Lexeo Therapeutics, Inc. (LXEO)

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

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Please also see the section titled “Special Note Regarding Forward Looking Statements.” Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us” and “our” refer to Lexeo Therapeutics, Inc.

Overview

We are a clinical stage genetic medicine company dedicated to reshaping heart health by applying pioneering science to fundamentally change how cardiovascular diseases are treated. We are advancing a portfolio of therapeutic candidates that take aim at the underlying genetic causes of conditions, including Friedreich ataxia, or FA, cardiomyopathy, plakophilin-2, or PKP2, arrhythmogenic cardiomyopathy, or ACM, and other devastating diseases with high unmet need.

LX2006 for the treatment of FA cardiomyopathy

Our most advanced cardiovascular product candidate is LX2006 for the treatment of FA cardiomyopathy.

Interim Clinical Data Updates

In October 2025, we provided an interim clinical update, which included baseline characteristics and safety data from the 17 treated participants across the two studies, and clinical efficacy data from the 16 participants who had reached at least six months follow-up as of that time. A summary of key observations from the October 2025 interim update is set forth below.

•
Improvements in LVMI among participants with abnormal baseline LVMI (n=6). Five of six participants achieved 10% by 12-month visit or sooner and six of six participants achieved LVMI measurements within the normal range as of latest visit. An 18% mean improvement in LVMI was observed at 6-month visit and a 23% mean improvement in LVMI was observed at 12-month visit, exceeding 10% FDA-aligned threshold for pivotal study. In the mid- and high-dose cohorts (n=3), a 28% mean improvement in LVMI was observed at 6-month visit and a 33% mean improvement in LVMI was observed at 12-month visit, suggesting dose-dependent improvement. Among participants with normal baseline LVMI (n=10), the majority demonstrated LVMI improvement or stabilization over time.

•
Improvements in secondary cardiac biomarkers. Fourteen of sixteen participants achieved 25% reduction in high-sensitivity troponin I from baseline at latest visit. Fourteen of sixteen participants achieved reduction or stabilization in LWT from baseline at latest visit.

•
Improvements in mFARS as demonstrated by a 2.0-point mean improvement from baseline at latest visit across all participants. Eleven of sixteen participants achieved reduction or stabilization in mFARS from baseline at latest visit.

•
Previously reported data in April 2025 from ongoing SUNRISE-FA trial (n=8) showed that all study participants achieved increases in frataxin protein expression from baseline at 3-month visit, with dose-dependent increases observed across cohorts.

In March 2026, we shared updated interim clinical data for LX2006 at the American College of Cardiology, or ACC, Annual Meeting. Phase 1/2 interim clinical data presented at the ACC Annual Meeting continue to show sustained or deepening improvements across both cardiac and neurologic measures of FA, including statistically significant improvement in mean mFARS scores for LX2006-treated participants compared to a propensity-matched control cohort from the UNIFAI natural history study.

Treatment with LX2006 has been generally well tolerated with no Grade 3 treatment-related SAEs to date, no clinically significant complement activation, minimal, transient liver function test, or LFT, elevations, and no signs of frataxin over-expression observed in cardiac tissue. One previously disclosed, possibly treatment-related Grade 2 event of asymptomatic myocarditis observed one year after dosing. No participants discontinued from either study.

Regulatory Alignment

In July 2025, we announced Breakthrough Therapy designation based on interim clinical data from Phase 1/2 trials showing clinically meaningful improvements in cardiac biomarkers and functional measures. We also announced that LX2006 was selected for the Chemistry, Manufacturing, and Controls Development and Readiness Pilot, or CDRP, Program, created to facilitate chemistry, manufacturing and controls, or CMC, registrational readiness and support faster patient access.

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In February 2026, we submitted the final registrational trial design and statistical analysis plan, or SAP, for the SUNRISE‑FA 2 pivotal study to the FDA following a Type B meeting. In June 2026, we announced that we have finalized the SUNRISE-FA 2 pivotal study protocol and SAP for LX2006, each incorporating the FDA's feedback to date and intended to support a BLA submission to the FDA in the first half of 2028 under the accelerated approval pathway. The SUNRISE-FA 2 study was initiated in June 2026. We are continuing to engage with the FDA regarding the confirmatory evidence strategy for the SUNRISE-FA 2 study.

LX2020 for the treatment of arrhythmogenic cardiomyopathy

Our second most advanced cardiovascular product candidate, LX2020 for the treatment of ACM caused by mutations in the PKP2 gene, referred to as PKP2-ACM, is currently being evaluated in HEROIC-PKP2, an ongoing Phase 1/2 clinical trial.

Interim Clinical Data Updates

In January 2026, we provided an interim clinical data update, which included baseline characteristics and safety data from the ten participants dosed, including three participants in cohort 1 at the low dose and seven participants in cohorts 2 and 3 at the high dose. Clinical efficacy data were inclusive of those participants with at least 6 months of follow-up (n=8). A summary of key observations from the January 2026 interim update is set forth below.

•
Arrhythmia burden stabilized or improved in majority of participants with dose-dependent response in non-sustained ventricular tachycardia, or NSVT, and premature ventricular contractions, or PVCs. NSVT reduced or stabilized in the majority of participants, with a 22% mean improvement in high-dose cohorts at latest visit (n=5). PVCs reduced or stabilized in the majority of participants, with a 14% mean improvement in high-dose cohorts at latest visit.

•
Four of five participants in high-dose cohorts report improvement relative to baseline on the Patient Global Impression of Change, or PGIC, scale, a patient-reported outcome measure.

•
Participants stable across other clinical measures including QRS duration, T-wave inversion, right ventricular ejection fraction, or RVEF, and New York Heart Association, or NYHA, Class.

•
Increases in PKP2 protein expression versus baseline at three months in all participants that had undergone cardiac biopsies (n=7) assessed by western blot. Dose-dependent increases observed, with mean increase of 90% (previously reported 93% due to a calibration error) in the low-dose cohort (n=2) and 162% mean increase in the high-dose cohorts (n=5).

Across all participants dosed, LX2020 has been generally well-tolerated to date with no clinically significant complement activation.

In August 2026, we announced that we received Regenerative Medicine Advanced Therapy, or RMAT, designation for LX2020 for the treatment of PKP2-ACM from the FDA based on recent interim data from our ongoing Phase I/II clinical trial in PKP2-ACM. RMAT designation provides opportunities for increased FDA interaction and may help expedite the development of LX2020.

Each of our gene therapy candidates utilizes the vector construct, dose and route of administration that we believe will result in the most favorable biodistribution and safety profile for our product candidate for each disease. Our most advanced programs use the AAVrh10 vector due to its high transduction efficiency in myocardial cells, potential for lower toxicity given the opportunity to utilize lower doses compared to other well-established AAV serotypes, and low pre-existing immunity.

Current and Future Capital Requirements

To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock, common stock, and pre-funded warrants and warrants to purchase our common stock. As of June 30, 2026, we had $234.2 million of cash, cash equivalents, and investments in U.S. Treasury securities, and in July 2026, we sold 3,109,103 shares of our common stock under the ATM Program for net proceeds of approximately $14.1 million after transaction costs. We have incurred significant operating losses since the commencement of our operations. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current gene therapy candidates or any future gene therapy candidates. Our net losses for the six months ended June 30, 2026 and the year ended December 31, 2025 were $46.1 million and $100.0 million, respectively, and our accumulated deficit was $426.2 million at June 30, 2026. We expect to continue to incur significant losses for the foreseeable future as we advance our current and future product candidates through preclinical and clinical development, continue to build our operations and operate as a public company.

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We expect to continue to incur net operating losses for at least the next several years, and we expect our research and development expenses, general and administrative expenses, and capital expenditures to continue to increase. We expect our expenses and capital requirements will increase significantly in connection with our ongoing activities as we:

•
continue our ongoing and planned clinical trials as well as research and development of our FA cardiomyopathy (LX2006) and arrhythmogenic cardiomyopathy caused by mutations in the PKP2 gene, or PKP2-ACM (LX2020) programs and other product candidates;

•
initiate preclinical studies and clinical trials for any additional product candidates that we may pursue in the future;

•
seek to discover and develop additional product candidates and further expand our clinical product pipeline;

•
seek regulatory approvals for any product candidates that successfully complete clinical trials;

•
invest in capital equipment in order to expand our research and development and manufacturing activities;

•
attract, hire and retain additional clinical, scientific, quality control, regulatory, and manufacturing management and administrative personnel;

•
add clinical, operational, financial and management information systems and personnel, including personnel to support our product development;

•
develop, maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets and know-how;

•
acquire or in-license other product candidates and technologies;

•
expand our operations in the United States and to other geographies;

•
incur additional legal, accounting, investor relations and other general and administrative expenses associated with operating as a public company; and

•
establish a sales, marketing and distribution infrastructure, either ourselves or in partnership with others, to commercialize any product candidates, if approved, and related additional commercial manufacturing costs.

Components of our results of operations

Revenue

To date, we have not generated any revenue from product sales. If our development efforts for LX2006 and LX2020, or any future product candidates, are success

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with the financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in “Item 1A. Risk Factors” and in other parts of this Annual Report on Form 10-K.

Overview

We are a clinical stage genetic medicine company dedicated to reshaping heart health by applying pioneering science to fundamentally change how cardiovascular diseases are treated. We are advancing a portfolio of therapeutic candidates that take aim at the underlying genetic causes of conditions, including FA cardiomyopathy, plakophilin-2, or PKP2, arrhythmogenic cardiomyopathy, or ACM, and other devastating diseases with high unmet need.

LX2006 for the treatment of FA cardiomyopathy

Our most advanced cardiovascular product candidate, LX2006 for the treatment of FA cardiomyopathy, is currently being evaluated in SUNRISE-FA, our ongoing Phase 1/2 clinical trial and in a Cornell investigator-initiated trial.

Interim Clinical Data Updates

In October 2025, we provided an interim clinical update, which included baseline characteristics and safety data from the 17 treated participants across the two studies, and clinical efficacy data from the 16 participants who had reached at least six months follow-up as of that time. A summary of key observations from the October 2025 interim update is set forth below.

•
Improvements in LVMI among participants with abnormal baseline LVMI (n=6). Five of six participants achieved 10% by 12-month visit or sooner and six of six participants achieved LVMI measurements within the normal range as of latest visit. A 18% mean improvement in LVMI was observed at 6-month visit and a 23% mean improvement in LVMI was observed at 12-month visit, exceeding 10% FDA-aligned threshold for pivotal study. In the mid- and high-dose cohorts (n=3), a 28% mean improvement in LVMI was observed at 6-month visit and a 33% mean improvement in LVMI was observed at 12-month visit, suggesting dose-dependent improvement. Among participants with normal baseline LVMI (n=10), the majority demonstrated LVMI improvement or stabilization over time.

•
Improvements in secondary cardiac biomarkers. Fourteen of sixteen participants achieved 25% reduction in high-sensitivity troponin I from baseline at latest visit. Fourteen of sixteen participants achieved reduction or stabilization in LWT from baseline at latest visit.

•
Improvements in mFARS as demonstrated by a 2.0-point mean improvement from baseline at latest visit across all participants. Eleven of sixteen participants achieved reduction or stabilization in mFARS from baseline at latest visit.

•
Previously reported data in April 2025 from ongoing SUNRISE-FA trial (n=8) showed that all study participants achieved increases in frataxin protein expression from baseline at 3-month visit, with dose-dependent increases observed across cohorts.

Based on the data observed as of the October 2025 update, LX2006 remained generally well tolerated with no Grade 3+ SAEs and no signs of complement activation or other immunogenicity.

Regulatory Alignment

In February 2025, we announced further alignment on elements of the accelerated development pathway following a Type B RMAT meeting with the FDA including frataxin expression co-primary endpoint to be evaluated for any increase from baseline rather than numerical threshold.

In July 2025, we announced Breakthrough Therapy designation based on interim clinical data from Phase 1/2 trials showing clinically meaningful improvements in cardiac biomarkers and functional measures. We also announced that LX2006 was selected for the CDRP Program, created to facilitate CMC registrational readiness and support faster patient access.

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In October 2025, in response to our questions regarding the possibility of a faster path to BLA, the FDA indicated openness to a BLA submission for accelerated approval that includes clinical data from the ongoing Phase 1/2 studies of LX2006 pooled with new clinical data to be generated in the planned pivotal study. The FDA also previously agreed to evaluate the co-primary endpoint of LVMI at a time point earlier than 12 months. Collectively, we believe this regulatory feedback has the potential to reduce the size and length of the planned pivotal study, possibly accelerating the overall timeline to BLA submission. We plan to initiate the LX2006 pivotal study in the first half of 2026, pending finalization of the trial protocol.

LX2020 for the treatment of arrhythmogenic cardiomyopathy

Our second most advanced cardiovascular product candidate, LX2020 for the treatment of arrhythmogenic cardiomyopathy, or ACM, caused by mutations in the PKP2 gene, referred to as PKP2-ACM, is currently being evaluated in HEROIC-PKP2, an ongoing Phase 1/2 clinical trial.

Interim Clinical Data Updates

In October 2025, we provided an interim clinical data update for the three participants dosed in cohort 1 (n=2 at 12-month visit; n=1 at 9-month visit), assessing multiple cardiac parameters at latest visit relative to baseline. A summary of key observations from the October 2025 interim update is set forth below.

•
Premature ventricular contractions, or PVCs, were reduced in one of three participants and non-sustained ventricular tachycardia, or NSVT, was reduced or stable in two of three participants.

•
QRS duration was normalized or stable in two of three participants and T-wave inversions were reduced in two of three participants.

•
Left ventricular ejection fraction, or LVEF, and right ventricular ejection fraction, or RVEF, were stable in three of three participants.

In January 2026, we provided an interim clinical data update, which included baseline characteristics and safety data from the ten participants dosed, including three participants in cohort 1 at the low dose and seven participants in cohorts 2 and 3 at the high dose. Clinical efficacy data were inclusive of those participants with at least 6 months of follow-up (n=8). A summary of key observations from the January 2026 interim update is set forth below.

•
Arrhythmia burden stabilized or improved in majority of participants with dose-dependent response in NSVT and PVCs. NSVT reduced or stabilized in the majority of participants, with a 22% mean improvement in high-dose cohorts at latest visit (n=5). PVCs reduced or stabilized in the majority of participants, with a 14% mean improvement in high-dose cohorts at latest visit.

•
Four of five participants in high-dose cohorts report improvement relative to baseline on the PGIC scale, a patient-reported outcome measure.

•
Participants stable across other clinical measures including QRS duration, T-wave inversion, RVEF and NYHA Class.

•
Increases in PKP2 protein expression versus baseline at three months in all participants that had undergone cardiac biopsies (n=7) assessed by western blot. Dose-dependent increases observed, with mean increase of 93% in the low-dose cohort (n=2) and 162% mean increase in the high-dose cohorts (n=5).

Based on the data observed as of the October 2025 and January 2026 readouts, LX2020 remained generally well tolerated with no clinically significant complement activation.

Each of our gene therapy candidates utilizes the vector construct, dose and route of administration that we believe will result in the most favorable biodistribution and safety profile for our product candidate for each disease. Our most advanced programs use the AAVrh10 vector due to its high transduction efficiency in myocardial cells, potential for lower toxicity given the opportunity to utilize lower doses compared to other well-established AAV serotypes, and low pre-existing immunity.

Current and Future Capital Requirements

To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock, common stock, and pre-funded warrants and warrants to purchase our common stock, including from our October 2025 Financing Transactions, May 2025 Private Placement, March 2024 Private Placement, IPO and the subsequent partial exercise of the underwriters’ 30-day option to purchase additional shares of common stock. As of December 31, 2025, we had $246.6 million of cash, cash equivalents, and investments in U.S. Treasury securities. We have incurred significant operating losses since the commencement of our operations. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and

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eventual commercialization of one or more of our current gene therapy candidates or any future gene therapy candidates. Our net losses for the years ended December 31, 2025 and December 31, 2024 were $100.0 million and $98.3 million, respectively, and our accumulated deficit was $380.1 million at December 31, 2025. We expect to continue to incur significant losses for the foreseeable future as we advance our current and future product candidates through preclinical and clinical development, continue to build our operations and operate as a public company.

We expect to continue to incur net operating losses for at least the next several years, and we expect our research and development expenses, general and administrative expenses, and capital expenditures to continue to increase. We expect our expenses and capital requirements will increase significantly in connection with our ongoing activities as we:

•
continue our ongoing and planned clinical trials as well as research and development of our FA cardiomyopathy (LX2006) and arrhythmogenic cardiomyopathy caused by mutations in the PKP2 gene, or PKP2-ACM (LX2020) programs and other product candidates;

•
initiate preclinical studies and clinical trials for any additional product candidates that we may pursue in the future;

•
seek to discover and develop additional product candidates and further expand our clinical product pipeline;

•
seek regulatory approvals for any product candidates that successfully complete clinical trials;

•
invest in capital equipment in order to expand our research and development and manufacturing activities;

•
attract, hire and retain additional clinical, scientific, quality control, regulatory, and manufacturing management and administrative personnel;

•
add clinical, operational, financial and management information systems and personnel, including personnel to support our product development;

•
develop, maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets and know-how;

•
acquire or in-license other product candidates and technologies;

•
expand our operations in the United States and to other geographies;

•
incur additional legal, accounting, investor relations and other general and administrative expenses associated with operating as a public company; and

•
establish a sales, marketing and distribution infrastructure, either ourselves or in partnership with others, to commercialize any product candidates, if approved, and related additional commercial manufacturing costs.

Components of our results of operations

Revenue

To date, we have not generated any revenue from product sales. If our development efforts for LX2006 and LX2020, or any future product candidates, are successful and result in regulatory approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from product sales, royalties or payments from such collaboration or license agreements, or a combination of product

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]