10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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 October 29, 2024, the registrant had 64,240,198 shares of common stock, $0.0001 par value per share, outstanding.

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:

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.

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

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 ("OPLL"). 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.

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 and nine month periods ended September 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024, 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, 2023.

Liquidity, Capital Resources, and Going Concern

Since the Company’s incorporation in 2017 and through September 30, 2024, 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 $75.0 million for the nine months ended September 30, 2024 and had an accumulated deficit of $360.9 million as of September 30, 2024. The Company had cash, cash equivalents, and short-term investments of $131.6 million as of September 30, 2024.

The Company has incurred recurring losses and negative cash flows from operations since inception and has primarily funded its operations with proceeds from the issuance of convertible preferred stock, offerings of common stock and pre-funded warrants, and its loan and security agreement (the “Loan Agreement”) with K2 HealthVentures LLC (see Note 8). The Company expects its operating losses and negative operating cash flows to continue into the foreseeable future as it continues to expand its research and development efforts.

The accompanying condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities and commitments in the ordinary course of business. The Company believes its available cash, cash equivalents, and short-term investments as of September 30, 2024 will be sufficient to fund its cash flow requirements for at least 12 months from the filing date of this Quarterly Report on Form 10-Q. Management’s expectations with respect to its ability to fund current and long-term planned operations are based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, the Company may need to seek additional strategic or financing opportunities sooner than would otherwise be expected. However, there is no guarantee that any of these strategic or financing opportunities will be executed on favorable terms, or at all, and some could be dilutive to existing stockholders. If the Company is

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, 2023 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2024.

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 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 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.

4. Short-Term Investments

Short-term investments consisted of the following:


	September 30, 2024
Description	Maturity	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	1 year or less	$	45,983	$	96	$	—		$	46,079
U.S. government agency debt securities	1 year or less		60,846		109		(1	)		60,954
		$	106,829	$	205	$	(1	)	$	107,033


	December 31, 2023
Description	Maturity	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	1 year or less	$	80,160	$	59	$	(1	)	$	80,218
U.S. government agency debt securities	1 year or less		73,774		17		(8	)		73,783
		$	153,934	$	76	$	(9	)	$	154,001

The Company did not have any investments in a continuous unrealized loss position for more than 12 months as of September 30, 2024. As of September 30, 2024, 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	September 30, 2024		Level 1		Level 2		Level 3
Assets:
Money market funds (included in cash and cash equivalents)	$	23,631	$	23,631	$	—	$	—
U.S. government agency debt securities		60,954		—		60,954		—
U.S. Treasury securities		46,079		46,079		—		—
Total assets	$	130,664	$	69,710	$	60,954	$	—


			Fair Value Measurements at Reporting Date Using
Description	December 31, 2023		Level 1		Level 2		Level 3
Assets:
Money market funds (included in cash and cash equivalents)	$	33,830	$	33,830	$	—	$	—
U.S. government agency debt securities		73,783		—		73,783		—
U.S. Treasury securities		80,218		80,218		—		—
Total assets	$	187,831	$	114,048	$	73,783	$	—

There have been no transfers between fair value levels during the three or nine months ended September 30, 2024.

6. License Agreement

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 September 30, 2024, the Company had incurred a life-to-date total of $0.4 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 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, and January 2024. Under the sponsored research agreement, as amended, the Company agreed to pay Yale an aggregate of $3.0 million over eight years, ending in December 2024. As of September 30, 2024, the Company incurred a total of $3.0 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 September 30, 2024:

•

8,499 square feet of office space in Boston, Massachusetts that expires in 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 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 September 30, 2024 or December 31, 2023.

During the nine months ended September 30, 2024, cash paid for amounts included in the measurement of lease liabilities was $0.8 million, and the Company recorded operating lease expense of $0.5 million.

Future lease payments under non-cancelable leases as of September 30, 2024 are as follows:


Year Ending December 31,
2024 (remaining 3 months)	$	255
2025		944
Total future minimum lease payments		1,199
Less: interest		50
Present value of operating lease liabilities	$	1,149
Lease liability - current	$	985
Lease liability - long-term	$	164

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 September 30, 2024 or December 31, 2023.

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 and nine months ended September 30, 2024 and 2023.

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 September 30, 2024, 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 September 30, 2024 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 September 30, 2024, 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 September 30, 2024, 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 September 30, 2024:


	September 30, 2024
Gross proceeds	$	45,000
Unamortized debt issuance costs and accretion of final payments, net		643
Total debt	$	45,643
Less: current portion		(3,578	)
Long-term debt	$	42,065

Future principal payments, which include the Final Fee, in connection with the Loan Agreement as of September 30, 2024 are as follows:


Fiscal Year
2024	$	—
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 remaining shares of common stock under the Open Market Sale Agreement for an aggregate offering price of up to approximately $23.8 million. During the three and nine months ended September 30, 2024, the Company sold 2,083,668 shares of its common stock pursuant to the Open Market Sale Agreement for aggregate net proceeds of $10.4 million.

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 September 30,		For the Nine Months Ended September 30,
	2024	2023	2024	2023
Risk-free interest rate range	3.66% to 4.40%	4.15% to 4.23%	3.66% to 4.59%	3.36% to 4.23%
Dividend yield	—	—	—	—
Expected term of options (years)	6.08	6.08	5.50 to 6.08	5.50 to 6.48
Volatility rate range	88.73% to 89.44%	88.39% to 88.96%	88.35% to 90.59%	87.68% to 89.67%

The weighted-average grant date fair value of options granted in the three and nine months ended September 30, 2024 was $3.55 per share and $4.27 per share, respectively. The total unrecognized compensation cost related to outstanding option awards as of September 30, 2024 was $17.8 million and is expected to be recognized over a weighted-average period of 2.76 years.

Restricted Stock Units

The total unrecognized compensation cost related to outstanding RSUs as of September 30, 2024 was $0.4 million and is expected to be recognized over a weighted-average period of 2.50 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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	1,040	$	839	$	2,977	$	2,546
General and administrative		1,086		833		2,997		2,817
Total	$	2,126	$	1,672	$	5,974	$	5,363

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 September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net loss attributable to common stockholders—basic and diluted	$	(24,570	)	$	(16,638	)	$	(74,950	)	$	(49,625	)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.39	)	$	(0.29	)	$	(1.20	)	$	(1.02	)
Weighted-average common shares and pre-funded warrants outstanding—basic and diluted		63,276,851			56,758,395			62,334,482			48,494,175

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. Since the shares underlying the pre-funded warrants were issuable for little or no consideration, they were considered outstanding for both basic and diluted loss per share from the date of issuance. 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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Options to purchase common stock		9,085,594		6,520,878		9,085,594		6,520,878
Unvested RSUs		75,000		100,000		75,000		100,000
Total		9,160,594		6,620,878		9,160,594		6,620,878

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, 2023 filed with the Securities and Exchange Commission ("SEC") on March 12, 2024. 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.

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 pathological mineralization and intimal proliferation, including ENPP1 Deficiency and ABCC6 Deficiency as well as calciphylaxis.

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, 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. 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 and ABCC6 Deficiency. The FDA has also granted fast track designation for INZ-701 for the treatment of ENPP1 Deficiency and for the treatment of ABCC6 Deficiency, and rare pediatric disease designation for INZ-701 for the treatment of ENPP1 Deficiency. Refer to the "Clinical Overview—ENPP1 Deficiency" and "Clinical Overview— ABCC6 Deficiency" sections below for further details on our clinical programs.

During the three months ended September 30, 2024, we continued to advance our ongoing clinical trials of INZ-701 in patients with ENPP1 Deficiency, ABCC6 Deficiency, and calciphylaxis. Key highlights and accomplishments during the three months ended September 30, 2024, as well as upcoming anticipated milestones include:

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 is primarily assessing the safety and tolerability of INZ-701 in adult patients with ENPP1 Deficiency, as well as characterizing 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, with three patients planned per dose cohort. Patients received a single dose and then began twice-weekly dosing one week later. The trial initially enrolled nine 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 increases plasma PPi levels, and that can be used for further clinical development. The Phase 1 dose-escalation portion of the trial is complete. The ongoing open-label Phase 2 extension portion of the trial is assessing long-term safety, pharmacokinetics, and pharmacodynamics of continued treatment with INZ-701 for up to 48 weeks, where patients may receive 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. 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 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 a study of healthy subjects (n=10) (1002 nM and 2169 nM). The mean baseline plasma PPi across all three cohorts in the trial was 426±407 nM.

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. In the fourth quarter of 2023, we dosed two patients in a fourth cohort at 1.2 mg/kg to investigate the potential for once weekly dosing of INZ-701 in the ongoing trial. We completed enrollment of this fourth cohort in the fourth quarter of 2023. Data from the once-weekly dose cohort showed a sustained increase in plasma PPi 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 adverse events ("AEs") attributed to INZ-701 and no AEs leading to study withdrawal. Eleven patients remain in the trial, and 10 self-administer INZ-701 treatment. Time on study ranged from 22 to over 742 days. Total time on treatment across all dose cohorts corresponds to approximately 12+ patient-years. INZ-701 exhibited a favorable immunogenicity profile with low titers of non-neutralizing anti-drug antibodies ("ADA") observed in 11 of 14 patients. The ADA levels were transient in three of 11 patients. Plasma PPi levels observed after INZ-701 administration are shown in the table below:

Cohort 1 – n=2 post day 84; Cohort 2 n=2 post day 336; Cohort 3 n=2 post day 252

All patients currently enrolled have completed the dose escalation period and are expected to complete at least through week 44 of the extension period. The last patient’s last visit is expected by the end of the fourth quarter of 2024. The remaining enrolled patients are expected to complete enrollment 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”) by the end of the fourth quarter of 2024.

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. The ENERGY 1 trial is expected to enroll up to eight infants between the ages of 1 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 0.6 mg/kg twice weekly, with the ability to increase the dose further 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. We expect to report interim data from the ENERGY 1 trial in the fourth quarter of 2024.

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.

We anticipate initiating the ENERGY 2 trial, an open label, single arm, pivotal trial of INZ-701 in infants with ENPP1 Deficiency, outside of the United States in the fourth quarter of 2024. 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 EMA on a Paediatric Investigational Plan for a pivotal trial of INZ-701 in pediatric patients with ENPP1 Deficiency. We have shared the design for a global pivotal clinical trial of INZ-701 in pediatric patients with ENPP1 Deficiency (the "ENERGY 3 trial"). The ENERGY 3 trial is a multicenter, randomized, open label trial expected to enroll up to 33 patients between the ages of one and less than 13 years across multiple 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 include a confirmed genetic diagnosis of ENPP1 Deficiency, radiographic evidence of skeletal abnormalities and low plasma PPi. Patients will be randomized in a 2:1 ratio to an INZ-701 arm or a control arm (conventional therapy, which is 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 PDCO. 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 (“RSS”), Growth Z-score and pharmacokinetics. Based on recommendations from the FDA, the primary endpoint of plasma PPi should be supported by consistent trends in appropriate secondary endpoints. Based on the agreed Paediatric Investigational Plan with PDCO, plasma PPi and RGI-C are co-primary endpoints, with a relaxed p-value of <0.2 for RGI-C.

In September 2023, we opened the first site for the ENERGY 3 trial. Patient recruitment is underway and we incurred a $0.5 million milestone payment following completion of dosing of the first patient in our pivotal clinical trial of INZ-701 in pediatric patients with ENPP1 Deficiency. We expect to complete enrollment by the end of 2024. We anticipate reporting topline data from the ENERGY 3 trial in early 2026. We also intend to treat ENPP1-deficient patients ineligible for ENERGY 3 or other ongoing studies to further our understanding of INZ-701’s safety and efficacy.

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 ongoing Phase 1/2 trial in adult patients with ENPP1 Deficiency, available results from our ongoing ENERGY 1 trial, available results from the planned pivotal ENERGY 2 trial in infants to be initiated 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 for infant and pediatric patients as early as the first half of 2027.

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 initially enrolled nine adult patients at sites in the United States and Europe. The trial is primarily assessing the safety and tolerability of INZ-701 in adult patients with ABCC6 Deficiency, as well as characterizing 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 increases plasma PPi levels for further clinical development. The open-label Phase 2 extension portion of the trial will assess long-term safety, pharmacokinetics, and pharmacodynamics of continued treatment with INZ-701 for up to 48 weeks, where patients may receive doses of INZ-701 at home depending on site-specific protocols. Exploratory endpoints will include 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. Eight patients remain in the trial, and seven self-administer INZ-701 treatment. Time on study ranged from 45 to over 631 days, and total time on treatment across all cohorts corresponds to approximately 12+ patient-years. INZ-701 exhibited a favorable immunogenicity profile with low titers of non-neutralizing ADAs observed in eight of 10 patients. The ADA levels were transient in three of eight patients. Plasma PPi levels observed after INZ-701 administration are shown in the table below:

The last patient’s last visit occurred in July 2024. All patients are currently in the extension period and in the process of rolling over to the ADAPT trial.

Subject to regulatory review and sufficient funding, we plan to initiate a pivotal clinical trial of INZ-701 in pediatric patients with ABCC6 Deficiency in 2025 for registrational purposes. Prior to initiating this pivotal clinical trial, we plan to engage with the regulatory authorities in the United States, Europe, and other jurisdictions to determine appropriate primary efficacy endpoints and other requirements for potential marketing approval. In particular, if we propose new or novel endpoints or methodologies for our clinical trials, regulatory authorities will ultimately need to conclude that the endpoints of our clinical trials have provided clinically meaningful results before we are able to obtain potential marketing approval. Results from the Phase 1/2 clinical trial have provided evidence of the restoration of plasma PPi levels and measures of clinical and physiological efficacy informed the design of our planned pivotal clinical trial. Our clinical strategy, subject to ongoing discussions with the regulatory authorities in the United States, Europe, and other jurisdictions, is to pursue registration of INZ-701 for ABCC6 Deficiency by linking the restoration of plasma PPi levels to measures of physiological and clinical efficacy in this patient population.

In February 2024, we initiated SEAPORT 1, a Phase 1 clinical trial designed to assess safety, tolerability, pharmacokinetics, and pharmacodynamics of INZ-701 in patients with ESKD receiving hemodialysis. Patients will receive 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 will assess 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 3 of the trial’s four-week dosing schedule. The largest changes occurred in patients with the lowest baseline PPi levels.

*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.

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 anti-drug antibodies ("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 adverse events.

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

Based on these results, we plan to initiate a pivotal trial of INZ-701 in patients with calciphylaxis in 2025, subject to regulatory review and sufficient funding.

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 for the potential treatment of their condition. 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 flat 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. ADAPT will initially open with sites in the United States and Europe and has begun enrolling patients who have completed a Phase 1/2 trial in adults with ENPP1 and ABCC6 Deficiencies.

In February 2023, we dosed our first pediatric patient with ENPP1 Deficiency with INZ-701 under our expanded access program. Under our expanded access 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.

Subject to successfully completing clinical development of INZ-701 in ENPP1 and ABCC6 Deficiencies, we plan to seek marketing approvals for INZ-701 on a worldwide basis. Beyond our development focus on INZ-701, we believe that our therapeutic approach has the potential to benefit patients suffering from additional diseases of pathologic mineralization and intimal proliferation.

Based on its mechanism of action, we believe that INZ-701 has the potential to increase plasma PPi levels and provide therapeutic benefit to patients beyond those with monogenic defects in the ENPP1 or ABCC6 gene. We intend to explore the potential of INZ-701 as a therapy in other diseases of pathologic mineralization associated with low levels of plasma PPi.

Diseases of intimal proliferation include diseases without a clear genetic basis. In preclinical studies, INZ-701 prevented intimal proliferation in both wild-type and Enpp1-deficient mice, which we believe is attributable to increased levels of adenosine. We plan to continue to explore the potential of INZ-701 in diseases in which arteries have been damaged or disrupted by insertion of a stent, bypass graft occlusion, transplant vasculopathy, or inflammation known as arteritis.

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.

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

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 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 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. 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. We expect that our research and development expenses will continue to increase substantially for the foreseeable future as we execute on our global development strategy, prepare for and conduct the ongoing and planned clinical trials of INZ-701, further scale our manufacturing processes, advance development of INZ-701 for additional indications, and potentially develop additional product candidates.

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. Additionally, we may experience an increase in payroll and expense as a result of our preparation for potential commercial operations, especially related to sales and marketing costs. We expect that our general and administrative expenses will increase in future periods as we expand our operations and execute on our global development strategy.

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 primarily consists of realized gains and losses on marketable securities and foreign exchange gains or losses.

The following table summarizes our results of operations for the three months ended September 30, 2024 and 2023 (in thousands):

The following table summarizes our research and development expense for the three months ended September 30, 2024 and 2023 (in thousands):

Research and development expense increased $6.5 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to a $5.7 million increase in INZ-701-related research and development expense and a $0.9 million increase in personnel related costs, including stock-based compensation expense and facilities and administrative expense.

INZ-701-related research and development expense increased $5.7 million primarily due to a $3.0 million increase in chemistry, manufacturing, and controls expense to support our ongoing clinical trials and prepare for potential commercialization and a $2.7 million increase in clinical development and related consulting costs to support our ongoing clinical trials.

General and administrative expense remained relatively consistent for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Interest income for the three months ended September 30, 2024 decreased approximately $0.6 million compared to the three months ended September 30, 2023 due to a lower cash balance on which we are earning interest in 2024.

Interest expense increased $0.5 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to borrowings under our Loan Agreement.

Other expense, net remained relatively consistent for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands):

The following table summarizes our research and development expense for the nine months ended September 30, 2024 and 2023 (in thousands):

Research and development expense increased $23.9 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to a $20.2 million increase in INZ-701-related research and development expense and a $3.7 million increase in personnel related costs, including stock-based compensation expense and facilities and administrative expense.

INZ-701-related research and development expense increased $20.2 million primarily due to a $9.3 million increase in chemistry, manufacturing, and controls expense to support our ongoing clinical trials and prepare for potential commercialization and a $10.9 million increase in clinical development and related consulting costs to support our ongoing clinical trials.

General and administrative expense remained relatively consistent for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Interest income for the nine months ended September 30, 2024 increased approximately $0.9 million compared to the nine months ended September 30, 2023 due to higher interest rates and a larger cash balance on which we are earning interest in 2024.

Interest expense increased $2.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to borrowings under our Loan Agreement.

Other expense, net remained relatively consistent for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

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 remaining shares of common stock under the Open Market Sale Agreement for an aggregate offering price of up to approximately $23.8 million. During the three and nine months ended September 30, 2024, we sold 2,083,668 shares of our common stock pursuant to the Open Market Sale Agreement for aggregate net proceeds of $10.4 million.

In April 2022, we closed an underwritten offering in which we sold 16,276,987 shares of common stock and pre-funded warrants to purchase 3,523,013 shares of common stock under the 2021 Registration Statement. Net proceeds from the offering were approximately $68.3 million, after deducting underwriting discounts and commissions and offering expenses.

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 September 30, 2024 and December 31, 2023 (in thousands):

The following table provides information regarding our cash flows for the nine months ended September 30, 2024 and 2023 (in thousands):

Net cash used in operating activities increased approximately $20.5 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to a $25.4 million increase in our net loss, adjusted for non-cash items, which was partially offset by approximately $4.9 million of changes in operating assets and liabilities.

Net cash provided by investing activities increased approximately $98.7 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to an $85.0 million decrease in purchases of marketable securities and a $13.7 million increase in maturities of marketable securities in the nine months ended September 30, 2024.

Net cash provided by financing activities decreased $102.3 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to year-over-year decreases of $27.5 million in net proceeds received from the issuance of long-term debt, $64.4 million related to the July 2023 equity offering, and $10.8 million from sales of common stock under our at-the-market facility, and an increase of $0.4 million from exercises of stock options.

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. We expect our expenses to increase substantially in connection with our ongoing and planned activities. In addition, 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. Accordingly, 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.

Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our operations and ability to take specific actions, such as incurring additional indebtedness, making acquisitions, engaging in acquisition, merger, or collaboration transactions, selling or licensing our assets, making capital expenditures, redeeming our stock,

making certain investments, or declaring dividends. The covenants under our Loan Agreement and the pledge of our assets as collateral limit our ability to take specific actions, including obtaining additional financing. If we raise additional funds through collaborations, strategic alliances, or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us.

Based on our current operating plan, we believe that our existing cash, cash equivalents, and short-term investments as of September 30, 2024 will 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. However, we have 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. 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 or 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.

During the three and nine months ended September 30, 2024, 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, 2023.

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 and nine months ended September 30, 2024, 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, 2023.

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.

We are exposed to market risk related to changes in interest rates. As of September 30, 2024, our cash equivalents consisted of short-term money market funds and U.S. government agency debt securities. As of September 30, 2024, our short-term investments consisted of U.S. Treasury securities and U.S. government agency debt securities. 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 September 30, 2024, 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 September 30, 2024 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 nine months ended September 30, 2024 and 2023.

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 September 30, 2024. 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 September 30, 2024, 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.

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.

In addition to all of the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10–K for the year ended December 31, 2023, 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, 2023 is qualified by the information that is described in this Quarterly Report on Form 10-Q. The risks described in our Annual Report on Form 10–K for the year ended December 31, 2023 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.

We did not issue any securities that were not registered under the Securities Act of 1933, as amended during the three months ended September 30, 2024.

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 September 30, 2024.

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.


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)


		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	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29
PART II.	OTHER INFORMATION	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
Signatures		32


	September 30, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	24,575		$	34,588
Short-term investments		107,033			154,001
Prepaid expenses and other current assets		9,329			7,661
Total current assets		140,937			196,250
Property and equipment, net		945			1,466
Right-of-use assets		710			1,126
Restricted cash		311			311
Prepaid expenses, net of current portion		458			1,694
Total assets	$	143,361		$	200,847
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,210		$	1,166
Accrued expenses		11,571			12,610
Operating lease liabilities		985			910
Current portion of long-term debt		3,578			—
Total current liabilities		18,344			14,686
Operating lease liabilities, net of current portion		164			913
Long-term debt, net		42,065			44,769
Total liabilities		60,573			60,368
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred Stock, $0.0001 par value – 5,000,000 shares authorized at September 30, 2024 and December 31, 2023; no shares issued and outstanding at September 30, 2024 or December 31, 2023		—			—
Common Stock, $0.0001 par value – 200,000,000 shares authorized at September 30, 2024 and December 31, 2023; 64,179,095 shares issued and outstanding at September 30, 2024 and 61,768,771 shares issued and outstanding at December 31, 2023		6			6
Additional paid in-capital		443,476			426,362
Accumulated other comprehensive income		186			41
Accumulated deficit		(360,880	)		(285,930	)
Total stockholders’ equity		82,788			140,479
Total liabilities and stockholders’ equity	$	143,361		$	200,847


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Operating expenses:
Research and development	$	19,890		$	13,341		$	60,758		$	36,864
General and administrative		4,961			4,733			16,101			15,973
Total operating expenses		24,851			18,074			76,859			52,837
Loss from operations		(24,851	)		(18,074	)		(76,859	)		(52,837	)
Other income (expense):
Interest income		1,778			2,369			6,182			5,306
Interest expense		(1,416	)		(953	)		(4,136	)		(2,052	)
Other (expense) income, net		(81	)		20			(137	)		(42	)
Other income, net		281			1,436			1,909			3,212
Net loss	$	(24,570	)	$	(16,638	)	$	(74,950	)	$	(49,625	)
Other comprehensive income (loss):
Unrealized gains on available-for-sale securities		290			53			137			279
Foreign currency translation adjustment		(1	)		(182	)		8			(152	)
Total other comprehensive income (loss)		289			(129	)		145			127
Comprehensive loss	$	(24,281	)	$	(16,767	)	$	(74,805	)	$	(49,498	)
Net loss attributable to common stockholders—basic and diluted	$	(24,570	)	$	(16,638	)	$	(74,950	)	$	(49,625	)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.39	)	$	(0.29	)	$	(1.20	)	$	(1.02	)
Weighted-average common shares and pre-funded warrants outstanding—basic and diluted		63,276,851			56,758,395			62,334,482			48,494,175


	Nine Months Ended September 30,
	2024			2023
Operating activities
Net loss	$	(74,950	)	$	(49,625	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		565			624
Stock-based compensation expense		5,974			5,364
Amortization of premiums and discounts on marketable securities		(4,497	)		(3,334	)
Reduction in the carrying value of right-of-use assets		416			364
Non-cash interest expense and amortization of debt issuance costs		874			426
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(1,668	)		(4,887	)
Accounts payable		1,044			(535	)
Accrued expenses		(1,039	)		(1,972	)
Operating lease liabilities		(674	)		(604	)
Prepaid expenses, net of current portion		1,236			2,115
Other long-term liabilities		—			(124	)
Net cash used in operating activities		(72,719	)		(52,188	)
Investing activities
Purchases of marketable securities		(126,498	)		(211,465	)
Maturities of marketable securities		178,101			164,482
Purchases of property and equipment		(45	)		(193	)
Net cash provided by (used in) investing activities		51,558			(47,176	)
Financing activities
Net proceeds from issuance of long-term debt		—			27,500
Proceeds from issuance of common stock		10,440			85,649
Proceeds from exercise of stock options		552			98
Proceeds from issuance of common stock for cash under Employee Stock Purchase Plan		148			206
Net cash provided by financing activities		11,140			113,453
Net (decrease) increase in cash, cash equivalents, and restricted cash		(10,021	)		14,089
Effect of foreign currency exchange rate on cash		8			(152	)
Cash, cash equivalents, and restricted cash at beginning of period		34,899			33,269
Cash, cash equivalents, and restricted cash at end of period	$	24,886		$	47,206
Supplemental cash flow information:
Cash and cash equivalents	$	24,575		$	46,895
Restricted cash		311			311
Cash, cash equivalents, and restricted cash at end of period	$	24,886		$	47,206
Property and equipment unpaid at end of period	$	—		$	3


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


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


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’ Equity
	Shares		Amount		Capital		(Loss) Income			Deficit			(Deficit)
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 stock options		3,206		—		11		—			—			11
Shares purchased in Employee Stock Purchase Plan		44,532		—		148		—			—			148
Comprehensive loss:
Unrealized loss 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

Stock-based compensation		—		—		2,157		—			—			2,157
Exercise of stock options and RSU vesting		255,456		—		458		—			—			458
Comprehensive loss:
Unrealized gain on investments		—		—		—		3			—			3
Foreign currency translation adjustment		—		—		—		(1	)		—			(1	)
Net loss		—		—		—		—			(27,033	)		(27,033	)
Balance at June 30, 2024		62,071,965	$	6	$	430,827	$	(103	)	$	(336,310	)	$	94,420

Stock-based compensation		—		—		2,126		—			—			2,126
Exercise of stock options and RSU vesting		23,462		—		83		—			—			83
Shares issued in at-the-market offering		2,083,668		—		10,440		—			—			10,440
Comprehensive loss:
Unrealized gain on investments		—		—		—		290			—			290
Foreign currency translation adjustment		—		—		—		(1	)		—			(1	)
Net loss		—		—		—		—			(24,570	)		(24,570	)
Balance at September 30, 2024		64,179,095	$	6	$	443,476	$	186		$	(360,880	)	$	82,788


			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	1229±87	1438±146		1220±87
	2x/Week Dose	Day 11-32	1494±111	1745±170		1352±71
Phase 2	2x/Week Dose	Day 32-672	1118±93	1316±116		1598±322


Timepoint	Mean PPi (nM) ± SEM (n=8)
Baseline-Day 3 pre-dose*	619±74
Day 10 pre-dose	931±255
Day 17 pre-dose	1498±224
Day 24 pre-dose	1551±270


	Three Months Ended September 30,
	2024			2023			Change
Operating expenses:
Research and development	$	19,890		$	13,341		$	6,549
General and administrative		4,961			4,733			228
Total operating expenses		24,851			18,074			6,777
Loss from operations		(24,851	)		(18,074	)		(6,777	)
Other income (expense):
Interest income		1,778			2,369			(591	)
Interest expense		(1,416	)		(953	)		(463	)
Other (expense) income, net		(81	)		20			(101	)
Other income, net		281			1,436			(1,155	)
Net loss	$	(24,570	)	$	(16,638	)	$	(7,932	)


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).


	INOZYME PHARMA, INC.

Date: November 5, 2024	By:	/s/ Douglas A. Treco
		Douglas A. Treco
		Chief Executive Officer (Principal Executive Officer)

Date: November 5, 2024	By:	/s/ Sanjay S. Subramanian
		Sanjay S. Subramanian
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)