Breaking Down Passage Bio, Inc. (PASG) Financial Health: Key Insights for Investors

You're looking at a clinical-stage biotech like Passage Bio, Inc. and asking the right question: is the cash runway long enough to hit the next clinical inflection point? The good news is their recent Q3 2025 financial results, reported on November 10, 2025, show a defintely tighter ship. They beat the consensus EPS estimate, posting a net loss of only $7.7 million for the quarter, a sharp reduction from the $19.3 million loss in the same period last year. This cost control, driven by reduced Research and Development (R&D) and General and Administrative (G&A) expenses, is critical because, as a pre-commercial company, their 2025 revenue forecast is still $0. But here's the key action item: the company reported a cash, cash equivalents, and marketable securities balance of $52.8 million as of September 30, 2025, which management expects will fund operations into 1Q 2027. That runway gives them the breathing room to advance their lead gene therapy candidate, PBFT02, for frontotemporal dementia (FTD-GRN) and engage the FDA on a registrational trial design in the first half of 2026-a massive catalyst you need to map against that cash burn rate.

Revenue Analysis

You're looking at Passage Bio, Inc. (PASG) and wondering where the money comes from. The direct takeaway is this: as a clinical-stage genetic medicines company, Passage Bio currently reports $0.00 in annual product revenue for the 2025 fiscal year, which is typical for a biotech focused on clinical trials. Your focus should instead be on their non-product income and deferred revenue, which signal the company's strategic financial health.

The company's revenue model is entirely tied to its research and development (R&D) activities, not commercial product sales. This means you won't see traditional revenue growth rates. The trailing twelve months ending June 30, 2025, showed $0.00 in revenue, which translates to a non-applicable (N/A) year-over-year growth rate for product sales, but that's not the whole story. The real 'revenue streams' come from strategic partnerships and financial instruments.

To understand their model, look at the historical breakdown of their non-product revenue. For example, in a prior period (2023), the company's revenue was generated by three key segments, which is the standard playbook for a pre-commercial biotech:

• Research Programs: $14.62 million (62.4% of total revenue)
• Licensing Agreements: $5.87 million (25.1% of total revenue)
• Collaborative Research: $3.11 million (13.5% of total revenue)

That's the quick math on how they generate non-product income when they have active agreements. Still, the current financial picture for 2025 shows a significant shift, which is a key action item for your analysis. The most notable change is the non-refundable sublicense and transition services payments related to its Gemma Biotherapeutics agreements.

As of the Q3 2025 filing (September 30, 2025), Passage Bio recorded $13.8 million in payments collected from the Gemma agreements, but this is accounted for as a current liability-deferred revenue-on the balance sheet because the revenue recognition criteria have not yet been met. This means the money is in hand, but it can't be recognized on the income statement until the company fulfills its obligations under the agreement. This is a critical distinction for a clinical-stage company; cash in the bank is what matters most. Plus, the company reported $906 thousand in 'Other income (expense), net' for the quarter ended September 30, 2025, which includes interest on their cash reserves and sublease income.

Here's a snapshot of the key financial components related to revenue in 2025:

What this estimate hides is the potential future revenue from their lead programs like PBFT02 for FTD-GRN. The company is actively enrolling patients in the upliFT-D study and is on track to obtain regulatory feedback on a registrational trial design in the first half of 2026. That's the real long-term revenue opportunity. For a deeper dive into who is betting on this pipeline, you should be Exploring Passage Bio, Inc. (PASG) Investor Profile: Who's Buying and Why?

Profitability Metrics

You're looking at Passage Bio, Inc. (PASG)'s profitability, and the direct takeaway is that as a clinical-stage genetic medicines company, its current financial health is defined by zero revenue and significant losses. This is defintely the norm for the sector, but the key is tracking the burn rate and operational efficiency.

For the trailing twelve months (TTM) ending in late 2025, Passage Bio, Inc. reported an Operating Loss of approximately -$47.08 million and a Net Loss of about -$45.26 million. The most recent quarter, Q3 2025, showed a Net Loss of $7.7 million. This means all their profitability margins-Gross, Operating, and Net-are deeply negative, as is typical for a pre-commercial business where the entire focus is on R&D and clinical trials.

Here's the quick math on their core profitability ratios:

• Gross Profit Margin: 0% (N/A). Since Passage Bio, Inc. is a pre-revenue company, it has no product sales, so the Gross Profit is effectively zero.
• Operating Profit Margin: Extremely Negative. Calculated as Operating Loss of -$47.08 million against negligible revenue, this margin is a non-starter for traditional valuation.
• Net Profit Margin: Extremely Negative. The TTM Net Loss of -$45.26 million confirms that every dollar spent is an investment in the pipeline, not a cost of goods sold.

Industry Context vs. Passage Bio, Inc.'s Losses

To be fair, comparing Passage Bio, Inc.'s negative margins to a commercial-stage company isn't useful. Most pre-revenue biotech startups are deeply unprofitable; their valuation is driven by pipeline potential, not short-term earnings. For example, a more mature, revenue-generating biotech firm might show a TTM Gross Margin of 32.6% and a Net Profit Margin of 9.37%. Passage Bio, Inc.'s negative margins simply reflect its stage of development, where the company is spending heavily to advance its lead candidate, PBFT02, through clinical trials.

The real metric to watch is the burn rate and operational efficiency (OpEx). You want to see management controlling costs without sacrificing the clinical timeline.

Analysis of Operational Efficiency and Cost Trends

The good news is that Passage Bio, Inc. is showing a clear, positive trend in cost management throughout 2025. This shows discipline. The company has successfully reduced its quarterly operating expenses (OpEx) significantly, which is a key action for preserving its cash runway into the first quarter of 2027.

Here's a breakdown of the quarterly OpEx reduction in 2025:

Honesty, a reduction in R&D from $7.7 million in Q1 to $4.3 million in Q3, and G&A from $6.1 million to $4.3 million, is a strong signal of focused execution and cost control. This reduction in OpEx is the most important profitability-related metric for a clinical-stage company right now. It means the cash is stretching further.

For a deeper dive into the capital structure that funds these operations, you should be Exploring Passage Bio, Inc. (PASG) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

Passage Bio, Inc. (PASG) operates with a capital structure that is far more reliant on equity and cash reserves than on traditional debt, which is typical for a clinical-stage biotechnology company. As of the latest balance sheet data in 2025, the company's total debt sits at approximately $24.34 million, while its total shareholder equity is around $31.1 million. This means the company is primarily funding its research and development (R&D) through shareholder capital, not borrowed money.

The Debt-to-Equity (D/E) ratio is the clearest way to see this balance. Here's the quick math: with $24.34 million in total debt and $31.1 million in equity, Passage Bio, Inc.'s D/E ratio is approximately 0.78. This is a low ratio in the grand scheme of things, but it's actually high for the specific sector.

A D/E ratio of 0.78 for Passage Bio, Inc. is significantly higher than the US Biotechnology industry average of just 0.17 as of November 2025. This tells you that while the company isn't heavily leveraged like a utility or industrial firm, it does carry more debt relative to its equity than most of its biotech peers. Still, the company has a strong cash position of approximately $52.77 million on its balance sheet, which gives it a substantial net cash position.

Passage Bio, Inc. is a pre-revenue company, so its financing strategy focuses on minimizing dilution while maintaining a long cash runway. That runway is currently projected to extend into the first quarter of 2027. This reliance on existing cash and equity funding-often from past public offerings-is the standard playbook for a firm focused on advancing its gene therapies like PBFT02 for FTD-GRN.

When you look at the debt itself, the total figure of $24.34 million represents various current and non-current liabilities, but there is no significant long-term debt or recent, large-scale debt issuance. The company has not announced any major debt issuances, credit rating changes, or refinancing activity in 2025. They are simply not in the business of taking on big loans right now.

The financing balance is clear: equity is the primary engine, debt is a minor component.

• Total Debt (approx. 2025): $24.34 million.
• Total Equity (approx. 2025): $31.1 million.
• Debt-to-Equity Ratio: 0.78.
• Biotech Industry Average D/E: 0.17.

For a deeper dive into the company's overall financial stability, you can read the full analysis at Breaking Down Passage Bio, Inc. (PASG) Financial Health: Key Insights for Investors.

Liquidity and Solvency

Passage Bio, Inc. (PASG) currently maintains a solid short-term liquidity position, but the underlying trend shows a clear cash burn that demands attention. While the company's cash reserves provide a runway into the first quarter of 2027, the core issue is the consistent negative cash flow from operations, which is typical for a clinical-stage biotech but still a critical risk for investors.

Your first check on any company's immediate financial health is the current and quick ratios, which measure short-term debt coverage. Passage Bio, Inc.'s most recent quarter (MRQ) shows a current ratio of 2.51 and a quick ratio of 2.37. These are defintely strong numbers, meaning the company has more than twice its current assets to cover its current liabilities-a comfortable buffer.

• Current Ratio: 2.51 (MRQ).
• Quick Ratio: 2.37 (MRQ).
• Both ratios signal strong short-term solvency.

However, the analysis of working capital trends reveals a significant decline in liquidity over the past year. The current ratio has dropped from 5.15 in Q3 2024 to 2.51 in the most recent period, reflecting a faster depletion of current assets, primarily cash, relative to current liabilities. This is directly tied to the cash position, which fell from $84.8 million as of September 30, 2024, to $52.8 million as of September 30, 2025. Honestly, that's a 37.7% drop in cash over twelve months. Here's the quick math on the cash flow components for the Trailing Twelve Months (TTM) ended Q3 2025:

The cash flow statements overview clearly shows the challenge: operating cash flow is a negative $33.47 million over the trailing twelve months. This negative figure is the company's cash burn (the rate at which it spends its cash reserves) from its core business, which is research and development (R&D) and general and administrative (G&A) expenses. The good news is that management has been working to slow this burn; Q3 2025 net loss was $7.7 million, a notable improvement from the $19.3 million net loss in Q3 2024.

The primary strength is the cash runway, which is projected to sustain operations into the first quarter of 2027. This gives the company nearly a year and a half to hit key clinical milestones for its lead candidate, PBFT02, and secure additional financing without immediate panic. The potential liquidity concern is simple: Passage Bio, Inc. is a pre-revenue company with an accumulated deficit of $674.6 million as of March 31, 2025, so it remains heavily dependent on capital markets or strategic partnerships to fund operations past the Q1 2027 runway. What this estimate hides is the potential for unexpected clinical trial costs or delays, which could shorten that runway fast.

To be fair, the company is actively managing expenses, with Q3 2025 R&D expenses dropping to $4.3 million from $8.7 million a year ago, and G&A expenses also falling to $4.3 million from $7.3 million. That's smart management, but the long-term solvency still hinges on clinical success and subsequent financing. For a deeper dive into the valuation, you should look at Breaking Down Passage Bio, Inc. (PASG) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking at Passage Bio, Inc. (PASG) and wondering if the market has it right. Is this clinical-stage gene therapy company a deep-value play or a classic biotech risk? The quick takeaway is that Wall Street sees a significant upside, but the core valuation metrics (multiples) reflect the company's pre-revenue, high-burn phase.

As of November 2025, the analyst consensus is a Strong Buy or Moderate Buy, which is a powerful signal. Four to six analysts cover the stock, and their average 12-month price target is a wide range, but let's use the most common one: $34.50. Considering the stock was trading around $9.03 in mid-November 2025, that target implies a potential upside of over 280%.

Decoding the Valuation Multiples

For a company like Passage Bio, Inc., which is focused on developing one-time therapies for rare diseases, traditional valuation ratios like Price-to-Earnings (P/E) are nearly meaningless. They're losing money, so the P/E is negative. Here's the quick math on what the numbers actually tell us:

• Price-to-Earnings (P/E): The P/E ratio is negative, with a trailing twelve months (TTM) value around -0.0447. This simply confirms the company is not profitable, which is the norm for a clinical-stage biotech. You are buying future potential, not current earnings.
• Price-to-Book (P/B): This is the most informative metric right now. The P/B ratio is approximately 0.90. A ratio below 1.0 suggests the stock is trading for less than the value of its net assets (assets minus liabilities), meaning you're buying the company's cash, equipment, and intellectual property at a discount.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio is also not practically calculable in a meaningful way, as the company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is negative. In fact, the Enterprise Value is reported as a negative figure of -$558,713, indicating the company holds more cash than debt and market capitalization, a common scenario for a cash-rich, clinical-stage company.

The Cash Runway and Stock Trend

The real valuation anchor is the cash position and the clinical pipeline. Passage Bio, Inc. reported cash, cash equivalents, and marketable securities of $52.8 million as of September 30, 2025, with a projected cash runway into the first quarter of 2027. That runway is your safety cushion, but it also dictates the urgency for positive clinical data.

Looking at the stock price trend over the last 52 weeks, the price has decreased by -15.51%, but that hides a massive volatility. The 52-week range has been from a low of $5.12 to a high of $26.60. That volatility is the risk premium for a gene therapy company. The stock had a 1-for-20 reverse split in July 2025, which can sometimes spook the market, but the focus remains on the clinical milestones for PBFT02, their lead candidate.

One thing is defintely clear: Passage Bio, Inc. does not pay a dividend, with a 0.00% dividend yield and no payout ratio to speak of, as is typical for a company reinvesting all capital into R&D. This is a pure growth-by-pipeline story. If you want to dive deeper into the financial mechanics that underpin this valuation, you can read the full post: Breaking Down Passage Bio, Inc. (PASG) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at Passage Bio, Inc. (PASG) and seeing a clinical-stage company with a single, high-potential gene therapy candidate, PBFT02. That focus is both the opportunity and the core risk. The company has made smart, aggressive cuts to extend its cash runway, but the entire investment thesis still hinges on a few critical milestones in the next year.

Operational and Strategic Risks: The Single-Product Thesis

The biggest internal risk for Passage Bio, Inc. is its pipeline concentration. Honestly, it's a one-shot bet right now. The company is heavily focused on its lead candidate, PBFT02, for Frontotemporal Dementia (FTD). This lack of publicly disclosed pipeline diversification means any setback with PBFT02-clinical hold, safety issue, or failure to meet efficacy endpoints-would be catastrophic for the stock price and the company's future.

• Single-asset dependency is a huge risk.
• Clinical trial success is the only revenue driver.
• Failure to replicate early data is a real threat.

To be fair, they are trying to mitigate this by getting strategic. They out-licensed their pediatric programs (like those for GM1 gangliosidosis and Krabbe disease) to GEMMA Biotherapeutics, Inc. to focus resources. They also cut their workforce by about 55% in January 2025 and ceased lab operations, a painful but necessary move to preserve capital.

Financial and Liquidity Risks: The Cash Burn

Despite significant cost-cutting, Passage Bio, Inc. is still burning cash as a pre-commercial biotech. For the nine months ended September 30, 2025, the company reported a net loss of $32.54 million. While this is an improvement from the prior year, it's still a massive hole to fill. Here's the quick math on their recent spending:

As of September 30, 2025, Passage Bio, Inc. held $52.8 million in cash, cash equivalents, and marketable securities. This is projected to fund operations into Q1 2027. What this estimate hides is the long-term dependency on continuous financing-they will defintely need to raise more capital, likely through equity offerings, which will dilute current shareholders.

External and Regulatory Hurdles

The regulatory path for gene therapy is complex and high-stakes. Passage Bio, Inc. is on track to get FDA feedback in the first half of 2026 on a registrational trial design for PBFT02. The key risk here is whether the FDA will accept a single-arm trial design (comparing to a natural history control) or mandate a more expensive, time-consuming randomized controlled trial.

Plus, there are general risks inherent to the sector:

• Regulatory Delays: Unexpected concerns in clinical data can trigger a delay or demand for further studies.
• Competition: The gene therapy space is crowded, and a competitor could leapfrog their progress.
• Manufacturing: While they've aligned with the FDA on a high-productivity manufacturing process that can yield over 1,000 doses per batch at >90% purity, dependence on third-party manufacturers still creates supply chain and quality risk.

For a deeper dive into who is betting on these risks, you should check out Exploring Passage Bio, Inc. (PASG) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking for the path to value in a clinical-stage biotech like Passage Bio, Inc. (PASG), and the answer is simple: it all hinges on the lead asset, PBFT02, and the operational runway to get it to a pivotal trial. The company's future growth is not about near-term revenue-analysts project $0.00 in consensus revenue for the full 2025 fiscal year-but about de-risking the clinical and manufacturing process for their gene therapy. That's the real opportunity.

The core growth driver is the advancement of PBFT02, a gene replacement therapy for Frontotemporal Dementia (FTD) caused by GRN or C9orf72 mutations. This is a disease with no approved disease-modifying treatments, which is a massive, unmet medical need. We're watching the upliFT-D Phase 1/2 study closely; enrollment for Dose 2 is open for both FTD-GRN (Cohort 3) and FTD-C9orf72 (Cohort 4) patients, which is a key operational milestone as we exit 2025. The next major catalyst is the updated interim safety and biomarker data, which Passage Bio, Inc. expects to report in the first half of 2026.

The financial picture for 2025 reflects this pre-revenue stage. The consensus Earnings Per Share (EPS) estimate for the 2025 fiscal year is -$13.81, with a range between -$14.71 and -$13.17. But honestly, the cash runway is the more important number right now. Passage Bio, Inc. reported cash, cash equivalents, and marketable securities of $57.6 million as of June 30, 2025, and they expect this to fund operations into the first quarter of 2027. That gives them enough time to hit the critical 2026 data readout and regulatory discussions.

Passage Bio, Inc. has a few strategic initiatives and competitive advantages that defintely position them for growth, assuming the clinical data holds up. They're not just relying on the science; they're addressing the industry's biggest bottlenecks.

• Product Innovation: PBFT02 is designed to elevate progranulin (PGRN) levels in the central nervous system, a mechanism supported by robust, durable elevation seen in interim data.
• Manufacturing Edge: They've aligned with the FDA on a high-productivity, suspension-based manufacturing process, which can produce over 1,000 PBFT02 doses from a single batch with over 90% purity. This scalability is a huge competitive advantage in gene therapy.
• Strategic Partnerships: The collaboration with InformedDNA for no-cost genetic counseling helps streamline patient recruitment, which is often a major drag on clinical timelines. They also maintain an important research and collaboration agreement with the Gene Therapy Program (GTP) at the University of Pennsylvania through 2025.
• Regulatory Strategy: Passage Bio, Inc. plans to seek FDA feedback in the first half of 2026 on a potential single-arm registrational study design. If the FDA agrees to this design, it could significantly accelerate the path to market, bypassing a longer, randomized Phase 3 trial.

Here's a quick look at the analyst consensus on the near-term financial estimates, just to map the cost of this clinical progress:

What this estimate hides is the potential for a massive inflection point post-2026. If the clinical data is strong, that $0.00 revenue line will change dramatically. For a deeper dive into the investor base that is currently betting on this long-term upside, you should check out Exploring Passage Bio, Inc. (PASG) Investor Profile: Who's Buying and Why?