Risk Factors Update Summary

• AVROBIO may spend several years completing development of product candidates, potentially delaying commercialization.
• Implemented reductions in force significantly reduced workforce between July 2023 and February 2024.
• AVROBIO anticipates sole source suppliers may delay, suspend, or terminate supply for various reasons.
• If AVROBIO does not achieve milestones in the CVR Agreement, CVRs will expire valueless.
• Ownership concentration increased from 32% to 37.8%, impacting control and decision-making.
• The exchange ratio for the merger is based on AVROBIO's net cash at closing, potentially affecting ownership percentages.
• Implemented a reduction in force by approximately 50% and further reduced workforce by 11, 3, and 5 employees.
• AVROBIO obtained a license or until such patent expires. Parties making claims against AVROBIO may obtain injunctive or other equitable relief, which could effectively block AVROBIO’s ability to further develop and commercialize one or more of AVROBIO’s product candidates. Defense of these claims may be a substantial diversion of employee resources from AVROBIO’s business. In the event of a successful claim of infringement against AVROBIO, AVROBIO may have to pay substantial damages, including for willful infringement, pay royalties, redesign AVROBIO’s infringing products or obtain one or more licenses. The absence of a finding of infringement against AVROBIO could materially adversely affect AVROBIO’s business, results of operations, and financial condition.
• AVROBIO’s rights to develop and commercialize its product candidates, should AVROBIO resume development of its product candidates, are subject, in part, to the terms and conditions of licenses granted to AVROBIO by others. AVROBIO depends upon the intellectual property rights granted to AVROBIO under licenses from third parties that are important or necessary to the development of AVROBIO’s technology and products, including technology related to AVROBIO’s manufacturing process and AVROBIO’s gene therapy product candidates. In particular, AVROBIO had in-licensed certain intellectual property rights and know-how from the University Health Network and affiliates of Lund University. Any termination of AVROBIO’s remaining licenses could result in the loss of significant rights and could harm or prevent AVROBIO’s ability to commercialize its product candidates, should AVROBIO resume development of such product candidates.
• AVROBIO may pursue dissolution if the merger is not successful, impacting cash distribution.
• AVROBIO faces significant competition in the industry, with uncertainties in achieving market acceptance.
• Compliance costs rose due to no longer being an emerging growth company, impacting financials.
• Potential ownership changes could limit the use of net operating loss carryforwards of $340.575 million.
• AVROBIO halted further development of programs, reducing research and development expenses.
• AVROBIO may not realize anticipated benefits, savings, and improvements in cost structure from restructuring efforts.
• AVROBIO may pay Tectonic a termination fee of $2,712,500 if the Merger Agreement is terminated.
• AVROBIO faces pricing pressures and uncertainties in reimbursement for product candidates, impacting revenue generation.
• AVROBIO depends on a limited number of suppliers, risking disruptions in supply and potential delays.
• AVROBIO has dosed 11 patients using the plato platform, including 6 in the FAB-GT clinical trial.
• AVROBIO stockholders may receive less value if the market price of AVROBIO common stock declines.
• Increased master product liability insurance from $313.657 million to $340.575 million.
• AVROBIO's success relies on retaining key personnel, with the loss of key employees potentially impacting objectives.
• AVROBIO relies on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that AVROBIO elects not to patent, processes for which patents are difficult to enforce, and any other elements of AVROBIO’s product candidate discovery and development processes that involve. AVROBIO seeks to protect its proprietary technology and processes, in part, by entering into confidentiality agreements with AVROBIO’s employees, consultants, scientific advisors, and contractors. AVROBIO cannot guarantee that AVROBIO has entered into such agreements with each party that may have or have had access to AVROBIO’s trade secrets or proprietary technology and processes.
• AVROBIO's ability to commercialize product candidates depends on establishing sales, distribution, and marketing agreements.
• AVROBIO reduced workforce significantly to conserve capital, now with only 13 employees.
• AVROBIO's reliance on third parties for manufacturing may lead to delays or interruptions in development.
• AVROBIO sold its cystinosis gene therapy program for $87.5 million, closing the transaction.
• Regained compliance with Nasdaq's Minimum Bid Price Requirement at $1.00 per share.
• AVROBIO has resumed data collection and dosing of new patients after halting development programs in July 2023.
• AVROBIO may need substantial additional funding for operations, impacting future viability.
• AVROBIO incurred net losses of $12.2 million in 2023, an improvement from $(105.9) million in 2022.
• Expanded insurance coverage to include commercial products, anticipating future marketing approval.
• AVROBIO and Tectonic directors' interests in the merger may differ from stockholders', potentially influencing decisions.
• AVROBIO has transitioned to a new conditioning regimen utilizing busulfan instead of melphalan.
• The reverse stock split may not sustainably increase AVROBIO's stock price, affecting market capitalization.
• Intellectual property infringement risks may impact development and commercialization efforts, particularly with lentiviral vectors.
• Compliance with environmental, health, and safety laws could result in fines or penalties.
• AVROBIO has halted enrollment in the Fabry program and sold the cystinosis program to Novartis.
• Failure to complete the merger could lead to significant fees and expenses for AVROBIO and Tectonic.
• Failure to comply with data protection laws could lead to substantial penalties and reputational harm.
• AVROBIO stockholders may not receive any payment on the Contingent Value Rights (CVRs) if no proceeds are received.
• AVROBIO has deprioritized the Fabry program due to several factors, including variable engraftment data.