8Royalty Financing Agreement

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In May 2023, the Company entered into a royalty purchase agreement (the “Royalty Financing Agreement”) with HemB SPV, L.P. (the “Purchaser”). Under the terms of the Royalty Financing Agreement, the Company received an upfront payment of $375.0 million in exchange for its rights to the lowest royalty tier on CSL Behring LLC’s (“CSL Behring”) worldwide net sales of etranacogene dezaparvovec-drlb (HEMGENIX®) for certain current and future royalties due to the Company. The Company will be obligated to pay $25.0 million of the first worldwide sales milestone payment from CSL Behring, if received, to the Purchaser.

The Purchaser will receive 1.85 times the upfront payment (or $693.8 million) until June 30, 2032 (“First Hard Cap Date”) if such thresholds are met or, if such cap is not met by June 30, 2032, up to 2.25 times the upfront payment through December 31, 2038 (“Second Hard Cap Date”). If, on or prior to the defined dates for each cap amount, the total amount of royalty payments received by the Purchaser equals or exceeds the cap amount applicable to such date, the Royalty Financing Agreement will automatically terminate and all rights to the HEMGENIX® royalty payments will revert back to the Company. The Company has no obligation to repay any amounts received from the Purchaser in the event that the applicable cap amount is not reached during the term of the Royalty Financing Agreement.

The Company has retained the rights to all other royalties, as well as contractual milestones totaling up to $1.3 billion, under the terms of the commercialization and license agreement with CSL Behring (the “CSL Behring Agreement”).

Net proceeds from the Royalty Financing Agreement were $370.1 million. The Company initially recorded these net proceeds as Liability from royalty financing agreement at their fair market value on its Consolidated Balance Sheet as of the date the transaction closed on June 5, 2023. Following the initial recognition, the Company records the debt at amortized cost.

As of September 30, 2025 the Company expects to satisfy its commitment to the Purchaser prior to the Second Hard Cap Date. The Company records the difference of $473.7 million between the total expected payments of $843.8 million to the Purchaser and the $370.1 million net proceeds as interest expense over the term using the effective interest rate method. The Company determined the effective interest rate based on the projected cash flows up to the Second Hard Cap Date. As of September 30, 2025 the effective interest rate is expected to be within a range of 10.5% to 12.0% per annum, compared to a range of 12.0% to 13.5% per annum as of September 30, 2024. The Company would have recorded the following amounts of interest expense if it had used the effective interest rate at the lower and upper end of this range:

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The Company prospectively updates the effective interest rate at each reporting date based on updated cash flow projections.

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The following table presents the movement in the liability related to the Royalty Financing Agreement  between December 31, 2024 and September 30, 2025:

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