387,954	)
Total stockholders’ equity		31,798			57,826
Total liabilities and stockholders’ equity	$	95,164		$	123,182

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

INOZYME PHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(amounts in thousands, except share and per share data)


	Three Months Ended March 31,
	2025			2024
Operating expenses:
Research and development	$	20,379		$	19,111
General and administrative		5,409			5,234
Restructuring charges		1,900			—
Total operating expenses		27,688			24,345
Loss from operations		(27,688	)		(24,345	)
Other income (expense):
Interest income		1,117			2,374
Interest expense		(1,406	)		(1,325	)
Other expense, net		(62	)		(51	)
Other (expense) income, net		(351	)		998
Net loss	$	(28,039	)	$	(23,347	)
Other comprehensive income (loss):
Unrealized losses on available-for-sale securities		(76	)		(156	)
Foreign currency translation adjustment		2			10
Total other comprehensive loss		(74	)		(146	)
Comprehensive loss	$	(28,113	)	$	(23,493	)
Net loss attributable to common stockholders—basic and diluted	$	(28,039	)	$	(23,347	)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.44	)	$	(0.38	)
Weighted-average common shares outstanding—basic and diluted		64,278,527			61,772,279

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

INOZYME PHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(amounts in thousands, except share data)

(Unaudited)


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’ Equity (Deficit)
	Shares		Amount		Capital		(Loss) Income			Deficit
Balance at December 31, 2024		64,240,198	$	6	$	445,705	$	69		$	(387,954	)	$	57,826
Stock-based compensation						1,857								1,857
Shares issued in at-the-market offering		230,045		—		228		—			—			228
Comprehensive loss:														—
Unrealized loss on investments		—		—		—		(76	)		—			(76	)
Foreign currency translation adjustment		—		—		—		2			—			2
Net loss		—		—		—		—			(28,039	)		(28,039	)
Balance at March 31, 2025		64,470,243	$	6	$	447,790	$	(5	)	$	(415,993	)	$	31,798

Balance at December 31, 2023		61,768,771	$	6	$	426,362	$	41		$	(285,930	)	$	140,479
Stock-based compensation		—		—		1,691		—			—			1,691
Exercise of pre-funded warrants		3,206		—		11		—			—			11
Shares purchased in Employee Stock Purchase Plan		44,532		—		148		—			—			148
Comprehensive loss:
Unrealized gain on investments		—		—		—		(156	)		—			(156	)
Foreign currency translation adjustment		—		—		—		10			—			10
Net loss		—		—		—		—			(23,347	)		(23,347	)
Balance at March 31, 2024		61,816,509	$	6	$	428,212	$	(105	)	$	(309,277	)	$	118,836

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

INOZYME PHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(Unaudited)


	Three Months Ended March 31,
	2025			2024
Operating activities
Net loss	$	(28,039	)	$	(23,347	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		176			182
Stock-based compensation expense		1,857			1,691
Amortization of premiums and discounts on marketable securities		(685	)		(2,116	)
Reduction in the carrying value of right-of-use assets		152			134
Non-cash interest expense and amortization of debt issuance costs		325			263
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(1,272	)		(510	)
Accounts payable		1,140			1,000
Accrued expenses		(3,211	)		(3,304	)
Operating lease liabilities		(244	)		(220	)
Prepaid expenses, net of current portion		652			1,694
Net cash used in operating activities		(29,149	)		(24,533	)
Investing activities
Purchases of marketable securities		(17,934	)		(49,324	)
Sales and maturities of marketable securities		51,618			59,750
Purchases of property and equipment		—			(32	)
Net cash provided by investing activities		33,684			10,394
Financing activities
Proceeds from issuance of common stock		228			—
Proceeds from exercise of stock options		—			11
Proceeds from issuance of common stock for cash under Employee Stock Purchase Plan		—			148
Net cash provided by financing activities		228			159
Net increase (decrease) in cash, cash equivalents, and restricted cash		4,763			(13,980	)
Effect of foreign currency exchange rate on cash		2			10
Cash, cash equivalents, and restricted cash at beginning of period		21,392			34,899
Cash, cash equivalents, and restricted cash at end of period	$	26,157		$	20,929
Supplemental cash flow information:
Cash and cash equivalents	$	25,846		$	20,618
Restricted cash		311			311
Cash, cash equivalents, and restricted cash at end of period	$	26,157		$	20,929

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Inozyme Pharma, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(amounts in thousands, except share and per share data and where otherwise noted)

1. Organization and Basis of Presentation

Inozyme Pharma, Inc. (the “Company”) is a clinical-stage biopharmaceutical company developing novel therapeutics for rare diseases impacting bone health and blood vessel function.

Through the Company’s in-depth understanding of a key biological pathway, the PPi-Adenosine Pathway, the Company is pursuing the development of therapeutics that address pathologic mineralization and intimal proliferation, or smooth muscle cell overgrowth that leads to narrowing and the obstruction of blood vessels, to improve the underlying causes of these debilitating diseases. The ENPP1 enzyme is central to this pathway and generates plasma pyrophosphate ("PPi") and adenosine. It is well established that low levels of PPi drive pathologic mineralization and low levels of adenosine drive intimal proliferation in a number of rare diseases. Disruptions in this pathway impact the levels of these molecules, leading to severe musculoskeletal, cardiovascular, and neurological conditions, including ENPP1 Deficiency, ABCC6 Deficiency, calciphylaxis, and ossification of the posterior longitudinal ligament. The Company is initially focused on developing a novel therapy for diseases characterized by pathologic mineralization and intimal proliferation, including ENPP1 Deficiency and ABCC6 Deficiency as well as calciphylaxis.

The Company’s lead product candidate, INZ-701, is a soluble, recombinant, or genetically engineered, ENPP1 fusion protein that is designed to increase PPi and adenosine, enabling the potential treatment of multiple diseases caused by deficiencies in these molecules. By targeting the PPi-Adenosine Pathway, INZ-701 aims to correct pathologic mineralization and intimal proliferation, addressing the significant morbidity and mortality in these devastating diseases.

As part of the Company's strategic review, it is prioritizing activities to support the planned Biologics License Application filing for its lead indication, ENPP1 Deficiency. Patients with ABCC6 Deficiency being treated in the Company's ADAPT long-term extension study, the Company's expanded access program, or under investigator-sponsored investigational new drug application-enabling studies will continue to receive treatment. Any future trials in ABCC6 Deficiency and calciphylaxis will be postponed.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information. Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and note disclosures required by U.S. GAAP for audited year-end financial statements. The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the interim period results. The results for the three month period ended March 31, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. Since the Company’s incorporation in 2017 and through March 31, 2025, the Company has devoted substantially all of its efforts to raising capital, building infrastructure, developing intellectual property, and conducting research and development activities. The Company incurred net losses of $28.0 million for the three months ended March 31, 2025 and had an accumulated deficit of $416.0 million as of March 31, 2025. The Company had net cash used in operating activities of $29.1 million during the three months ended March 31, 2025. The Company had cash, cash equivalents, and short-term investments of $84.8 million as of March 31, 2025. Management believes that based on the Company’s current cash, cash equivalents, and short-term investments as of March 31, 2025 and forecasted negative cash flows from operating activities over the next twelve months, there is substantial doubt about the Company's ability to continue as a going concern for one year after the date that these unaudited condensed consolidated financial statements are issued.

The Company's ability to fund its operations is dependent upon management's plan, which include raising additional capital through potential public or private equity financings, debt financings, collaboration agreements or other capital sources. The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. There can be no assurance that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all.

Because of the numerous risks and uncertainties associated with product development, the Company is unable to predict the timing or amount of increased expenses or when or if the Company will be able to achieve or maintain profitability. Even if the Company is able to generate revenue from product sales, the Company may not become profitable. If the Company fails to become profitable or is unable to sustain profitability on a continuing basis, then the Company may be unable to continue its operations at planned levels and be forced to reduce or terminate its operations.

The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Inozyme Securities Corp., which is a Massachusetts subsidiary created to buy, sell, and hold securities; Inozyme Ireland Limited; and Inozyme Pharma Switzerland GmbH. All intercompany transactions and balances have been eliminated.

Summary of Significant Accounting Policies

The significant accounting policies and estimates used in the preparation of the accompanying condensed consolidated financial statements are described in the Company’s audited consolidated financial statements for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes in the Company’s significant accounting policies during the three months ended March 31, 2025.

Use of Estimates

The preparation of the Company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Estimates and judgments are based on historical information and other market-specific or various relevant assumptions, including, in certain circumstances, future projections that management believes to be reasonable under the circumstances. Actual results could differ materially from estimates. Significant estimates and assumptions are used for, but not limited to, the accruals for research and development expenses. The Company evaluates its estimates and assumptions on an ongoing basis. All revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Concentration of Credit Risk, Significant Suppliers, and Off-Balance Sheet Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and short-term investments and, from time to time, long-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits and limits its exposure to credit risk by placing its cash with high credit quality financial institutions. The Company’s investments are currently composed of U.S. Treasury securities and U.S. government agency debt securities. The Company mitigates credit risk by maintaining a diversified portfolio and limiting the amount of investment exposure as to institution, maturity, and investment type.

The Company is dependent on third-party manufacturers and contract research organizations ("CROs") to supply product candidates and provide services for research and development activities in its programs. In particular, the Company relies and expects to continue to rely on a small number of manufacturers to supply it with its requirements for the active pharmaceutical ingredients and formulated drugs related to these programs. The Company also relies on CROs to conduct its clinical trials. The Company’s programs could be adversely affected if a third-party manufacturer or a CRO is unable to successfully carry out their contractual obligations or meet expected deadlines. If a third-party manufacturer or a CRO needs to be replaced, the Company may not be able to complete its program development on its anticipated timelines and the Company may incur additional expenses as a result, which could be significant.

The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents include cash in readily available checking accounts, money market accounts, and certain marketable securities. Cash is carried at cost, which approximates its fair value. Cash equivalents are carried at fair market value.

Restricted Cash

Restricted cash is composed of amounts held to collateralize the letter of credit related to the Company’s lease arrangements. Restricted cash is classified as either current or non-current based on the terms of the underlying lease arrangement.

3. Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to provide enhancements to annual income tax disclosures. The standard will require more detailed information in the rate reconciliation table and for income taxes paid, among other enhancements. The standard is effective for years beginning after December 15, 2024 and early adoption is permitted. The Company is evaluating this standard to determine if adoption will have a material impact on the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires disclosure, in the notes to the financial statements, of specified information about certain costs and expenses. This ASU is effective for public entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact ASU 2024-03 will have on its consolidated financial statements.

4. Short-Term Investments

Short-term investments consisted of the following:


	March 31, 2025
Description	Maturity	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	1 year or less	$	28,817	$	10	$	—		$	28,827
U.S. government agency debt securities	1 year or less		30,097		9		(3	)		30,103
		$	58,914	$	19	$	(3	)	$	58,930


	December 31, 2024
Description	Maturity	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	1 year or less	$	52,408	$	52	$	—		$	52,460
U.S. government agency debt securities	1 year or less		39,506		42		(2	)	$	39,546
		$	91,914	$	94	$	(2	)	$	92,006

The Company did not have any investments in a continuous unrealized loss position for more than 12 months as of March 31, 2025. As of March 31, 2025, the Company believes that the cost basis of its available-for-sale securities is recoverable, and the Company has the intent and ability to hold its available-for-sale securities until recovery. Therefore, no allowance for credit losses was recorded.

5. Fair Value Measurement

Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

•

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

•

Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

•

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following tables represent the Company’s financial assets measured at fair value on a recurring basis and indicate the level of fair value hierarchy utilized to determine such fair values:


			Fair Value Measurements at Reporting Date Using
Description	March 31, 2025		Level 1		Level 2		Level 3
Assets:
Money market funds (included in cash and cash equivalents)	$	18,724	$	18,724	$	—	$	—
U.S. government agency debt securities		30,103		—		30,103		—
U.S. Treasury securities		28,827		28,827		—		—
Total assets	$	77,654	$	47,551	$	30,103	$	—


			Fair Value Measurements at Reporting Date Using
Description	December 31, 2024		Level 1		Level 2		Level 3
Assets:
Money market funds (included in cash and cash equivalents)	$	20,273	$	20,273	$	—	$	—
U.S. government agency debt securities		39,546		—		39,546		—
U.S. Treasury securities		52,460		52,460		—		—
Total assets	$	112,279	$	72,733	$	39,546	$	—

There have been no transfers between fair value levels during the three months ended March 31, 2025.

6. License and Sponsored Research Agreements

In January 2017, the Company entered into a license agreement with Yale University (“Yale”), which was amended in May 2020 and July 2020, under which the Company licensed certain intellectual property related to ectonucleotide pyrophosphatase/phosphodiesterase enzymes that is the basis for the Company’s INZ-701 development program. Pursuant to the license agreement, as partial upfront consideration, the Company made a payment of approximately $0.1 million to Yale, which amount reflected unreimbursed patent expenses incurred by Yale prior to the date of the license agreement. The Company is responsible for paying Yale an annual license maintenance fee in varying amounts throughout the term ranging from the low tens of thousands of dollars to the high tens of thousands of dollars. As of March 31, 2025, the Company had incurred a life-to-date total of $0.5 million in license maintenance fees to Yale.

The Company is required to pay Yale up to $3.0 million, based on the achievement of a specified net product sales milestone or specified development and commercialization milestones, for each therapeutic and prophylactic-licensed product developed. In January 2022, the Company paid Yale an approximately $0.3 million milestone payment following dosing of the first patient in the Company’s Phase 1/2 clinical trial of INZ-701 in adult patients with ENPP1 Deficiency in November 2021. In March 2022, the Company paid Yale an approximately $0.3 million milestone payment following completion of the first cohort of the Company's Phase 1/2 clinical trial of INZ-701 in adult patients with ENPP1 Deficiency in January 2022. In March 2024, the Company incurred and paid a $0.5 million milestone payment following completion of dosing of the first patient in the Company’s pivotal clinical trial of INZ-701 in pediatric patients with ENPP1 Deficiency. In addition, the Company is required to pay Yale an amount in the several hundreds of thousands of dollars, based on the achievement of a specified net product sales milestone or specified

development and commercialization milestones, for each diagnostic licensed product developed. While the agreement remains in effect, the Company is required to pay Yale low single-digit percentage royalties on aggregate worldwide net sales of certain licensed products, which may be subject to reductions. Yale is guaranteed a minimum royalty payment amount (ranging in dollar amounts from the mid six figures to low seven figures) for each year after the first sale of a therapeutic or prophylactic-licensed product that results in net sales. Yale is guaranteed a minimum royalty payment amount (ranging from the low tens of thousands of dollars to the mid tens of thousands of dollars) for each year after the first sale of a diagnostic licensed product that results in net sales. Such minimum royalty payment amounts are summed for each year after the first sale of both a therapeutic or prophylactic-licensed product and a diagnostic licensed product has occurred. The Company must also pay Yale a percentage in the twenties of certain types of income it receives from sublicensees. The Company is also responsible for costs relating to the prosecution and maintenance of the licensed patents. Finally, subject to certain conditions, all payments due by the Company to Yale will be tripled following any patent challenge or challenge to a claim by Yale that a product is a licensed product under the agreement, made by the Company against Yale if Yale prevails in such challenge.

The Company has also agreed to pay for research support from Yale pursuant to a sponsored research agreement that the Company entered into with Yale in January 2017 and amended in February 2019, February 2022, May 2022, May 2023, January 2024, and December 2024. Under the sponsored research agreement, as amended, the Company agreed to pay Yale an aggregate of $3.4 million over nine years, ending in December 2025. As of March 31, 2025, the Company incurred a total of $3.1 million for research support under this agreement since inception.

7. Commitments and Contingencies

Operating Leases

The Company held the following significant operating leases as of March 31, 2025:

•

8,499 square feet of office space in Boston, Massachusetts that expires in October 2025 with an option to extend the term for five years; and

•

6,244 square feet of laboratory space in Boston, Massachusetts that expires in December 2025 with an option to extend the term for five years.

The exercise of each option was determined not to be reasonably certain and thus neither option was included in the operating lease liability on the condensed consolidated balance sheets as of March 31, 2025 or December 31, 2024.

During the three months ended March 31, 2025, cash paid for amounts included in the measurement of lease liabilities was $0.3 million, and the Company recorded operating lease expense of $0.2 million.

Future lease payments under non-cancelable leases as of March 31, 2025 are as follows:


Year Ending December 31,
2025 (remaining 9 months)	$	684
Total future minimum lease payments		684
Less: interest		15
Present value of operating lease liabilities	$	669
Lease liability - current	$	669

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 arising out of the relationship between such parties and the Company. In addition, the Company has entered into indemnification agreements with members of its board of directors and senior management 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. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations as of March 31, 2025 or December 31, 2024.

Legal Proceedings

The Company is not currently a party to any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses the costs related to its legal proceedings as they are incurred. No such costs have been incurred during the three months ended March 31, 2025 and 2024.

8. Convertible Debt

Loan Agreement with K2 HealthVentures LLC

On July 25, 2022, the Company, as borrower, entered into a loan and security agreement (the "Loan Agreement") with K2 HealthVentures LLC ( together with any other lender from time to time, the “Lenders”), as administrative agent for the Lenders, and Ankura Trust Company, LLC, as collateral agent for the Lenders. The Loan Agreement provides up to $70.0 million principal in term loans, subject to certain customary conditions. The Company received $5.0 million from the first tranche commitment upon closing. The first tranche commitment contained an additional $20.0 million available to be drawn at the Company’s option through March 31, 2023. The Company borrowed the remaining $20.0 million in February 2023. Two subsequent tranche commitments totaling $20.0 million in the aggregate were available to be drawn at the Company’s option during certain availability periods, subject to the achievement of certain clinical and regulatory milestones relating to INZ-701. The Company borrowed $7.5 million under the second tranche commitment in June 2023 and borrowed $12.5 million under the third tranche commitment in December 2023. A fourth tranche commitment of $25.0 million may be made available to be drawn down at the Company’s option through August 31, 2025, subject to use of proceeds limitations and Lender's consent at its discretion. The fourth tranche commitment is subject to an additional 0.75% facility fee. As of March 31, 2025, a total of $25.0 million of borrowing capacity remained available under the Loan Agreement, subject to the terms and conditions set forth therein. As security for its obligations under the Loan Agreement, the Company granted the Lenders a first priority security interest on substantially all of the Company’s assets (other than intellectual property), subject to certain exceptions.

The term loan matures on August 1, 2026, and the Company is obligated to make interest only payments until September 1, 2025, at which point the Company will make monthly payments of equal principal and interest, in an amount which would fully amortize the principal amount of the term loan and accrued interest thereon as of the date of maturity. The term loan bears a variable interest rate equal to the greater of (i) 7.85%, and (ii) the sum of (A) the prime rate last quoted in The Wall Street Journal (or a comparable replacement rate if The Wall Street Journal ceases to quote such rate) and (B) 3.85%; provided that the interest rate cannot exceed 9.60%. The interest rate as of March 31, 2025 was 9.60%. The Company has the option to prepay all, but not less than, all of the outstanding principal balance and all accrued and unpaid interest with respect to the principal balance being repaid of the term loans, subject to a prepayment premium to which the Lenders are entitled. The prepayment fee was 3% prior to the second anniversary of the July 25, 2022 funding date, 2% after the second anniversary but prior to the third anniversary of the funding date, and 1% thereafter if prior to the maturity date. Upon final payment or prepayment of the loans, the Company must pay a final payment equal to 6.25% of the loans borrowed ("Final Fee"), which is being accrued as interest expense over the term of the loan using the effective interest method.

The Lenders may elect, prior to the full repayment of the term loans, to convert up to $5.0 million of outstanding principal of the term loans into shares of the Company’s common stock, at a conversion price of $6.21 per share, subject to customary adjustments and 9.99% and 19.99% beneficial ownership limitations. The Company determined that the embedded conversion option was not required to be separated from the term loan. The embedded conversion option met the derivative accounting scope exception since the embedded conversion option is indexed to the Company’s own common stock and qualifies for classification within stockholders’ equity.

The Loan Agreement contains customary representations and warranties, events of default and affirmative and negative covenants, including covenants that limit or restrict the Company’s ability to, among other things, dispose of assets, make changes to the Company’s business, management, ownership or business locations, merge or consolidate, incur additional indebtedness, incur additional liens, pay dividends or other distributions or repurchase equity, make investments, and enter into certain transactions with affiliates, in each case subject to certain exceptions. Upon the occurrence of an event of default, a default interest rate of an additional 5.00% per annum may be applied to the outstanding loan balances, and the Lender may declare all outstanding obligations immediately due and payable and exercise all of its rights and remedies as set forth in the Loan Agreement and under applicable law. As of March 31, 2025, the Company was in compliance with all covenants under the Loan Agreement.

Subject to certain conditions, the Company granted the Lenders the right, prior to repayment of the term loans, to invest up to $5.0 million in the aggregate in future offerings of common stock, convertible preferred stock, or other equity securities of the

Company that are broadly marketed and offered to multiple investors on the same terms, conditions, and pricing afforded to others participating in any such financing.

The Company incurred debt issuance costs of $0.5 million in connection with the term loan. In addition, at the time of closing, the Company paid to the Lenders a facility fee of $0.4 million, as well as $0.1 million of other expenses incurred by the Lenders and reimbursed by the Company (“Lender Expenses”). The debt issuance costs, Lender Expenses, and the Final Fee are being amortized as additional interest expense over the term of the loan using the effective interest method. At March 31, 2025, the carrying value of the Loan Agreement approximated the fair value of the term loan, considering that it bears interest that is similar to prevailing market rates.

The following table summarizes the impact of the term loan on the Company’s condensed consolidated balance sheet at March 31, 2025:


	March 31, 2025
Gross proceeds	$	45,000
Unamortized debt issuance costs and accretion of final payments, net		1,285
Total debt	$	46,285
Less: current portion		25,700
Long-term debt	$	20,585

Future principal payments, which include the Final Fee, in connection with the Loan Agreement as of March 31, 2025 are as follows:


Fiscal Year
2025	$	14,508
2026		33,305
Total	$	47,813

9. Stockholders’ Equity

July 2023 Underwritten Offering

On July 27, 2023, the Company entered into an underwriting agreement with BofA Securities, Inc., Cowen and Company, LLC and Piper Sandler & Co., as representatives of the several underwriters named therein (collectively, the “Underwriters”), relating to an underwritten public offering of 14,375,000 shares of the Company's common stock, which included 1,875,000 shares issued upon the exercise in full by the Underwriters of their option to purchase additional shares (the "July 2023 Shares"). The closing of the offering took place on August 1, 2023. All of the July 2023 Shares were sold by the Company. The offering price of the July 2023 Shares was $4.80 per share. Net proceeds from the sale and issuance of the July 2023 Shares were approximately $64.4 million, after deducting underwriting discounts and commissions and offering expenses.

Open Market Sale Agreement

On August 11, 2021, the Company filed a universal shelf registration statement on Form S-3, which was declared effective on August 23, 2021 (the "2021 Registration Statement"). Under the 2021 Registration Statement, the Company could offer and sell up to $200.0 million of a variety of securities, including common stock, preferred stock, depositary shares, debt securities, warrants, subscription rights or units from time to time pursuant to one or more offerings at prices and terms to be determined at the time of the sale. In connection with the filing of the 2021 Registration Statement, the Company entered into an Open Market Sale Agreement with Jefferies LLC, as sales agent, pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $50.0 million under an “at-the-market” offering program (the “At-the-Market Offering Program”). On November 7, 2023, the Company filed a universal shelf registration statement on Form S-3, which was declared effective on November 15, 2023 (the “2023 Registration Statement”). Under the 2023 Registration Statement, the Company may offer and sell up to $300.0 million of a variety of securities, including common stock, preferred stock, depositary shares, debt securities, warrants, subscription rights or units from time to time pursuant to one or more offerings at prices and terms to be determined at the time of the sale. On August 6, 2024, in anticipation of the expiration of the 2021 Registration Statement, the Company filed a prospectus supplement (the “2024 Prospectus Supplement”) under the 2023 Registration Statement to register the offer and sale of the outstanding shares that could be sold under the At-the-Market Offering Program, which prospectus supplement superseded and replaced the sales agreement prospectus, dated August 23, 2021, under the 2021 Registration Statement. As of December 31, 2023, the Company had sold 3,553,995 shares of its common stock pursuant to the Open Market Sale Agreement for aggregate net proceeds of

$21.2 million. As of the date of filing of the 2024 Prospectus Supplement, the Company had issued and sold 4,364,440 shares of common stock pursuant to the Open Market Sale Agreement for aggregate gross proceeds of approximately $26.2 million. Under the 2024 Prospectus Supplement, the Company may sell the shares of common stock under the Open Market Sale Agreement for an aggregate offering price of up to approximately $23.8 million. For the year ended December 31, 2024, the Company sold 2,100,903 shares of its common stock pursuant to the Open Market Sale Agreement for aggregate net proceeds of $10.5 million. For the three months ended March 31, 2025, the Company sold 230,045 shares of its common stock pursuant to the Open Market Sale Agreement for aggregate net proceeds of $0.2 million. As of March 31, 2025, approximately $17.0 million remained available for sale under the Open Market Sale Agreement.

Equity Incentive Plans

On July 17, 2020, the Company’s stockholders approved the 2020 Stock Incentive Plan (the “2020 Plan”), which became effective on July 23, 2020. The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards.

On February 27, 2023, the Company's board of directors adopted the 2023 Inducement Stock Incentive Plan (the "Inducement Plan"). The Inducement Plan provides for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards to persons who (a) were not previously an employee or director or (b) are commencing employment with the Company following a bona fide period of non-employment, in either case, as an inducement material to such person’s entry into employment with the Company and in accordance with the requirements of the Nasdaq Stock Market Rule 5635(c)(4).

Stock Options

The Company estimates the fair value of stock options using the Black-Scholes option-pricing model. The underlying assumptions used to value stock options granted to participants using the Black-Scholes option-pricing model were as follows:


	For the Three Months Ended March 31,
	2025	2024
Risk-free interest rate range	3.98% to 4.38%	3.78% to 4.22%
Dividend yield	—	—
Expected term of options (years)	6.02 to 6.08	6.02 to 6.08
Volatility rate range	83.23% to 84.57%	88.35% to 88.55%

The weighted-average grant date fair value of options granted in the three months ended March 31, 2025 was $0.80 per share. The total unrecognized compensation cost related to outstanding option awards as of March 31, 2025 was $13.4 million and is expected to be recognized over a weighted-average period of 2.61 years.

Restricted Stock Units

The weighted-average grant date fair value of restricted stock units ("RSUs") granted in the three months ended March 31, 2025 was $1.06 per share. The total unrecognized compensation cost related to outstanding RSUs as of March 31, 2025 was $0.7 million and is expected to be recognized over a weighted-average period of 2.6 years.

The total compensation cost recognized in the condensed consolidated statements of operations associated with all the stock-based compensation awards granted by the Company is as follows:


	Three Months Ended March 31,
	2025		2024
Research and development	$	828	$	849
General and administrative		1,029		842
Total	$	1,857	$	1,691

10. Net Loss per Share

Net Loss per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net loss per share:


	Three Months Ended March 31,
	2025			2024
Net loss attributable to common stockholders	$	(28,039	)	$	(23,347	)
Net loss per share attributable to common stockholders	$	(0.44	)	$	(0.38	)
Weighted-average common shares outstanding		64,278,527			61,772,279

The Company generated a net loss in all periods presented; therefore, the basic and diluted net loss per share attributable to common stockholders are the same, as the inclusion of the potentially dilutive securities would be anti-dilutive. The Company excluded the following potential shares of common stock, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated:


	Three Months Ended March 31,
	2025		2024
Options to purchase common stock		10,257,029		9,223,135
Unvested restricted stock units		483,400		100,000
Total		10,740,429		9,323,135

11. Segment Reporting

The Company manages its operations as a single segment, focused on developing novel therapeutics for rare diseases impacting bone health and blood vessel function. The Company's Chief Executive Officer, as the Company's chief operating decision maker ("CODM"), manages and allocates resources at a consolidated level.

The CODM assesses performance, monitors budget versus actual results, and decides how to allocate resources based on net loss that also is reported on the consolidated statement of operations and comprehensive loss as consolidated net loss.

The accounting policies of the Company's single operating segment are the same as those described in the summary of significant accounting policies in Note 2. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. In the first three months of 2025 and in 2024, all the Company's long-lived assets were held in the United States. Expenditures for the addition of long-lived assets are reported on the consolidated statements of cash flows as purchases of property and equipment.

The company does not have intra-entity sales or transfers.

The following table presents reportable segment profit and loss, including significant expense categories, attributable to the Company's reportable segment for the periods presented:


	Three Months Ended March 31,
	2025			2024
Clinical	$	6,050		$	5,751
CMC		6,393			4,226
Other research and development expense (1)		2,236			3,426
Personnel expense - R&D		5,701			4,362
Personnel expense - G&A		2,231			1,815
Stock-based compensation expense		1,857			1,691
Administrative & facilities expense (2)		3,221			3,074
Interest income		(1,117	)		(2,374	)
Interest expense		1,405			1,325
Other expense, net		62			51
Net loss	$	28,039		$	23,347

(1) Other research and development expenses primarily consist of consulting, regulatory support, toxicology, sponsored research costs, and other research and development activities.

(2) Administrative & facilities expense primarily consists of facilities expenses, depreciation expense, legal costs, insurance, consulting, and other administrative costs.

12. Restructuring

In March 2025, the Company announced a reprioritization to focus resources on its ENPP1 Deficiency program, which resulted in a reduction of the Company’s workforce by approximately 25% across all areas of the Company.

The Company incurred $1.9 million of costs related to the reprioritization. The restructuring charges have been recognized in the unaudited condensed consolidated statement of operations during the three months ended March 31, 2025. These costs relate to employee severance, termination benefits and related costs. The Company does not expect to incur any additional significant costs related to the reprioritization.

The reprioritization costs are included within accrued expenses on the condensed consolidated balance sheet as of March 31, 2025 and are expected to be disbursed during the period from April 1, 2025 through December 31, 2025.

The following is a summary of the activity for accrued severance, termination benefits and related costs for the three months ended March 31, 2025:


	2025
Accrual, January 1	$	-
Charges		1,900
Cash payments		-
Accrual, March 31	$	1,900

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission ("SEC") on March 10, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of our most recent Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by these forward-looking statements. For convenience of presentation, some of the numbers have been rounded in the text below.

Overview

We are a clinical-stage biopharmaceutical company dedicated to developing innovative therapeutics for rare diseases that affect bone health and blood vessel function. Our expertise lies in the PPi-Adenosine Pathway, where the ENPP1 enzyme generates inorganic pyrophosphate ("PPi"), which regulates mineralization, and adenosine, which controls intimal proliferation (the overgrowth of smooth muscle cells inside blood vessels). It is well established that low levels of PPi drive pathologic mineralization and low levels of adenosine drive intimal proliferation in a number of rare diseases. Disruptions in this pathway impact the levels of these molecules, leading to severe musculoskeletal, cardiovascular, and neurological conditions, including ENPP1 Deficiency, ABCC6 Deficiency, calciphylaxis, and ossification of the posterior longitudinal ligament ("OPLL").

We are initially focused on developing a novel therapy for diseases characterized by pathologic mineralization and intimal proliferation, including ENPP1 Deficiency and ABCC6 Deficiency as well as calciphylaxis. We are prioritizing activities to support the planned Biologics License Application ("BLA") filing for INZ-701 for our lead indication, ENPP1 Deficiency. Patients with ABCC6 Deficiency being treated in our ADAPT long-term extension study, our expanded access program, or under investigator-sponsored INDs will continue to receive treatment. Any future trials in ABCC6 Deficiency and calciphylaxis will be postponed.

ENPP1 and ABCC6 Deficiencies are rare chronic, systemic, and progressive genetic diseases occurring over the course of a patient’s lifetime, starting as early as fetal development and spanning into adulthood. These diseases represent a significant unmet medical need, with high mortality rates for infants with ENPP1 Deficiency and high levels of morbidity occurring for patients with these diseases throughout their lives. Calciphylaxis is a rare disorder with a high mortality rate that mostly affects patients with end-stage kidney disease ("ESKD"). There are currently no approved therapies for ENPP1 Deficiency, ABCC6 Deficiency, or calciphylaxis. Currently available treatments seek to minimize the manifestations of these diseases and do not address the underlying causes.

Our lead product candidate, INZ-701, is a soluble, recombinant, or genetically engineered, ENPP1 fusion protein that is designed to increase PPi and adenosine, to enable the potential treatment of multiple diseases caused by deficiencies in these molecules. By targeting the PPi-Adenosine Pathway, INZ-701 aims to correct pathologic mineralization and intimal proliferation, addressing the significant morbidity and mortality in these devastating diseases. We have generated robust proof of concept data in preclinical models of ENPP1 Deficiency, ABCC6 Deficiency and, in support of our calciphylaxis program, chronic kidney disease demonstrating that INZ-701 prevented pathologic mineralization and skeletal abnormalities, led to improvements in overall health and survival, and prevented intimal proliferation.

We are currently conducting clinical trials of INZ-701 for the treatment of ENPP1 Deficiency, ABCC6 Deficiency, and calciphylaxis. The U.S. Food and Drug Administration ("FDA") has granted Orphan Drug Designation and the European Medicines Agency ("EMA") has granted Orphan Designation to INZ-701 for the treatment of ENPP1 Deficiency, ABCC6 Deficiency and calciphylaxis. The FDA has also granted fast track designation for INZ-701 for the treatment of ENPP1 Deficiency, for the treatment of ABCC6 Deficiency and for the treatment of calciphylaxis, and rare pediatric disease designation for INZ-701 for the treatment of ENPP1 Deficiency. Refer to the "Clinical Overview—ENPP1 Deficiency", "Clinical Overview— ABCC6 Deficiency" and "Clinical Development of INZ-701 for Calciphylaxis" sections below for further details on our clinical programs.

Executive Summary

During the three months ended March 31, 2025, we continued to advance our ongoing clinical trials of INZ-701 in patients with ENPP1 and ABCC6 Deficiencies. Key highlights and accomplishments during the three months ended March 31, 2025, as well as upcoming anticipated milestones include:

Key Highlights

•

In May 2025, we announced interim anti-drug antibody (ADA) and serum phosphate data from the ENERGY 3 pivotal trial of INZ-701 in pediatric patients with ENPP1 Deficiency, based on an interim evaluation conducted as part of ongoing safety monitoring.

•

In May 2025, we announced that the U.S. Centers for Medicare & Medicaid Services (CMS) has accepted a new set of ICD-10 diagnosis codes to support the classification of disorders of pyrophosphate metabolism, including ENPP1 Deficiency.

•

In May 2025, we reached an agreement with Japan’s Pharmaceuticals and Medical Devices Agency to accept ex-Japan clinical data for filing, without requiring Japanese patients.

•

In May 2025, we announced the appointment of Petra Duda, M.D., Ph.D., as Chief Medical Officer, effective May 15, 2025. Dr. Duda succeeded Kurt Gunter, M.D., who has retired and has transitioned to an advisory role.

•

In April 2025, we received EMA Orphan Designation to INZ-701 for the treatment of calciphylaxis.

•

In April 2025, we announced a publication in JBMR Plus titled, “Phenotypic characterization of ENPP1 deficiency: generalized arterial calcification of infancy and autosomal recessive hypophosphatemic rickets type 2”.

•

In March 2025, we announced our strategic reprioritization of activities to support the planned BLA filing for INZ-701 for our lead indication, ENPP1 Deficiency.

•

In January 2025, we received fast track designation from the FDA for INZ-701 for the treatment of calciphylaxis.

•

In January 2025, we announced positive interim data for INZ-701 in infants and young children with ENPP1 Deficiency.

•

In January 2025, we announced regulatory guidance from the FDA and EMA supporting further clinical development of INZ-701 in children with ABCC6 Deficiency.

•

In January 2025, we announced completion of enrollment in the ENERGY 3 pivotal trial of INZ-701 in pediatric patients with ENPP1 Deficiency. We expect topline data to follow in the first quarter of 2026 from the ENERGY 3 pivotal trial.

Clinical Overview

Clinical Development of INZ-701 for ENPP1 Deficiency

Phase 1/2 Clinical Trial in Adults with ENPP1 Deficiency

In November 2021, we initiated our Phase 1/2 clinical trial of INZ-701 in adult patients with ENPP1 Deficiency. The Phase 1/2 clinical trial of INZ-701 is an open-label, first-in-human, multiple ascending dose trial. The trial primarily assessed the safety and tolerability of INZ-701 in adult patients with ENPP1 Deficiency, as well as characterized the pharmacokinetic and pharmacodynamic profile of INZ-701, including evaluation of levels of plasma PPi and other biomarker levels. In the Phase 1 dose-escalation portion of the trial, we assessed INZ-701 for 32 days at doses of 0.2 mg/kg, 0.6 mg/kg, and 1.8 mg/kg administered via subcutaneous injection twice per week, as well as at a dose of 1.2 mg/kg, administered via subcutaneous injection once per week, with three patients planned per dose cohort. Patients received a single dose and then began twice-weekly dosing one week later. The trial enrolled 13 patients with ENPP1 Deficiency at sites in North America and Europe. The Phase 1 dose-escalation portion of the trial sought to identify a safe and tolerable dose that increased plasma PPi levels, and that can be used for further clinical development. The Phase 1 dose-escalation portion of the trial is complete. The open-label Phase 2 extension portion of the trial assessed long-term safety, pharmacokinetics, and pharmacodynamics of continued treatment with INZ-701 for up to 48 weeks, where patients received doses of INZ-701 at home depending on site-specific protocols. Exploratory endpoints include evaluations of ectopic calcification, skeletal, vascular, and physical function, patient-reported outcomes and exploratory biomarkers. Exploratory biomarker data were collected to provide evidence of the potential for disease modification with ongoing treatment with INZ-701.

In February 2023, we reported interim pharmacokinetic, pharmacodynamic, and safety data from this trial. A rapid, significant, and sustained increase in plasma PPi was observed in all dose cohorts and in all patients, with a target plasma PPi threshold observed from the lowest dose of 0.2 mg/kg. Plasma PPi increased in all patients to levels comparable to those observed in

our study of healthy subjects (n=10) (1002 nM to 2169 nM). The mean baseline plasma PPi across all three cohorts in the trial was 426±407 nM. Notable changes in patient reported outcomes and functional outcomes were observed in all cohorts, including concordant improvement in global impression of change scores reported by patients (“P-GIC”) and clinicians (“C-GIC”), and no patient showed a deterioration from baseline.

In April 2024, we reported positive topline safety, pharmacokinetic, pharmacodynamic, and exploratory efficacy data from this trial. Notable changes from baseline in key biomarkers were observed and support our clinical hypothesis. Significant reductions of fibroblast growth factor-23, increases in bone specific alkaline phosphatase levels, and decreases in c-telopeptide were observed in the 1.8 mg/kg dose cohort (Cohort 3) through week 48, which indicates the restoration of proper bone mineralization. Favorable responses on the Patient-Reported Outcome Measurement Information Scales of Pain Intensity, Fatigue and Pain Interference, and P-GIC were maintained. INZ-701 was generally well-tolerated and exhibited a favorable safety profile, with no serious or severe adverse events ("AEs") attributed to INZ-701 and no AEs leading to study withdrawal. Time on study ranged from 84 to over 1008 days. Total time on treatment across all dose cohorts corresponded to approximately 12+ patient-years. INZ-701 exhibited a favorable immunogenicity profile with low titers of anti-drug antibodies ("ADAs") not impacting drug exposure observed in 10 of 13 patients. The ADA levels were transient in six of 10 patients. Plasma PPi levels observed after INZ-701 administration are shown in the table below:


			Mean Plasma PPi (nM) ± SEM
			Cohort 1 (0.2 mg/kg)	Cohort 2 (0.6 mg/kg)	Cohort 3 (1.8 mg/kg)	Cohort 4 (1.2 mg/kg)
Phase 1	Single Dose	Day 1-8	1229±87	1438±146	1220±87	1214±89
Phase 1	Chronic dose*	Day 11-32	1494±111	1745±170	1352±71	1976±226
Phase 2	Chronic dose*	Day 32-1008	1235±94	1253±102	1608±229	1578±104

Cohort 1 n=2 post day 84; Cohort 2 n=2 post day 336; Cohort 3 n=2 post day 504; Cohort 4 n=3 post day 108

* Cohort 1-3=2x/week dosing; Cohort 4=1x/week dosing

The last patient’s last visit occurred in the fourth quarter of 2024. All patients completing the extension phase are enrolled in our ongoing open label long term safety trial of INZ-701 in patients with ENPP1 or ABCC6 Deficiencies who have received INZ-701 in an existing trial (“ADAPT”).

ENERGY 1 Clinical Trial in Infants with ENPP1 Deficiency and ABCC6 Deficiency

In June 2023, we dosed the first infant patient in our Phase 1b, single arm, open-label clinical trial of INZ-701 (the "ENERGY 1 trial"), designed primarily to assess the safety, tolerability, pharmacokinetics, and pharmacodynamics of INZ-701 in infants with ENPP1 Deficiency and ABCC6 Deficiency. The ENERGY 1 trial design was amended in the second quarter of 2024 to allow enrollment of infants with ABCC6 Deficiency and to increase the maximum number of patients. The ENERGY 1 trial is expected to enroll up to 16 infants between the ages of birth and 12 months across multiple sites in the United States and Europe. Patients will receive subcutaneous doses of INZ-701 during the treatment period of 52 weeks and may continue to receive INZ-701 in an extension period beyond 52 weeks. Doses range from 0.2 mg/kg once weekly through 2.4 mg/kg once weekly, with the ability to modify the dose depending on the results of pharmacokinetics, pharmacodynamics, and safety data. Other outcome measures include evaluation of plasma PPi levels, survival, growth, development, functional performance, cardiac function, and exploratory biomarkers.

In January 2025, we reported interim data from the ENERGY 1 trial (reporting data from three infants) and our expanded access program (reporting data from two infants and one 2.5 year old child) which evaluated patients with generalized arterial calcification of infancy, a severe manifestation of ENPP1 Deficiency. Patients were treated with INZ-701 for periods of three weeks to 22 months. Key results included:

•

Improved Survival: 80% of infants treated with INZ-701 survived beyond their first year, compared to a historical survival rate of approximately 50%.

•

Reduction in Arterial Calcifications: Substantial reductions or stabilization of arterial calcifications were observed in all surviving patients, including complete resolution in some instances. There was no evidence of progression of arterial calcification in any patient.

•

Improved Heart Function: Stabilization or improvement in left ventricular ejection fraction (LVEF) was noted in all surviving patients.

•

Reduced Risk of Rickets: No radiographic evidence of rickets was observed in patients evaluated beyond one year of age and at-risk of rickets development (n=3), supported by stabilization or increases in serum phosphate levels.

•

Favorable Safety Profile: INZ-701 was well-tolerated, with no new safety signals observed. ADAs impacting pharmacokinetics and pharmacodynamics were only seen in three infants and were not seen in any patient initiating treatment after 1 year of age. Where measured, PPi and drug levels were substantially elevated post-dose in these infants, consistent with the clinical effects observed. ADAs were not associated with adverse events in any patient.

In May 2025, we announced preliminary ADA data from the ENERGY 1 clinical trial and our expanded access program. In INZ-701 treated infants who developed high-titer ADAs affecting exposure (n=3), ADA titers stabilized or declined over time following transition to twice-weekly dosing, or a dose increase. These data suggest that extended treatment duration, dose concentration and/or increased dosing frequency may mitigate immunogenicity in this population. This trend is consistent with data seen in other enzyme replacement therapies.

Notably, one infant with high-titer ADAs carried the same homozygous mutation as an adult patient in our completed Phase 1/2 trial of INZ-701 in ENPP1 Deficiency who had a low titer antibody response (range 40-160), which we believe suggests that impactful ADA responses may be restricted to the youngest patients.

Global Development Strategy of INZ-701 for the Treatment of ENPP1 Deficiency

We initiated pivotal trial meetings with the FDA in the first quarter of 2023. In July 2023, we announced a regulatory update for our global development strategy of INZ-701 for the treatment of ENPP1 Deficiency following meetings with the FDA and the Paediatric Committee of the EMA ("PDCO"). Also in July 2023, we completed a scientific advice procedure and reached alignment with the Committee for Medicinal Products for Human Use ("CHMP") regarding our global development strategy.

We plan to conduct pivotal clinical trials of INZ-701 designed to support registration in infant, pediatric, and adult patient populations with ENPP1 Deficiency. Many companies pursuing marketing approval for enzyme replacement therapies in rare diseases have followed a similar clinical development strategy.

In the fourth quarter of 2024, we opened the first site for the ENERGY 2 trial, an open label, single arm, pivotal trial of INZ-701 in infants with ENPP1 Deficiency, outside of the United States and patient recruitment is underway. The trial’s co-primary endpoints will be change in plasma PPi from baseline and survival. The trial is expected to enroll up to 12 infants between birth and up to 12 months of age. Primary endpoint data from this trial will be compared to a natural history control group with patients matched on covariates associated with mortality.

We have reached agreement with the PDCO on a Paediatric Investigational Plan for a pivotal trial of INZ-701 in pediatric patients with ENPP1 Deficiency. In September 2023, we opened the first site for the ENERGY 3 trial, a multicenter, randomized, open label trial, and in January 2025 completed enrollment with 27 patients between the ages of one and less than 13 years across sites globally. The trial is designed primarily to assess the efficacy and safety of INZ-701 in pediatric patients with ENPP1 Deficiency. Enrollment criteria for the trial includes a confirmed genetic diagnosis of ENPP1 Deficiency, radiographic evidence of skeletal abnormalities and low plasma PPi. Patients were randomized in a 2:1 ratio to an INZ-701 arm or a control arm (which uses the conventional therapies of oral phosphate and active vitamin D) for 52 weeks, followed by an open label extension period during which all patients may receive INZ-701. INZ-701 will be administered at a 2.4 mg/kg once weekly dose via subcutaneous injection.

The ENERGY 3 trial is a single, multicenter, clinical trial with differences in the statistical treatment of endpoints, based on guidance from the FDA and CHMP. In the United States, the primary endpoint is change in plasma PPi from baseline, and the

secondary endpoints are Radiographic Global Impression of Change (“RGI-C”) score, Rickets Severity Score, Growth Z-score and pharmacokinetics. Based on recommendations from the FDA, the primary endpoint of change in plasma PPi should be supported by consistent trends in appropriate secondary endpoints and adequate overall scientific justification that plasma PPi is a clinically meaningful biomarker in patients with ENPP1 Deficiency. Based on the agreed Paediatric Investigational Plan with PDCO and CHMP advice, plasma PPi and RGI-C are co-primary endpoints in Europe, with a relaxed p-value of <0.2 for RGI-C. With 27 patients enrolled, the trial's 2:1 randomized design provides over 90% power to detect meaningful differences in RGI-C between the treatment and control groups.

In September 2023, we opened the first site for the ENERGY 3 trial. We completed enrollment in January 2025. We anticipate reporting topline data from the ENERGY 3 trial in the first quarter of 2026. Pending appropriate financial resources, we may conduct additional clinical trials of INZ-701 in adolescents and adults with ENPP1 Deficiency.

In May 2025, we announced preliminary ADA and serum phosphate data from our ENERGY 3 trial based on an evaluation conducted as part of ongoing safety monitoring.

The ADA analysis included 17 of the 19 patients in the INZ-701 treatment arm who had completed at least 13 weeks of dosing. Of these 17 patients, 15 had no detectable ADAs or low titer responses. The highest titer among these 15 patients was 1,280 - a level comparable to those previously observed in our adult trials (INZ701-101 and INZ701-201). These titer levels in adults had no effect on drug exposure or patient safety and typically declined over time with continued treatment.

Two of the 17 patients exhibited higher-titer ADA responses (5,120 and 40,960), similar to some observations in infants which correlated with reduced drug exposure. The median titer at 13 weeks was 80 across all 17 patients.

At this time, ADAs have not been associated with any impact on patient tolerability or adverse events. The safety and immunogenicity profile observed to date in the ENERGY 3 trial is consistent with what was observed in our prior Phase 1/2 trials in adults.

Interim serum phosphate data from ENERGY 3 demonstrated that mean serum phosphate levels increased over time in the INZ-701 arm, while levels declined in the conventional therapy arm, despite ongoing active vitamin D3 and phosphate supplementation. At Week 13, mean serum phosphate levels increased from baseline by +8.2% in the INZ-701 arm (n=17), compared to a decrease of -0.04% in the conventional treatment arm (n=7). The separation in serum phosphate levels between arms increased over time. By Week 26, mean phosphate levels increased by +6.8% in the INZ-701 arm (n=11) and decreased -5.5% in the conventional treatment arm (n=6). Through Week 39, mean phosphate levels increased by +12.1% in the INZ-701 arm (n=4), versus a -9.0% decrease in the conventional treatment arm (n=2). Overall, 6 of 17 patients (35%) treated with INZ-701 achieved normal serum phosphate levels at least once, while no patients in the conventional treatment arm reached the normal range.


	Serum Phosphate (mg/dL)
Treatment	Baseline (n)	Week 13 (n)	Week 26 (n)	Week 39 (n)
INZ-701	2.68 ± 0.32 (18)	2.89 ± 0.31 (17)	2.86 ± 0.42 (11)	3.00 ± 0.35 (4)
Conventional Tx	2.50 ± 0.29 (8)	2.50 ± 0.35 (7)	2.37 ± 0.45 (6)	2.28 ± 0.02 (2)


	% mean change of serum phosphate from baseline
Treatment	Week 13 (n)	Week 26 (n)	Week 39 (n)
INZ-701	+8.2 (17)	+6.8 (11)	+12.1 (4)
Conventional Tx	-0.04 (7)	-5.5 (6)	-9.0 (2)

Normal serum phosphate levels for this group of patients ranged from 3.1 to 6.1 milligrams/deciliter (mg/dL). The normal range of serum phosphate levels varies by age and sex, and ranges may vary by testing laboratory. Data: Mean ± SD; Conventional Tx: active vitamin D3 + phosphate.

These findings are consistent with responses observed with other therapeutic approaches treating different forms of hypophosphatemic rickets and we believe support the potential of INZ-701 to address the underlying pathophysiology of ENPP1 Deficiency and improve long-term skeletal outcomes.

Basis for Planned Marketing Applications

Based on regulatory feedback from the FDA and EMA, positive data from the ongoing and planned clinical trials of INZ-701 in patients with ENPP1 Deficiency, including comprehensive data demonstrating clinical impact of plasma PPi, could provide the basis for our submission of marketing applications in both the United States and the European Union. These data will include final results from our Phase 1/2 clinical trial in adult patients with ENPP1 Deficiency, available results from our ongoing ENERGY 1 trial and expanded access program, available results from the ongoing pivotal ENERGY 2 trial in infants which we are conducting outside of the United States, and final results from the ongoing pivotal ENERGY 3 trial in pediatric patients.

If these marketing applications are approved, we expect to commercially launch INZ-701 as early as the first half of 2027.

Clinical Development of INZ-701 for ABCC6 Deficiency

In April 2022, we initiated our Phase 1/2 clinical trial of INZ-701 in adult patients with ABCC6 Deficiency. The Phase 1/2 clinical trial of INZ-701 is an open-label multiple ascending dose trial, which enrolled 10 adult patients at sites in the United States and Europe. The trial primarily assessed the safety and tolerability of INZ-701 in adult patients with ABCC6 Deficiency, as well as characterized the pharmacokinetic and pharmacodynamic profile of INZ-701, including the evaluation of levels of plasma PPi and other biomarker levels. In the Phase 1 dose-escalation portion of the clinical trial, we assessed INZ-701 for 32 days at doses of 0.2 mg/kg, 0.6 mg/kg, and 1.8 mg/kg administered via subcutaneous injection, with three patients per dose cohort, which doses were selected based on preclinical studies and pharmacokinetic/pharmacodynamic modeling. Patients received a single dose and then began twice-weekly dosing one week later. The Phase 1 dose-escalation portion of the trial sought to identify a safe and tolerable dose that increased plasma PPi levels for further clinical development. The open-label Phase 2 extension portion of the trial assessed long-term safety, pharmacokinetics, and pharmacodynamics of continued treatment with INZ-701 for up to 48 weeks, where patients received doses of INZ-701 at home depending on site-specific protocols. Exploratory endpoints included evaluations of ectopic calcification, vascular and retinal function, patient reported outcomes, and exploratory biomarkers.

Beginning in January 2023, self-administration of INZ-701 in the open-label Phase 2 extension portion of the trial was available.

In February 2023, we reported interim pharmacokinetic, pharmacodynamic, and safety data from this trial. A rapid, significant, and sustained increase in plasma PPi was observed in all cohorts with a dose response observed. Plasma PPi showed sustained increase in the highest dose cohort to levels comparable to those observed in our study of healthy subjects (n=10) (1002 nM to 2169 nM). Mean baseline plasma PPi across all three cohorts in the trial was 947±193 nM.

In April 2024, we reported positive topline safety, pharmacokinetic, pharmacodynamic, and exploratory efficacy data from this trial. Exploratory markers of clinical benefit were collected throughout the trial to provide evidence of the potential for disease modification with ongoing INZ-701 treatment. Reduction or stabilization of carotid intima-media thickness was observed across all dose cohorts (seven of eight evaluable patients), indicating a potential beneficial effect of INZ-701 on vascular pathology. Increased choroidal thickness was observed across all dose cohorts (seven of eight evaluable patients), which indicated a potential beneficial effect of INZ-701 on retinal disease. Four of six evaluable patients with Global Visual Function Questionnaire ("VFQ-25") scores below normal at baseline improved over 48 weeks. Improvement in visual function was greater in older patients. A correlation between improvements in VFQ-25 and increases in choroidal thickness was preserved after 48 weeks. All evaluable patients (nine of nine) showed improvement from baseline on C-GIC, and seven of nine evaluable patients showed improvement from baseline on P-GIC. The rapid increase in plasma PPi levels observed at the 1.8 mg/kg dose level (Cohort 3) was sustained to levels comparable to those observed in our study of healthy subjects (n=10). INZ-701 was generally well tolerated and exhibited a favorable safety profile, with no serious or severe AEs. All AEs were mild to moderate in severity. Time on study ranged from 45 to over 840 days, and total time on treatment across all cohorts corresponded to approximately 12+ patient-years. INZ-701 exhibited a favorable immunogenicity profile with low titers of ADAs not impacting drug exposure observed in eight of 10 patients. The ADA levels were transient in four of eight patients. Plasma PPi levels observed after INZ-701 administration are shown in the table below:


			Mean Plasma PPi (nM) ± SEM
			Cohort 1 (0.2 mg/kg)	Cohort 2 (0.6 mg/kg)	Cohort 3 (1.8 mg/kg)
Phase 1	Single Dose	Day 1-8	1087±162	1326±67	1540±169
Phase 1	2x/Week Dose	Day 11-32	1023±99	1119±48	1312±122
Phase 2	2x/Week Dose	Day 32-840	1212±289	899±76	1358±182

Cohort 1 n=2 post day 749; Cohort 2 n=3; Cohort 3 n=2 post day 84

The last patient’s last visit occurred in July 2024. All patients completing the extension phase have rolled over to the ADAPT trial.

We are prioritizing activities to support the planned BLA filing for INZ-701 for our lead indication, ENPP1 Deficiency. Patients with ABCC6 Deficiency being treated in our ADAPT long-term extension study, our expanded access program, or under investigator-sponsored INDs will continue to receive treatment. Any future trials in ABCC6 Deficiency will be postponed.

Clinical Development of INZ-701 for Calciphylaxis

In February 2024, we initiated SEAPORT 1, a Phase 1 clinical trial designed to assess the safety, tolerability, pharmacokinetics, and pharmacodynamics of INZ-701 in patients with ESKD receiving hemodialysis. Patients received 1.8 mg/kg of INZ-701 once weekly coinciding with their hemodialysis treatment for a total of 30 days. The trial’s primary endpoint assessed safety and change from baseline plasma PPi concentration, with secondary endpoints including pharmacokinetic and pharmacodynamic parameters. In June 2024, SEAPORT 1 was fully enrolled.

In October 2024, we announced positive interim data from SEAPORT 1. The interim data demonstrated that INZ-701 significantly increased PPi levels in ESKD patients receiving hemodialysis, with levels rising into the normal range by week three of the trial’s four-week dosing schedule. The largest changes occurred in patients with the lowest baseline PPi levels.


Timepoint	Mean PPi (nM) ± SEM (n=9)
Baseline-Day 3 pre-dose*	668±78
Day 10 pre-dose	876±231
Day 17 pre-dose	1270±240
Day 24 pre-dose	1582±240

*Baseline consists of three timepoints collected prior to the initiation of dosing

A prior study of healthy subjects (n=10) showed PPi levels between 1002 nM and 2169 nM.

The interim data demonstrated that INZ-701 also led to reductions in biomarkers of mineral metabolism, including serum phosphate and fibroblast growth factor-23, which are implicated in the pathogenesis of vascular calcification in ESKD. These findings suggest INZ-701 may mitigate the risk of pathologic calcification in these patients.

The interim data further demonstrated that INZ-701 was generally well-tolerated and exhibited a favorable safety profile, with no drug-related treatment-emergent adverse events ("TEAEs") reported in the 11 patients who completed the four-week treatment period. All observed TEAEs were mild to moderate in severity except for one case of hyperkalemia requiring urgent dialysis. Consistent drug exposure to INZ-701 was observed with 1.8 mg/kg weekly dosing and pharmacokinetic profiles were consistent with our prior studies in non-hemodialysis patients. We believe these results suggest consistent drug pharmacokinetic profiles can be maintained in dialysis patients, providing further confidence in dose selection for future trials.

Finally, low titers of ADAs were detected in three of 11 patients at the end-of-study timepoint, approximately 30 days after the last dose. Two of these patients became ADA-negative by day 60 after the last dose. The presence of ADAs was not associated with any AEs.

We plan to present additional follow-up data, including characterization of genetic markers associated with PPi and adenosine metabolism, at a later date.

We are prioritizing activities to support the planned BLA filing for INZ-701 for our lead indication, ENPP1 Deficiency. Future trials in calciphylaxis will be postponed.

ADAPT Long-Term Safety Study in Patients with ENPP1 and ABCC6 Deficiencies

In June 2024, we initiated ADAPT, a multicenter, open-label, long-term safety trial of INZ-701 in patients with ENPP1 Deficiency or ABCC6 Deficiency who have received INZ-701 in an existing clinical trial and choose to continue dosing with INZ-701. Patients are eligible if they have completed the protocol-required safety and pharmacokinetic and pharmacodynamic and/or efficacy period(s) of a previous trial with INZ-701. Adult patients will receive once weekly subcutaneous doses of 1.8 mg/kg or a once weekly fixed dose of 150 mg; pediatric patients will receive once weekly subcutaneous doses of 2.4 mg/kg. Other outcome measures include evaluation of pharmacokinetic parameters and plasma PPi with long-term INZ-701 treatment. The ADAPT trial enrolled patients who have completed a Phase 1/2 trial in adults with ENPP1 and ABCC6 Deficiencies at the end of the fourth quarter of 2024.

Expanded Access Program

In February 2023, we dosed our first pediatric patient with ENPP1 Deficiency with INZ-701 under our expanded access program. Under this program, we can use INZ-701 outside of our clinical trials to treat patients with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options and when other criteria are met. Other criteria include, but are not limited to, lack of success from standard treatments, ineligibility for participation in any ongoing clinical trial of INZ-701 (including lack of access due to geographic limitations), and having a disease for which there is sufficient evidence of a projected benefit from the use of INZ-701. We expect that data collected from patients treated under our expanded access program will provide further support for the potential safety and clinical benefits of INZ-701.

ENPP1 Gene Therapy

Our future plans include developing new and innovative therapies to treat ENPP1 Deficiency. We believe we are well-positioned to do so because of our in-depth knowledge of the PPi-Adenosine Pathway. For example, we have identified a gene therapy construct having an optimized ENPP1-Fc sequence driven by a tissue specific promoter in our enzyme replacement therapy program that has shown restoration and sustained enzyme activity leading to an increase of plasma PPi levels in preclinical experiments without adverse effects. Our results to date encourage us to continue to optimize our gene therapy construct as a potential new modality to treat diseases of the PPi-Adenosine Pathway impacting the vasculature, soft tissue and skeleton, in furtherance of our mission to become leaders in the treatment of such diseases.

Treatment of asj/2j mice with ENPP1 Deficiency with an AAV vector containing a modified ENPP1-Fc driven by a tissue specific promoter at three different doses by a single intravenous injection for a period of ten weeks led to a dose dependent increase in PPi levels. Mice treated with vehicle control lacked any plasma PPi, as expected.

The results of this initial study are shown in the graph below:

In another study in asj/2j mice, we evaluated lower doses of an AAV vector containing a modified ENPP1-Fc driven by a tissue specific promoter at three different doses by a single intravenous injection for a period of ten weeks. These studies demonstrated increases in plasma PPi with corresponding prevention of calcification in various tissues, including the aorta, spleen and lung, as well as prevention of skeletal abnormalities such as rickets in the growth plate and ectopic calcification in the vertebrae as shown in the figures below. The vertebral phenotype in the asj/2j mice has similarities to OPLL where it is observed in ENPP1 deficient patients that have biallelic and monoallelic variants. These studies suggested that gene therapy is a potential therapeutic modality for ENPP1 Deficiency.

The results of this study are shown below:

Our Operations

We have not yet commercialized any products or generated any revenue from product sales. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, securing intellectual property rights, conducting research and development activities, conducting preclinical studies and early-stage clinical trials, establishing arrangements for the manufacture of INZ-701, and longer-term planning for potential commercialization.

Since inception, we have incurred significant operating losses. Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of INZ-701 or one or more of our future product candidates and programs.

We expect to continue to incur significant operating expenses for the foreseeable future. In addition, if we obtain marketing approval for INZ-701 or any other product candidate we develop, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing, and distribution. We have incurred and expect to continue to incur additional costs associated with operating as a public company.

As a result, we will need to obtain substantial additional funding to support our continuing operations. Until such time, if ever, as we can generate significant revenues from product sales, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution and licensing arrangements. We do not have any committed external source of funds, other than under our loan and security agreement with K2 HealthVentures LLC (the "Loan Agreement"). Our ability to borrow under our Loan Agreement is subject to our satisfaction of specified conditions and lender discretion. If we are unable to raise capital or obtain adequate funds when needed or on acceptable terms, we may be required to delay, limit, reduce, or terminate our research and development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. In addition, attempting to secure additional financing may divert the time and attention of our management from day-to-day activities and distract from our research and development efforts.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our pipeline of product candidates, or even continue our operations.

As of March 31, 2025 we had cash, cash equivalents, and short-term investments of $84.8 million, which along with the anticipated cost savings from our strategic reprioritization, we believe will enable us to fund our operating expenses and capital expenditures into the first quarter of 2026. However, based on our current operating plan, we believe that our existing cash, cash equivalents, and short-term investments as of March 31, 2025 will not enable us to fund our cash flow requirements for at least the next 12 months from the filing date of this Quarterly Report on Form 10-Q, which raises substantial doubt about our ability to continue as a going concern. We based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us. See “Going Concern.”

To continue to finance our operations, we will need to raise additional capital, which cannot be assured. We anticipate that our expenses will increase substantially if and as we:

•

conduct our ongoing Phase 1/2 clinical trials of INZ-701 for adults with ENPP1 and ABCC6 Deficiencies, our ongoing ADAPT open label long-term safety trial of INZ-701 in patients with ENPP1 or ABCC6 Deficiencies who have received INZ-701 in an existing study, our ongoing Phase 1b clinical trial of INZ-701 for infants with ENPP1 Deficiency, our ongoing pivotal clinical trial of INZ-701 in infants, our ongoing pivotal trial of INZ-701 in pediatric patients with ENPP1 Deficiency, and our ongoing Phase 1 clinical trial of INZ-701 in patients with ESKD receiving hemodialysis;

•

prepare for, initiate, and conduct our planned clinical trials of INZ-701 for patients with ENPP1;

•

conduct research, preclinical testing, and clinical trials of INZ-701 for additional indications;

•

conduct research, preclinical testing, and clinical trials of other product candidates;

•

engage in regulatory interactions with the FDA, the EMA, and other regulatory authorities;

•

submit regulatory filings and seek marketing approval for INZ-701 or any other product candidate if it successfully completes clinical trials;

•

scale up our manufacturing processes and capabilities;

•

establish a sales, marketing, and distribution infrastructure to commercialize any product candidate for which we may obtain marketing approval;

•

in-license or acquire additional technologies or product candidates;

•

make any payments to Yale University ("Yale") under our license agreement or sponsored research agreement with Yale;

•

maintain, expand, enforce, and protect our intellectual property portfolio;

•

hire additional clinical, regulatory, quality control, scientific, and commercial personnel;

•

add operational, financial, and management information systems and personnel, including personnel to support our research, product development, and planned future commercialization efforts and our operations as a public company; and

•

make any principal and interest payments when due under the terms of the Loan Agreement.

Financial Operations Overview

Research and Development Expenses

Research and development activities are central to our business model. Research and development costs consist of direct and indirect costs related to specific projects as well as fees paid to other entities that conduct certain research and development activities on our behalf and primarily relate to costs incurred in connection with the discovery and development of our lead product candidate, INZ-701.

We expense research and development costs as incurred. These expenses include:

•

fees and expenses incurred in connection with the in-license of technology and intellectual property rights;

•

expenses incurred under agreements with third parties, including contract research organizations ("CROs"), and other third parties that conduct research, preclinical, and clinical activities on our behalf as well as third parties that manufacture our product candidates for use in our preclinical studies and clinical trials;

•

manufacturing scale-up expenses and the costs of acquiring and manufacturing preclinical trial materials, including manufacturing validation batches;

•

personnel-related expenses, consisting primarily of salaries, related benefits, and stock-based compensation expense for employees engaged in research and development functions;

•

the costs of acquiring laboratory supplies, and developing preclinical studies and clinical trial materials;

•

costs related to compliance with regulatory requirements; and

•

an allocation of facilities costs, which include depreciation of equipment, and expenses for rent, information technology, utilities, and other operating costs.

We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers. We do not currently track research and development expenses by specific indication.

We are currently conducting our Phase 1/2 clinical trials of INZ-701 for adults with ENPP1 Deficiency and ABCC6 Deficiency, our Phase 1b ENERGY 1 trial for infants with ENPP1 Deficiency, our pivotal ENERGY 3 trial of INZ-701 for pediatric patients with ENPP1 Deficiency, our Phase 1 SEAPORT 1 clinical trial of INZ-701 for patients with ESKD receiving hemodialysis, and our ongoing ADAPT open label long term safety trial of INZ-701 in patients with ENPP1 or ABCC6 Deficiencies who have received INZ-701 in an existing study. Product candidates in later stages of clinical development generally have higher development costs than those in preclinical development or in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result of our prioritization of activities in our ENPP1 Deficiency program, we expect that our research and development expenses will remain consistent in 2025 as compared to 2024

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, related benefits, travel, and stock-based compensation expense for personnel in executive, finance, and administrative functions. General and administrative expenses also include professional fees for legal, consulting, accounting, tax, and audit services, and an allocation of facilities and information technology infrastructure costs. We incur, and anticipate that we will continue to incur, costs associated with being a public company, including costs of accounting, audit, legal, regulatory, compliance and tax-related services related to maintaining compliance with requirements of Nasdaq and the SEC; director and officer insurance costs; and investor and public relations costs. As a result of prioritization of activities in our ENPP1 Deficiency program, we expect that our general and administrative expenses will remain consistent in 2025 as compared to 2024.

Interest Income

Interest income consists of income from bank deposits and investments.

Interest Expense

Interest expense consists of interest expense related to our Loan Agreement, as well as amortization of debt discount and debt issuance costs.

Other Expense, net

Other expense, net primarily consists of realized gains and losses on marketable securities and foreign exchange gains or losses.

Results of Operations

Comparison of the Three Months Ended March 31, 2025 and 2024

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024 (in thousands):


	Three Months Ended March 31,
	2025			2024			Change
Operating expenses:
Research and development	$	20,379		$	19,111		$	1,268
General and administrative		5,409			5,234			175
Restructuring charges		1,900			—			1,900
Total operating expenses		27,688			24,345			3,343
Loss from operations		(27,688	)		(24,345	)		3,343
Other income (expense):
Interest income		1,117			2,374			(1,257	)
Interest expense		(1,406	)		(1,325	)		(81	)
Other expense, net		(62	)		(51	)		(11	)
Other (expense) income, net		(351	)		998			(1,349	)
Net loss	$	(28,039	)	$	(23,347	)	$	4,692

Research and Development Expense

The following table summarizes our research and development expense for the three months ended March 31, 2025 and 2024 (in thousands):


	Three Months Ended March 31,
	2025		2024		Change
INZ-701-related research and development expense	$	14,446	$	13,105		1,341
Unallocated expenses:
Personnel-related expense (including stock-based compensation)		5,228		5,210		18
Facilities and administrative expense		705		796		(91	)
Total		20,379		19,111		1,268

Research and development expense increased $1.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a $1.3 million increase in INZ-701-related research and development expense.

INZ-701-related research and development expense increased $1.3 million primarily due to a $2.2 million increase in chemistry, manufacturing, and controls expense to support our ongoing clinical trials and prepare for potential commercialization,

which was partially offset by a $0.9 million decrease in clinical development and related consulting costs to support our ongoing clinical trials.

General and Administrative Expense

General and administrative expense remained relatively consistent for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Restructuring Charges

In March 2025, we announced a reprioritization to focus resources on our ENPP1 Deficiency program, which resulted in a reduction of the Company’s workforce by approximately 25% across all areas of the Company. Restructuring charges were $1.9 million for the three months ended March 31, 2025, with no equivalent charge for the three months ended March 31, 2024.

Interest Income

Interest income for the three months ended March 31, 2025 decreased approximately $1.3 million compared to the three months ended March 31, 2024 due to a lower cash balance on which we are earning interest in 2025.

Interest Expense

Interest expense remained relatively consistent for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Other Expense, net

Other expense, net remained relatively consistent for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have not generated any revenue and have incurred significant operating losses and negative cash flows from our operations. To date, we have funded our operations primarily with proceeds from the sales of convertible preferred stock, offerings of common stock and pre-funded warrants, and borrowings under our Loan Agreement. Until such time, if ever, as we can generate substantial revenues from product sales, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements.

On August 11, 2021, we filed a universal shelf registration statement on Form S-3, which was declared effective on August 23, 2021 (the "2021 Registration Statement"). Under the 2021 Registration Statement, we could offer and sell up to $200.0 million of a variety of securities, including common stock, preferred stock, depositary shares, debt securities, warrants, subscription rights or units from time to time pursuant to one or more offerings at prices and terms to be determined at the time of the sale. In connection with the filing of the 2021 Registration Statement, we entered into an Open Market Sale Agreement with Jefferies LLC, as sales agent, pursuant to which we may offer and sell shares of our common stock with an aggregate offering price of up to $50.0 million under an “at-the-market” offering program (the “At-the-Market Offering Program”). On November 7, 2023, we filed a universal shelf registration statement on Form S-3, which was declared effective on November 15, 2023 (the “2023 Registration Statement”). Under the 2023 Registration Statement, we may offer and sell up to $300.0 million of a variety of securities, including common stock, preferred stock, depositary shares, debt securities, warrants, subscription rights or units from time to time pursuant to one or more offerings at prices and terms to be determined at the time of the sale. On August 6, 2024, in anticipation of the expiration of the 2021 Registration Statement, we filed a prospectus supplement (the “2024 Prospectus Supplement”) under the 2023 Registration Statement to register the offer and sale of the outstanding shares that could be sold under the At-the-Market Offering Program, which prospectus supplement superseded and replaced the sales agreement prospectus, dated August 23, 2021, under the 2021 Registration Statement. As of December 31, 2023, we had sold 3,553,995 shares of our common stock pursuant to the Open Market Sale Agreement for aggregate net proceeds of $21.2 million. As of the date of filing of the 2024 Prospectus Supplement, we had issued and sold 4,364,440 shares of common stock pursuant to the Open Market Sale Agreement for aggregate gross proceeds of approximately $26.2 million. Under the 2024 Prospectus Supplement, we may sell the shares of common stock under the Open Market Sale Agreement for an aggregate offering price of up to approximately $23.8 million. For the year ended December 31, 2024 we sold 2,100,903 shares of our common stock pursuant to the Open Market Sale Agreement for aggregate net proceeds of $10.5 million. For the three months ended March 31, 2025, we sold 230,045 shares of our common stock pursuant to the Open Market Sale Agreement

for aggregate net proceeds of $0.2 million. As of March 31, 2025, approximately $17.0 million remained available for sale under the Open Market Sale Agreement.

In July 2022, we entered into the Loan Agreement with K2 HealthVentures LLC (together with any other lender from time to time, "the Lenders"), which provides up to $70.0 million principal in term loans consisting of (subject to certain customary conditions): (i) a First Tranche Commitment of $25.0 million, of which $5.0 million was funded at closing and of which the remaining $20.0 million was funded at our election in February 2023, (ii) two subsequent tranche commitments totaling $20.0 million in the aggregate to be drawn at our option during certain availability periods, subject to the achievement, as determined by the administrative agent in its sole discretion, of certain time-based, financial, clinical, and regulatory milestones relating to INZ-701 of which $7.5 million was funded at our election in June 2023 and the remaining $12.5 million was funded at our election in December 2023, and (iii) a fourth tranche commitment of $25.0 million is available to be drawn at our option through August 31, 2025, subject to use of proceeds limitations and Lenders’ consent in its discretion. We have an aggregate of $45.0 million principal in term loans outstanding. The Lenders may elect to purchase up to $5.0 million of shares of our common stock pursuant to the Loan Agreement. Additional information on the Loan Agreement is described in Note 8 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

In August 2023, we closed an underwritten offering in which we sold 14,375,000 shares of common stock under the 2021 Registration Statement. Net proceeds from the offering were approximately $64.4 million, after deducting underwriting discounts and commissions and estimated offering expenses.

Cash in excess of immediate requirements is invested primarily with a view to liquidity and capital preservation. The following table provides information regarding our total cash, cash equivalents, and short-term investments at March 31, 2025 and December 31, 2024 (in thousands):


	March 31, 2025		December 31, 2024
Cash and cash equivalents	$	25,846	$	21,081
Short-term investments		58,930	$	92,006
Total cash, cash equivalents, and short-term investments	$	84,776	$	113,087

Cash Flows

The following table provides information regarding our cash flows for the three months ended March 31, 2025 and 2024 (in thousands):


	Three Months Ended March 31,
	2025			2024
Net cash used in operating activities	$	(29,149	)	$	(24,533	)
Net cash provided by investing activities		33,684			10,394
Net cash provided by financing activities		228			159
Net (decrease) increase in cash, cash equivalents, and restricted cash	$	4,763		$	(13,980	)

Net Cash Used in Operating Activities

Net cash used in operating activities increased approximately $4.6 million in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a $4.7 million increase in our net loss, a $1.8 million increase in prepaid expenses, a $1.7 million adjustment for non-cash items, and $0.2 million in change of remaining operating assets and liabilities.

Net Cash Provided by Investing Activities

Net cash provided by investing activities increased approximately $23.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a $31.4 million decrease in purchases of marketable securities and an $8.1 million increase in sales and maturities of marketable securities in the three months ended March 31, 2025.

Net Cash Provided by Financing Activities

Net cash provided by financing activities increased $0.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to $0.2 million from sales of common stock under our At-The-Market Offering Program, offset by $0.1 million from the issuance of common stock for cash under the Employee Stock Purchase Plan.

Funding Requirements

We expect to devote substantial financial resources toward our ongoing and planned activities, particularly as we execute on our global development strategy, conduct our ongoing clinical trials of INZ-701 for ENPP1 Deficiency, ABCC6 Deficiency, and calciphylaxis, and continue research and development and initiate additional planned clinical trials of, and seek marketing approval for, INZ-701 and any other product candidates we develop. As part of our strategic review, we are prioritizing activities to support the planned BLA filing for INZ-701 for our lead indication, ENPP1 Deficiency. Any future trials in ABCC6 Deficiency and calciphylaxis will be postponed. As a result, we expect that our expenses will decrease in 2025 as compared to 2024. However, if we obtain marketing approval for INZ-701 or any other product candidates we develop, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing, and distribution. In any event, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital or obtain adequate funds when needed or on acceptable terms, we may be required to delay, limit, reduce, or terminate our research and development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. In addition, attempting to secure additional financing may divert the time and attention of our management from day-to-day activities and distract from our research and development efforts.

As of March 31, 2025, we had cash, cash equivalents, and short-term investments of approximately $84.8 million, and we had $45.0 million of outstanding principal indebtedness under our Loan Agreement. We believe that our existing cash, cash equivalents, and short-term investments as of March 31, 2025, along with our recent strategic reprioritization, will enable us to fund our operating expenses and capital expenditures into the first quarter of 2026. However, based on our current operating plan, we believe that our cash, cash equivalents and short-term investments as of March 31, 2025 are not sufficient to fund our operations for at least the next twelve months from the date of issuance of the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q such that there is substantial doubt about our ability to continue as a going concern. Our future viability is dependent on our ability to raise additional capital to finance our operations. We expect to finance our operations through potential public or private equity financings, debt financings, collaboration agreements or other capital sources. Our inability to raise capital as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies. There can be no assurance that our current operating plan will be achieved or that additional funding will be available on terms acceptable to us, or at all. We have based our assessment on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. See “Going Concern,” in Note 1 to our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. In addition, changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected because of circumstances beyond our control. As a result, we could deplete our capital resources sooner than we currently expect. In addition, because the successful development of INZ-701 and any other product candidates that we pursue is highly uncertain, at this time we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the development of any product candidate.

Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. We will not generate commercial revenues unless and until we can achieve sales of products, which we do not anticipate for a

number of years, if at all. Accordingly, we will need to obtain substantial additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms. Our ability to raise additional funds may be adversely impacted by general economic conditions, both inside and outside the U.S., including disruptions to, and instability and volatility in, the credit and financial markets in the U.S. and worldwide, heightened inflation, interest rate and currency rate fluctuations, and economic slowdown or recession as well as concerns related to health epidemics and geopolitical events, including ongoing wars or civil or political unrest. In addition, market instability and volatility, high levels of inflation and interest rate fluctuations may increase our cost of financing or restrict our access to potential sources of future liquidity.

Contractual Obligations, Commitments and Contingencies

During the three months ended March 31, 2025, there were no material changes to our contractual obligations and commitments from those described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. During the three months ended March 31, 2025, there were no material changes to our critical accounting estimates from those described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act of 2012 permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to use the extended transition period for complying with new or revised accounting standards and will do so until such time that we either (1) irrevocably elect to “opt out” of such extended transition period or (2) no longer qualify as an emerging growth company.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk related to changes in interest rates. As of March 31, 2025, our cash equivalents consisted of short-term money market funds and U.S. government agency debt securities. As of March 31, 2025, our short-term investments consisted of U.S. Treasury securities and U.S. government agency debt securities with maturities of less than one year. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Due to the short-term nature of the investments in our portfolio and the low risk profile of our investments, an immediate change of 100 basis points in interest rates would not have a material effect on the fair market value of our investment portfolio or on our financial position or results of operations.

As of March 31, 2025, the aggregate principal amount outstanding under the Loan Agreement was $45.0 million, which bears interest at a variable rate equal to the greater of (i) 7.85% and (ii) the sum of (A) the prime rate last quoted in The Wall Street Journal (or a comparable replacement rate if The Wall Street Journal ceases to quote such rate) and (B) 3.85%; provided that the interest rate cannot exceed 9.60%. Of the $45.0 million aggregate principal amount outstanding, $5.0 million was funded at closing, and we borrowed an additional $20.0 million in February 2023, $7.5 million in June 2023, and $12.5 million in December 2023 under the Loan Agreement. The interest rate as of March 31, 2025 was 9.60%.

We are not currently exposed to significant market risk related to changes in foreign currency exchange rates; however, we have contracted with and may continue to contract with foreign vendors that are located in Europe. Our operations may be subject to fluctuations in foreign currency exchange rates in the future.

Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation had a material effect on our business, financial condition, or results of operations during the three months ended March 31, 2025 and 2024.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2025, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1A. Risk Factors.

In addition to all of the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the following risk and the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10–K for the year ended December 31, 2024, which could materially affect our business, financial condition or results of operations. The risk factors disclosure in our Annual Report on Form 10-K for the year ended December 31, 2024 is qualified by the information that is described in this Quarterly Report on Form 10-Q. The risks described below and in our Annual Report on Form 10–K for the year ended December 31, 2024 are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Changes in and uncertainty surrounding U.S. trade policy could have a material adverse impact on our business, financial condition and results of operations.

The Trump Administration has recently imposed a series of tariffs on U.S. trading partners. On April 2, 2025, the President issued an Executive Order announcing a “baseline” reciprocal tariff of 10% on all U.S. trading partners effective April 5, 2025, and higher individualized reciprocal tariffs on 57 countries (with certain product exemptions for pharmaceutical-related products, among others). Previously, the administration had imposed a 25% tariff on Canada and Mexico for goods not covered by the United States-Mexico-Canada Agreement, or USMCA, and tariffs equaling 20% on China. In response, several countries threatened retaliatory measures, including Canada and China, which then imposed retaliatory tariffs. Prior to when the country-specific reciprocal tariffs were scheduled to take effect, the administration delayed the effective date of such tariffs for all countries except China. The 10% baseline tariff on all countries, including China, remains in effect and the additional “reciprocal” tariffs imposed on China of 34% were, on May 14, 2025, suspended for 90 days. An earlier 20% tariff on China related to the influx of synthetic opioids also remains in effect bringing the total tariffs applicable to all imports from China to 30% as of May 14, 2025 (other potentially applicable tariffs imposed under Section 301 or Section 232 also remain in effect). Canada and Mexico are subject to a tariff of 25% as of May 14, 2025 for goods that are not covered by the USMCA.

Separately, on April 16, 2025, the U.S. Department of Commerce announced an investigation under Section 232 of the Trade Expansion Act of 1962 into imports of pharmaceuticals and pharmaceutical ingredients, including finished drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients, and key starting materials, and derivative products of those items. The investigation will examine the impact of these imports on U.S. national security culminating in a decision by the President whether to take action to remedy any identified threats, including by imposing additional tariffs. The statute provides that the Commerce Department report must be completed within 270 days of initiation of the investigation and that the President must decide whether to act within 90 days of receiving the report.

As a result of changes in tariffs that have been announced and/or implemented, and the underlying uncertainty currently surrounding international trade, we could experience a negative impact to our costs of materials and production processes, and supply chain disruptions and delays as a result of any new tariff policies or trade restrictions. If we are unable to obtain necessary raw materials or product components in sufficient quantity and in a timely manner due to disruptions in the global supply chain caused by macroeconomic events and conditions, the development, testing and clinical trials of our product candidates may be delayed or infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business. We cannot yet predict the effect of the recently imposed U.S. tariffs on imports, or the extent to which other countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon imports or exports in the future, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Sales of Unregistered Equity Securities

We did not issue any securities that were not registered under the Securities Act of 1933, as amended during the three months ended March 31, 2025.

Item 5. Other Information.

None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the three months ended March 31, 2025.

Item 6. Exhibits.


Exhibit Number		Description

3.1		Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39397) filed with the Securities and Exchange Commission on July 28, 2020).

3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39397) filed with the Securities and Exchange Commission on June 14, 2023).

31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1+		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2+		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

* Filed herewith.

+ Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	INOZYME PHARMA, INC.

Date: May 14, 2025	By:	/s/ Douglas A. Treco, Ph.D.
		Douglas A. Treco, Ph.D.
		Chief Executive Officer and Chairman (Principal Executive Officer)

Date: May 14, 2025	By:	/s/ Sanjay S. Subramanian
		Sanjay S. Subramanian
		Chief Financial Officer and Head of Business Development (Principal Financial Officer and Principal Accounting Officer)

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Emerging growth company

Inozyme Pharma, Inc. 10-Q