10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2021

OR

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

Commission File Number: 001-36370

APPLIED GENETIC

TECHNOLOGIES CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware	59-3553710
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

14193 NW 119th Terrace, Suite 10, Alachua, Florida 32615

(Address of Principal Executive Offices, Including Zip Code)

(386) 462-2204

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.001 par value	AGTC	Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: None

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, a 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.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

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  ☒

The number of shares of the registrant’s common stock outstanding as of November 4, 2021 was 42,863,552.

APPLIED GENETIC TECHNOLOGIES CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION		3
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)		3
	Condensed Balance Sheets as of September 30, 2021 and June 30, 2021		3
	Condensed Statements of Operations for the three months ended September 30, 2021 and 2020		4
	Condensed Statements of Stockholders’ Equity for the three months ended September 30, 2021 and 2020		5
	Condensed Statements of Cash Flows for the three months ended September 30, 2021 and 2020		6
	Notes to Condensed Financial Statements		7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		14
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		23
ITEM 4.	CONTROLS AND PROCEDURES		23
	PART II. OTHER INFORMATION		23
ITEM 1.	LEGAL PROCEEDINGS		23
ITEM 1A.	RISK FACTORS		23
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		23
ITEM 6.	EXHIBITS		24
	SIGNATURE		25

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

APPLIED GENETIC TECHNOLOGIES CORPORATION

CONDENSED BALANCE SHEETS

(Unaudited)

In thousands, except per share data	September 30, 2021			June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	90,515		$	105,052
Investments		—			2,000
Prepaid and other current assets		2,871			2,655
Total current assets		93,386			109,707
Property and equipment, net		4,550			4,658
Intangible assets, net		1,303			1,287
Investment in Bionic Sight, LLC		7,969			8,000
Right-of-use assets - operating leases		3,059			3,167
Right-of-use asset - financing lease		23			34
Other assets		121			113
Total assets	$	110,411		$	126,966
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,083		$	1,879
Accrued and other liabilities		14,061			14,500
Lease liabilities - operating		1,121			1,116
Lease liability - finance		26			38
Current portion of long-term debt		4,418			2,181
Total current liabilities		21,709			19,714
Lease liabilities - operating, net of current portion		3,218			3,418
Long-term debt, net of debt discounts and deferred financing fees		15,659			17,727
Other liabilities		300			299
Total liabilities		40,886			41,158
Stockholders’ equity:
Preferred stock, par value $0.001 per share, 5,000 shares authorized; no shares issued and outstanding		—			—
Common stock, par value $0.001 per share, 150,000 shares authorized; 42,913 and 42,835 shares issued; 42,859 and 42,794 shares outstanding at September 30, 2021 and June 30, 2021, respectively		43			43
Additional paid-in capital		326,126			325,245
Treasury stock at cost; 54 and 41 shares at September 30, 2021 and June 30, 2021, respectively		(256	)		(211	)
Accumulated deficit		(256,388	)		(239,269	)
Total stockholders’ equity		69,525			85,808
Total liabilities and stockholders’ equity	$	110,411		$	126,966

The accompanying notes are an integral part of these Unaudited Condensed Financial Statements.

3

APPLIED GENETIC TECHNOLOGIES CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,
In thousands, except per share data	2021			2020
Revenue	$	—		$	—
Operating expenses:
Research and development		12,325			11,626
General and administrative and other		4,100			3,436
Total operating expenses		16,425			15,062
Loss from operations		(16,425	)		(15,062	)
Other income (expense), net:
Investment income, net		6			64
Interest expense		(669	)		(332	)
Total other income (expense), net		(663	)		(268	)
Loss before provision for income taxes		(17,088	)		(15,330	)
Provision for income taxes		—			21
Loss before equity in net losses of an affiliate		(17,088	)		(15,351	)
Equity in net losses of an affiliate		(31	)		(29	)
Net loss	$	(17,119	)	$	(15,380	)
Weighted average shares outstanding:
Basic		42,823			25,818
Diluted		42,823			25,818
Net loss per common share:
Basic	$	(0.40	)	$	(0.60	)
Diluted	$	(0.40	)	$	(0.60	)

The accompanying notes are an integral part of these Unaudited Condensed Financial Statements.

4

APPLIED GENETIC TECHNOLOGIES CORPORATION

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

THREE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(Unaudited)

	Common Stock				Treasury Stock
In thousands	Outstanding Shares		Amount		Shares		Amount			Additional Paid-in Capital		Accumulated Deficit			Totals
Balances at June 30, 2021		42,794	$	43		41	$	(211	)	$	325,245	$	(239,269	)	$	85,808
Share-based compensation expense		—		—		—		—			810		—			810
Shares issued under employee plans and related share repurchases		65		—		13		(45	)		71		—			26
Net loss		—		—		—		—			—		(17,119	)		(17,119	)
Balances at September 30, 2021		42,859	$	43		54	$	(256	)	$	326,126	$	(256,388	)	$	69,525
	Common Stock				Treasury Stock
In thousands	Outstanding Shares		Amount		Shares		Amount			Additional Paid-in Capital		Accumulated Deficit			Totals
Balances at June 30, 2020		25,793	$	25		20	$	(88	)	$	252,519	$	(181,440	)	$	71,016
Share-based compensation expense		—		—		—		—			646		—			646
Shares issued under employee plans and related share repurchases		67		—		21		(123	)		43		—			(80	)
Net loss		—		—		—		—			—		(15,380	)		(15,380	)
Balances at September 30, 2020		25,860	$	25		41	$	(211	)	$	253,208	$	(196,820	)	$	56,202

The accompanying notes are an integral part of these Unaudited Condensed Financial Statements.

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APPLIED GENETIC TECHNOLOGIES CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended September 30,
In thousands	2021			2020
Operating activities:
Net loss	$	(17,119	)	$	(15,380	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense		810			646
Depreciation and amortization		364			381
Investment premium accretion, net		—			4
Amortization of debt discounts and deferred financing fees		169			82
Reduction in the carrying amount of operating lease right-of-use assets		108			85
Equity in net losses of an affiliate		31			29
Changes in operating assets and liabilities:
Prepaid and other assets		(224	)		719
Accounts payable		135			262
Operating lease liabilities		(195	)		(167	)
Accrued and other liabilities		(15	)		422
Cash used in operating activities		(15,936	)		(12,917	)
Investing activities:
Purchases of property and equipment		(545	)		(654	)
Purchases of and capitalized costs related to intangible assets		(70	)		(106	)
Maturities of investments		2,000			16,000
Purchases of investments		—			(8,996	)
Cash provided by investing activities		1,385			6,244
Financing activities:
Proceeds from exercises of common stock options		71			43
Payments for deferred financing fees		—			(129	)
Taxes paid related to equity awards		(45	)		(123	)
Principal payments on a finance lease		(12	)		(11	)
Cash provided by (used in) financing activities		14			(220	)
Net decrease in cash and cash equivalents		(14,537	)		(6,893	)
Cash and cash equivalents, beginning of the period		105,052			38,463
Cash and cash equivalents, end of the period	$	90,515		$	31,570
Supplemental information:
Costs for purchases of property and equipment included in accounts payable	$	96		$	—
Costs for intangible assets included in accounts payable/accrued and other liabilities	$	25		$	37

The accompanying notes are an integral part of these Unaudited Condensed Financial Statements.

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APPLIED GENETIC TECHNOLOGIES CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1. Organization and Operations

Applied Genetic Technologies Corporation (the “Company” or “AGTC”) was incorporated as a Florida corporation on January 19, 1999 and reincorporated as a Delaware corporation on October 24, 2003. The Company is a clinical-stage biotechnology company that uses a proprietary gene therapy platform to develop transformational genetic therapies for people suffering from rare and debilitating ophthalmic, otologic and central nervous system diseases.

The Company has devoted substantially all of its efforts to research and development, including clinical trials. The Company has not completed the development of any products. The Company has generated revenue from collaboration agreements, licensing of its intellectual property, sponsored research agreements and grants, but has not generated product revenue to date and is subject to a number of risks similar to those of other early stage companies in the biotechnology industry, including dependence on key individuals, the difficulties inherent in the development of commercially viable products, the need to obtain additional capital necessary to fund the development of its products, development by the Company or its competitors of technological innovations, risks of failure of clinical studies, protection of proprietary technology, compliance with government regulations and the ability to transition to large-scale production of products.

As of September 30, 2021, the Company had (i) an accumulated deficit of $256.4 million and (ii) cash and cash equivalents of $90.5 million. Management believes that there is sufficient funding available to allow the Company to generate data from its ongoing and planned clinical programs and fund currently planned research and discovery programs. While the Company expects to generate some revenue from collaborations, sponsored research agreements, grants and licensing of its intellectual property, management believes that the Company will incur losses for the foreseeable future. The Company has funded its operations to date primarily through public offerings of its common stock and warrants to purchase its common stock, private placements of its preferred stock, collateralized borrowing and collaborations.

2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying Unaudited Condensed Financial Statements have been prepared in accordance with (i) U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and (ii) the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, such financial statements do not include all the information and footnotes required by U.S. GAAP for a complete set of financial statements. In the opinion of management, the Unaudited Condensed Financial Statements include all adjustments, consisting of normal recurring accruals and other adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows as of and for the periods presented. The accompanying Condensed Balance Sheet as of June 30, 2021 was derived from the Company’s audited financial statements at that date but does not include all of the footnote disclosures required by U.S. GAAP.

The Unaudited Condensed Financial Statements should be read in conjunction with the Company’s audited financial statements and related notes included in its Annual Report on Form 10-K for the year ended June 30, 2021 (the “2021 Form 10-K”). The Company’s significant accounting policies are described in Note 2 to the Notes to Financial Statements in the 2021 Form 10-K and are updated, as necessary, in subsequent Form 10-Q filings.

The Company’s fiscal year is the twelve-month period from July 1 to June 30. The results of operations for the three months ended September 30, 2021 are not necessarily indicative of the Company’s operating results for the full year ending June 30, 2022 or any subsequent interim period within that year.

Management views the Company’s operations and manages its business as one segment.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP and guidelines from the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during reporting periods. Actual results could differ from those estimates.

7

Income Taxes

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Interest and penalties related to uncertain tax positions are reflected in the provision for income taxes.

The Company’s provision for income taxes was $21,000 for the three months ended September 30, 2020, which was entirely attributable to estimated interest and penalties on uncertain tax positions. There was no provision for income taxes during the three months ended September 30, 2021 because, among other things, the Company had no uncertain tax positions in that reporting period.

Net income or loss per share

Basic net income or loss per share is calculated by dividing net income or loss by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net income or loss per share is calculated by adjusting the weighted average shares outstanding for the dilutive effects of common stock equivalents outstanding during the period, determined using the treasury stock method. For purposes of diluted net income or loss per share calculations, warrants to purchase the Company’s common stock, stock options, restricted stock awards, restricted stock units and performance service awards are considered to be common stock equivalents if they are dilutive. The dilutive impact of common stock equivalents for the three months ended September 30, 2021 and 2020 was approximately 0.2 million and 0.5 million shares, respectively. However, those common stock equivalents were excluded from the calculations of diluted net loss per share for all periods presented herein because their effects were anti-dilutive.

The common stock equivalents for the three months ended September 30, 2021 excluded certain warrants to purchase the Company’s common stock, which are described at Note 7 in these Notes to Unaudited Condensed Financial Statements, because the exercise price of such warrants was greater than the average market price of the Company’s common stock during the related period. 

New Accounting Pronouncements

Adopted during the three months ended September 30, 2021

Financial Instruments—Credit Losses

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires that financial assets measured at amortized cost be presented at the net amount expected to be collected and separately measure an allowance for credit losses that is deducted from the amortized cost basis of those financial assets. The Company early adopted the new standard on July 1, 2021; however, it did not have a significant impact on the Company’s financial statements.

Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new standard includes several provisions that simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and increasing consistency and clarity for the users of financial statements. The Company adopted the new standard on July 1, 2021; however, it did not have a significant impact on the Company’s financial statements.

Investments – Equity Securities, Investments – Equity Method and Joint Ventures, and Derivatives and Hedging

In January 2020, the FASB issued ASU No. 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The new standard addresses interactions between the guidance to account for certain equity securities under Accounting Standards Codification (“ASC”) Topic 321, the guidance to account for investments under the equity method of accounting in ASC Topic 323 and the guidance in ASC Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with ASC Topic 825, Financial Instruments. The Company adopted the new standard on July 1, 2021; however, it did not have a significant impact on the Company’s financial statements.

8

3. Share-based Compensation Plans

The Company uses stock options, performance service awards, restricted stock awards and restricted stock units to provide long-term incentives to its employees, nonemployee directors and certain consultants. The Company has two equity compensation plans under which awards are currently authorized for issuance: the 2013 Employee Stock Purchase Plan and the 2013 Equity and Incentive Plan. No awards have been issued to date under the 2013 Employee Stock Purchase Plan and, as such, all of the 128,571 shares previously authorized under that plan remain available for issuance.

Stock Options

Information about the Company’s stock options that do not have performance conditions is provided below.

	Three Months Ended September 30,
	2021					2020
(In thousands, except per share amounts)	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding at the beginning of the period		4,186		$	7.69		3,846		$	7.82
Granted		1,467			3.62		1,016			5.34
Exercised		(24	)		3.00		(12	)		3.70
Forfeited		(234	)		4.27		(136	)		4.29
Expired		(348	)		12.93		(42	)		12.08
Outstanding at the end of the period		5,047		$	6.32		4,672		$	7.35
Exercisable at the end of the period		2,667					2,515
Weighted average fair value of options granted during the period	$	2.55				$	3.89

The fair value of each stock option granted is estimated on the date of grant using a Black-Scholes stock option pricing model. Below are the assumptions that were used when estimating fair value for the periods indicated.

	Three Months Ended September 30,
Assumption	2021			2020
Dividend yield		0.00	%		0.00	%
Expected term		6.00 to 6.25 years			6.25 years
Risk-free interest rate		0.80% to 0.96%			0.30% to 0.39%
Expected volatility		82.51	%		82.60	%

In addition to the stock option activity described above, the Company also granted 100,000 performance-based stock options to a senior officer during July 2019 with an exercise price of $3.91. That award: (i) was issued under the 2013 Equity and Incentive Plan; (ii) has a term of ten years; and (iii) includes six separate tranches with performance criteria that will each vest 25% upon their achievement, with the remaining 75% of the tranche vesting on a monthly basis over a period of three years subsequent to achieving the underlying performance objective (assuming continued service by the awardee). Each tranche represents one-sixth of the total award. If any of the performance criteria are not satisfied, that corresponding tranche will be forfeited. As of September 30, 2021, one of the six performance criteria has been met and one criterion will likely never be met. The Company used a Black-Scholes stock option pricing model to estimate the grant date fair value of each option to be $2.58; however, determining the appropriate periodic share-based compensation expense for this award requires management to estimate the likelihood of the achievement of the performance targets.

Subsequent to September 30, 2021, the Company granted approximately 0.3 million new service-only stock options to its employees, with each such option having an exercise price equal to the closing price of the Company’s common stock on the date of grant. 

Restricted Stock Units

During August 2019, 175,500 restricted stock units with a market-based vesting condition related to the trading price of the Company’s common stock were granted to certain employees under the 2013 Equity and Incentive Plan. Those awards had a weighted average grant date fair value of $2.56. Prior to June 30, 2020, the market condition embedded in the award was met. On August 15, 2021 and 2020, 54,500 and 76,500 restricted stock units vested and the underlying shares were issued to the grantees. A total of

9

44,500 restricted stock units were forfeited through August 15, 2021 and, subsequent to that date, no restricted stock units with market-based vesting conditions remain outstanding. The fair value of each restricted stock unit awarded was estimated on the grant date using a Monte Carlo simulation pricing model, which incorporated the probability of satisfying the related market-based vesting condition.

From May 2021 to July 2021, the Company granted 579,500 restricted stock units to certain employees under the 2013 Equity and Incentive Plan with a weighted average grant date fair value of $4.16. Those awards generally vest in equal amounts on each of the first and second anniversaries of the date of grant, assuming continuing service by the grantee. As of September 30, 2021, 108,000 restricted stock units have been forfeited. The fair value of each restricted stock unit awarded was determined based on the market value of the Company’s common stock on the date of grant and the related expense is being recognized using a graded vesting schedule that is aligned with the grantees’ vesting dates. No additional restricted stock unit awards are expected to be granted under this program.

Share-based compensation expense for the three months ended September 30, 2021 and 2020 was $0.8 million and $0.6 million, respectively. The portion of such expense pertaining to stock options awarded to employees, nonemployee directors and consultants was $0.5 million and $0.6 million for the three months ended September 30, 2021 and 2020, respectively. Share-based compensation expense pertaining to restricted stock awards and restricted stock units awarded to employees and consultants totaled $0.3 million and $54,000 for the three months ended September 30, 2021 and 2020, respectively. 

4. Investments and Fair Values of Financial Instruments

Cash in excess of immediate requirements is invested in accordance with the Company’s investment policy, which primarily seeks to maintain adequate liquidity and preserve capital. At June 30, 2021, the Company’s investments consisted of a held-to-maturity debt security that matured in July 2021 (the $2.0 million amortized cost of that investment approximated its fair value on such date). The Company held no investments at September 30, 2021.

The Company is required to disclose information regarding all assets and liabilities reported at fair value that enables an assessment of the inputs used when determining the reported fair values. ASC Topic 820, Fair Value Measurements and Disclosures, establishes a hierarchy of inputs used when available. Observable inputs are inputs that market participants would use when pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use when pricing an asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used when determining the reported fair value of financial instruments and is not a measure of an investment’s credit quality. The three levels of the fair value hierarchy are described below.

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable.

To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company when determining fair value is greatest for financial instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Certain assets and liabilities are measured at fair value in the Company’s financial statements or have fair values disclosed in these Notes to Unaudited Condensed Financial Statements. Such assets and liabilities are classified into one of the three levels of the fair value hierarchy. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. The methods and assumptions described below were used to estimate fair values and determine the fair value hierarchy classification of each class of financial instrument held by the Company.

Cash and Cash Equivalents. The carrying value of cash and cash equivalents approximates fair value because the maturities thereof are less than three months.

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Debt securities—held-to-maturity. The Company’s investments in debt securities classified as held-to-maturity have historically consisted of U.S. Treasury securities that were valued using quoted market prices. Valuation adjustments were not applied.

The fair value hierarchy table below provides information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis or disclosed at fair value in these Notes to Unaudited Condensed Financial Statements.

In thousands	Level 1		Level 2		Level 3		Total Fair Value
September 30, 2021
Cash and cash equivalents	$	90,515	$	—	$	—	$	90,515
June 30, 2021
Cash and cash equivalents	$	105,052	$	—	$	—	$	105,052
Held-to-maturity investment (U.S. Treasury security)		2,000		—		—		2,000
Total assets	$	107,052	$	—	$	—	$	107,052

The Company’s financial instruments also include its variable-rate borrowing under a debt agreement that is described at Note 5 in these Notes to Unaudited Condensed Financial Statements. Management believes that the carrying amount of such debt (i.e., $20.1 million and $19.9 million at September 30, 2021 and June 30, 2021, respectively) reasonably approximates its fair value on those dates because the rate of interest on such borrowing reflects current market rates of interest for similar instruments with comparable maturities and risk profiles. This assessment primarily uses Level 2 inputs under the fair value hierarchy.

5. Debt

The following discussion of the Company’s debt should be read in conjunction with Note 8 to the Notes to Financial Statements in the 2021 Form 10-K.

On June 30, 2020, the Company entered into a Loan and Security Agreement (as amended effective May 13, 2021, the “Amended Loan Agreement”) with several banks and other financial institutions or entities from time to time parties to the Amended Loan Agreement (collectively, referred to as the “Lenders”) and Hercules Capital, Inc., in its capacity as administrative agent and collateral agent for itself and the Lenders.

The Amended Loan Agreement provides for a term loan in an aggregate principal amount of up to $25.0 million to be delivered in multiple tranches (the “Term Loan”). The first two tranches under the Amended Loan Agreement consisted of term loan advances of $10.0 million on each of June 30, 2020 and May 13, 2021. Subject to the Lenders’ investment committee’s sole discretion, the Company has the right to request that the Lenders make additional term loan advances in an aggregate principal amount of up to $5.0 million prior to April 1, 2022 or, if certain conditions are satisfied, then prior to January 1, 2023. However, there can be no assurances that any additional term loan advances will be funded by the Lenders in the future.

As of both September 30, 2021 and June 30, 2021, the variable contractual interest rate on the Term Loan was 9.75% per annum and the effective interest rate on the Term Loan was 13.26%. Prior to completing the loan amendment in May 2021, the effective interest rate on the Term Loan was 13.53%.

As of September 30, 2021, the Company was in full compliance with all covenants of the Amended Loan Agreement.

6. Collaboration Agreements and Contract Liabilities

Bionic Sight

On February 2, 2017, the Company entered into a strategic research and development collaboration agreement with Bionic Sight, LLC (“Bionic Sight”) to develop therapies for patients with visual deficits and blindness due to retinal disease. Through the AGTC-Bionic Sight collaboration, the companies seek to develop a new optogenetic therapy that leverages AGTC’s deep experience in gene therapy and ophthalmology and Bionic Sight’s innovative neuro-prosthetic device and algorithm for retinal coding. The collaboration agreement grants to AGTC, subject to achievement by Bionic Sight of certain development milestones, an option to exclusively negotiate for a limited period of time to acquire: (i) a majority equity interest in Bionic Sight; (ii) the Bionic Sight assets to which the collaboration agreement relates; or (iii) an exclusive license with respect to the product to which the collaboration agreement relates.

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Under the agreement, AGTC made an initial $2.0 million payment for an equity interest of approximately 5% in Bionic Sight. During March 2020, the Company’s equity interest in Bionic Sight increased to approximately 15.5% in connection with (i) AGTC’s purchase of additional equity for $4.0 million and (ii) the conversion of certain AGTC-provided research and development support costs and in-kind contributions, which aggregated approximately $2.2 million, to an equity interest in Bionic Sight, in each case, consistent with the provisions of the collaboration agreement. AGTC is not obligated to purchase additional equity in Bionic Sight or make any additional in-kind contributions under the agreement. The Company recorded its initial investment in Bionic Sight using the equity method of accounting for investments. Upon receipt of additional equity in March 2020, management concluded that equity method accounting remained appropriate.

Otonomy, Inc.

During October 2019, the Company entered into a strategic collaboration agreement with Otonomy, Inc. (“Otonomy”) to co-develop and co-commercialize an adeno-associated virus-based gene therapy to restore hearing in patients with sensorineural hearing loss caused by a mutation in the gap junction protein beta 2 gene (“GJB2”) – the most common cause of congenital hearing loss. Mutations in GJB2 account for approximately 30% of all genetic hearing loss cases. People with this mutation can have severe-to-profound deafness in both ears that is identified in screening tests routinely performed on newborns. Under the collaboration agreement, the parties began equally sharing the program costs and proceeds in January 2020 and can include additional genetic hearing loss targets in the future.

The Company concluded that the Otonomy collaboration agreement is within the scope of ASC Topic 808, Collaborative Arrangements (“Topic 808”), which defines collaborative arrangements and addresses the presentation of transactions between the parties in an entity’s statement of operations and the related disclosures. However, Topic 808 does not provide guidance on the recognition of consideration exchanged or accounting for the obligations that may arise between the parties. The Company concluded that ASC Topic 730, Research and Development, should be applied by analogy to payments between the parties during the development activities. As such, payments made to or received from Otonomy for development activities are recorded as research and development expenses. For each of the three months ended September 30, 2021 and 2020, settlement activity between the parties under the Otonomy agreement had an immaterial effect on the Company’s research and development expenses.

Contract Liabilities

As of both September 30, 2021 and June 30, 2021, accrued and other liabilities on the Company’s balance sheets included $374,000 of deferred revenue. In the account balance at June 30, 2021 was $225,000 that was billed to a customer and collected by the Company in July 2021. Management is unable to estimate when the Company will satisfy the performance obligations pertaining to its deferred revenue at September 30, 2021.

7. Stockholders’ Equity

On February 1, 2021, the Company closed an underwritten public offering of 16,741,573 shares of its common stock, together with accompanying warrants to purchase 8,370,786 shares of its common stock. The combined offering price of each share of common stock and accompanying warrant was $4.45, generating gross proceeds of $74.5 million, before deducting underwriting discounts, commissions and other offering expenses payable by the Company, which totaled $5.2 million.

The warrants have an exercise price of $6.00 per share (subject to certain adjustments), are immediately exercisable and expire on February 1, 2026. The warrants are legally detachable from the common stock that was issued on February 1, 2021 and are separately exercisable by the warrant holders. While the warrants are outstanding (but unexercised), the warrant holders will participate in any dividend or other distribution of the Company’s assets to its common stockholders by way of return of capital or otherwise. As of September 30, 2021, none of the warrants have been exercised.

8. Commitments and Contingencies

Lease Commitment

As of September 30, 2021, the Company had entered into a long-term real property lease agreement that has not yet commenced and, therefore, is not recorded on its balance sheets. This lease, which is discussed in Note 3 to the Notes to Financial Statements in the 2021 Form 10-K under the heading “Build-To-Suit Manufacturing and Quality Control Facility in Alachua, Florida,” requires non-cancelable undiscounted future base rent payments aggregating $26.8 million over twenty years (assuming that the Company does not elect the early termination option).

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COVID-19 Pandemic

On January 30, 2020, the World Health Organization (the “WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (“COVID-19”) and the risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. National, state and local governments in affected regions have implemented, and are likely to continue to implement, safety precautions, including quarantines, border closures, increased border controls, travel restrictions, shelter in place orders and shutdowns, business closures, cancellations of public gatherings and other measures. Organizations and individuals are taking additional steps to avoid or reduce infection, including limiting travel and staying home from work.

The worldwide spread of COVID-19 led to a global slowdown of economic activity and decreased demand for a broad variety of goods and services, while also disrupting sales channels and marketing activities and precipitating many corporate bankruptcy filings. As a result of the COVID-19 outbreak, the Company experienced delays in enrollment of pediatric patients in the dose escalation portions of certain of its clinical trials for achromatopsia. Additionally, the latest surge in cases due to a COVID-19 variant has created new challenges for the Company to schedule patients for screening at some sites due to capacity and bandwidth limitations, which has impacted enrollment in at least one of the Company’s clinical trials. The Company could also experience delays resulting from critical follow-up visits required under clinical trial protocols, which could increase the cost of those trials and also impact their expected timelines. Management’s ability to fully interpret the trial outcomes and the ability of certain lab-based employees to perform their jobs due to stay-at-home orders or other restrictions related to COVID-19 could also result in delays and increase the Company’s operating expenses. Furthermore, third-party vendors, such as raw material suppliers and contract manufacturing, testing or research organizations, could also be impacted by COVID-19, which could result in unavoidable delays and/or increases in the Company’s operating costs.

Notwithstanding the rapid development and rollout of certain vaccines, it is unknown: (i) how long the COVID-19 outbreak will continue before the virus, including newly identified strains and variants, is adequately contained; (ii) the severity of the virus; and (iii) the effectiveness of actions to prevent transmission and treat those who have contracted COVID-19. The extent to which the COVID-19 outbreak may impact the Company’s financial condition, results of operations or cash flows is uncertain; however, as of the date of these financial statements, management is not aware of any specific event or circumstance that would require the Company to update its estimates or judgments, or adjust the carrying values of its assets or liabilities. Because future events are subject to change, management’s best estimates and judgments may require future modification. Therefore, actual results could differ materially from current estimates. Management is closely monitoring the evolving impact of the pandemic on all aspects of the Company’s business and periodically evaluates its estimates, which are adjusted prospectively based on such evaluations.

General

From time to time, the Company may be involved in claims and legal actions that arise in the normal course of business. Management has no reason to believe that the outcome of any such legal actions would have a significant adverse effect on the Company’s financial position, results of operations or cash flows.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides an overview of our financial condition as of September 30, 2021 and our results of operations for the three months ended September 30, 2021 and 2020. This discussion should be read in conjunction with the Unaudited Condensed Financial Statements and related notes included in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the year ended June 30, 2021 (the “2021 Form 10-K”). In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report, as well as those set forth in Part I, Item 1A, “Risk Factors,” of the 2021 Form 10-K. Forward-looking statements include information concerning our possible or assumed future results of operations, including results and timing of our clinical trials and planned clinical trials, business strategies and operations, financing plans, potential growth opportunities, potential market opportunities and the effects of competition, as well as assumptions relating to the foregoing. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s plans, estimates, assumptions and beliefs only as of the date of this report. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

As used herein, except as otherwise indicated by context, references to “we,” “us,” “our,” “AGTC” or the “Company” refer to Applied Genetic Technologies Corporation.

Overview

We are a clinical-stage biotechnology company that uses a proprietary gene therapy platform to develop transformational genetic therapies for people suffering from rare and debilitating diseases. Our initial focus is in the field of ophthalmology, where we have active clinical programs in X-linked retinitis pigmentosa (“XLRP”), achromatopsia (“ACHM”) and a partnered optogenetics program, as well as a preclinical program in dry age-related macular degeneration (“dAMD”). In addition to ophthalmology, we have initiated one partnered preclinical program in otology and two preclinical programs targeting central nervous system disorders (“CNS”), including frontotemporal dementia (“FTD”) and amyotrophic lateral sclerosis (“ALS”). Our optogenetics program is being developed in collaboration with Bionic Sight, LLC (“Bionic Sight”) and our otology program is being developed in collaboration with Otonomy, Inc. (“Otonomy”). With a number of important clinical milestones on the horizon, we believe that we are well positioned to advance multiple programs toward pivotal studies. In addition to our product pipeline, we have also developed broad technological and manufacturing capabilities utilizing both our internal scientific resources and through collaborations with others.

Since our inception, we have devoted substantially all of our resources to development efforts relating to our proof-of-concept programs in ophthalmology, otology and CNS, including manufacturing product in compliance with good manufacturing practices, preparing to conduct and conducting clinical trials of our product candidates, providing general and administrative support for these operations and protecting our intellectual property. We do not have any products approved for sale and have not generated any revenue from product sales. We have funded our operations to date primarily through public offerings of our common stock and warrants to purchase our common stock, private placements of our preferred stock, collateralized borrowing and collaborations. We have also been the recipient, either independently or with our collaborators, of grant funding administered through federal, state, and local governments and agencies, including the United States Food and Drug Administration, or FDA, and by patient advocacy groups such as The Foundation Fighting Blindness.

We have incurred losses from operations in each year since inception, except for fiscal year 2017, wherein we reported net income of $0.4 million due, in part, to profits from a collaboration agreement that was ultimately terminated in March 2019. For the three months ended September 30, 2021 and 2020, we reported net losses of $17.1 million and $15.4 million, respectively. Substantially all our net losses resulted from costs incurred in connection with our research and development programs and general and administrative and other expenses associated with our operations. We expect to continue to incur significant operating expenses for at least the next several years and anticipate that such expenses will increase substantially in connection with our ongoing activities as we:

• continue to conduct clinical trials for our XLRP and ACHM product candidates and preclinical studies for our other ophthalmology, otology and CNS product candidates;

• continue our research and development efforts, including exploration through early preclinical studies of potential applications of our gene therapy platform in:

• orphan ophthalmology indications;

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• non-orphan ophthalmology indications, including dAMD and other retinal diseases; and

• other inherited diseases, such as otology and CNS indications;

• manufacture clinical trial materials and develop larger-scale manufacturing capabilities, including the lease of a new build-to-suit manufacturing and quality control facility;

• seek regulatory approval for our product candidates;

• further develop our gene therapy platform;

• add personnel to support our scientific, collaboration, product development and commercialization efforts; and

• continue to operate as a public company.

As of September 30, 2021, we had cash and cash equivalents totaling $90.5 million. We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and which we believe is subject to significant uncertainty. We believe that our available cash and cash equivalents will be sufficient to allow us to generate data from our ongoing and planned clinical programs and fund currently planned research and discovery programs into calendar year 2023. We will require substantial additional funding to complete our XLRP Phase 2/3 (“Vista”) trial, move our ACHMB3 product candidate forward, obtain regulatory approval for our lead product candidates and build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize our lead product candidates, if approved. Also, our current operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements, acquisitions or other business development activities, or a combination of these approaches. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our product candidates and continue our research and development efforts.

Recent Developments

XLRP

In November 2020, we announced a modification to the primary endpoint for our Vista and Phase 1/2 Expansion (“Skyline”) trials based on comments received from the FDA. The design of our Vista trial is expected to include approximately 60 patients randomized across three arms: a low-dose group (the 1.2E+11 vg/mL Group 2 dose from the ongoing Phase 1/2 trial), a high-dose group (the 1.1E+12 vg/mL Group 5 dose from the ongoing Phase 1/2 trial) and an untreated control group. The primary endpoint will be visual sensitivity defined as having at least a 7 decibel improvement in visual sensitivity in at least 5 pre-specified loci at Month 12. Together with a third-party vendor, we have developed a machine learning algorithm that, on a patient-by-patient basis, predicts the loci most likely to improve through evaluation of baseline visual sensitivity. The algorithm was developed using the available microperimetry data from the Phase 1/2 dose escalation study. Secondary endpoints include mean change in visual sensitivity, improvements in visual acuity and improvements in performance on a visual navigation course. We plan to include a masked interim analysis at Month 6, with that data expected to be released in the fourth quarter of calendar year 2022, which may provide us with the opportunity to discuss with the FDA adjustments to the trial, if necessary, to optimize outcomes.

In May 2021, we provided 12-month data from our XLRP Phase 1/2 trial from seven patients in Group 5 and four patients in Group 6. One patient in Group 5 and two patients in Group 6 would not meet the inclusion criteria for the Skyline and Vista trials, resulting in a total of eight patients who were included in the responder analysis. Four of these eight patients (50%) were considered responders, all four of whom met the strict criteria of at least a 7 decibel improvement in at least 5 loci. One additional patient did not meet these criteria but had a statistically significant improvement in retinal sensitivity in the treated eye compared with the untreated eye at 12 months. In Group 4, two of six patients that meet the inclusion criteria for Skyline and Vista trials were considered responders that met the strict criteria and an additional two patients did not meet these criteria but had a statistically significant improvement in retinal sensitivity in the treated eye compared to the untreated eye at 12 months.

Consistent with previously reported 6-month data from Groups 2, 4, 5 and 6, the assessment of Best Corrected Visual Acuity (“BCVA”) in these groups at 12 months continues to provide supportive evidence of improved visual acuity in these patients and the difference between treated and untreated eyes is statistically significant. We believe that these data, together with the favorable safety profile, have the potential to differentiate our XLRP candidate from competitors.

Data from three of the Group 4 patients were available for analysis at Month 24, including two who were responders at Month 12 (one by the 7 decibel change in at least 5 loci response criteria and the other demonstrated statistically significant improvement in retinal sensitivity in the treated eye compared with the untreated eye). These two patients are still responders at Month 24 according to the same criteria; the third patient who has reached Month 24 was not a responder at Month 12 or Month 24. To the best of our knowledge, this is the first XLRP gene therapy clinical trial to demonstrate continued durability of response at this time point.

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The ellipsoid zone (“EZ”), a defined region within the photoreceptor layer of the retina, degenerates over time in patients with XLRP and is eventually lost. Dr. Paul Yang, Assistant Professor of Ophthalmology at the Casey Eye Institute, Oregon Health & Science University and one of our study investigators, presented data in September 2021 at the Fourteenth International Symposium on Retinal Degeneration showing that certain baseline characteristics of the EZ were highly predictive of improvement after treatment and that improvements in visual sensitivity measured by the MAIA and improvements in the EZ in Groups 4 to 6 of our XLRP Phase 1/2 clinical trial were strongly associated and statistically significant.

Data from all 28 patients across six dose groups in the Phase 1/2 trial continue to demonstrate a favorable safety profile with no dose-limiting inflammatory responses observed. This safety profile, which has shown no clinically significant inflammation not manageable with steroids, continues to be observed out to at least 24 months.

We believe that we have a potential best-in-class XLRP product candidate that may provide significant benefits to patients with XLRP and we expect to:

• present 12-month trial results from the ongoing Phase 1/2 clinical trial at the American Academy of Ophthalmology Annual Meeting being held from November 12, 2021 to November 15, 2021;

• provide Skyline trial results from the 3-month masked interim analysis in the first half of calendar year 2022;

• provide Skyline trial results from the 12-month data in the fourth quarter of calendar year 2022;

• provide 24-month results from the ongoing XLRP Phase 1/2 clinical trial in the third quarter of calendar year 2022; and

• provide Vista trial results from the 6-month masked interim analysis in the fourth quarter of calendar year 2022.

As part of the Skyline trial, we intend to dose a total of 12 additional patients across two dose groups. In addition to providing supplementary data on the primary endpoint of visual sensitivity at pre-specified loci, the Skyline trial is intended to evaluate the correlation of this perimetry data with a new mobility navigation course developed for use with retinitis pigmentosa patients. This trial will have the same overall design as the Vista trial.

ACHM

In June 2021, we announced 12-month data from our on-going Phase 1/2 ACHM clinical trials showing biological activity in patients with mutations in the ACHMB3 gene. In July 2021, we hosted a virtual Research Day that provided an expanded analysis of the 12-month data from our ongoing Phase 1/2 clinical trials in ACHM, including a discussion on light sensitivity and ACHM genetics. These data indicated biologic activity in the dose escalation portions in both the ACHMB3 and ACHMA3 trials. The response was more robust in the ACHMB3 patients than the ACHMA3 patients and, therefore, we plan to move forward with planning for late-stage development of the ACHMB3 product candidate.

Retinal sensitivity, as measured by full-field perimetry, improved in four of 11 ACHMB3 patients in the high dose adult and pediatric groups, as well as two patients in the low dose adult groups. There were no notable changes in the untreated fellow eyes. The light level in which the patients experienced discomfort, the single most important symptom to patients, also improved in six of the 11 patients with improvement also seen in the fellow eye of those six patients. At our virtual Research Day, Medical College of Wisconsin study investigator Joseph Carroll, Ph.D., noted that bilateral effects to monocular stimuli are not uncommon in ophthalmology, and he described well-established neuro-anatomical and physiological explanations for this observation. Three of these patients were also responders for visual sensitivity providing more evidence of overall improvement in visual function.

Given the evidence of treatment response described above for all adults and the lowest dose group 4 pediatric patients, as well as supportive anecdotal patient reports, we are preparing for an End of Phase 2 (EOP2) submission for our ACHMB3 program and to request a meeting with the FDA in advance of initiating a Phase 2/3 trial. We expect this meeting to occur in the first half of calendar year 2022. We are also collecting novel measures of efficacy including color brightness (CoBri) testing and functional magnetic resonance imaging (fMRI) testing for the recently enrolled and currently enrolling pediatric patients. These additional tests may further support the patient anecdotal reports and the existing evidence of biologic activity of our ACHMB3 program.

For our ACHMA3 program, we are focused on analysis of the data from pediatric patients in the Phase 1/2 trial. Preclinical animal data showed a treatment effect in young sheep, which might predict comparable treatment responses in younger pediatric Phase 1/2 patients despite the genetic considerations described above. The path forward for our ACHMA3 product candidate will be determined after additional pediatric patient and preclinical data are available for evaluation.

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We recently enrolled six pediatric ACHMB3 patients and five pediatric ACHMA3 patients in higher dose groups 5a and 6a. Three serious adverse events (SAEs) of significant inflammation that are considered a Suspected Unexpected Serious Adverse Reaction, or SUSAR, occurred in pediatric patients at the highest trial dose concentration (3.2e12 vg/mL); two patients are in the ACHMA3 trial, the other is in the ACHMB3 trial. An additional ACHMB3 pediatric patient at this dose also presented with significant inflammation during approximately the same post-operative time frame but has not required a subsequent procedure. To address the above safety events in pediatric patients, increased systemic and local steroid doses have been administered, patients are being monitored closely and the investigators are now tapering these patients to lower doses of steroids. As of their most recent visits, all patients are improving. No comparable inflammation has been seen in the six pediatric patients across both trials at dose group 5a, nor in any of the adult patients or lowest group 4 pediatric patients on which we previously reported. These new data do not change our plans to continue development of the ACHM product candidates and, as a result, we plan to release 3-month data for high dose pediatric patients, both ACHMB3 and ACHMA3, in the fourth quarter of calendar year 2021. We are currently postponing enrollment of the last pediatric patient in the ACHMA3 trial pending review of longer-term data for the high dose pediatric patients.

Build-To-Suit Manufacturing and Quality Control Facility in Alachua, Florida

In May 2021, we signed a 20-year lease for a build-to-suit 21,250 square foot current Good Manufacturing Practices (“cGMP”) manufacturing and quality control facility adjacent to our existing Florida facility to prepare for late-stage development of our XLRP and ACHM programs. Leasing this cGMP facility is part of our strategy to enable more rapid filing of a Biologics Licensing Application and commercial launch of our XLRP candidate upon potential FDA approval. The cGMP facility is also expected to support more rapid advancement of our product pipeline while providing supply chain redundancy, reducing manufacturing risk and enhancing quality controls. We anticipate that the build-out of the new manufacturing and quality control facility will be completed during the second half of calendar year 2022.

Additional information regarding our new cGMP manufacturing and quality control facility can be found in Note 3 to the Notes to Financial Statements in the 2021 Form 10-K under the heading “Build-To-Suit Manufacturing and Quality Control Facility in Alachua, Florida.”

Strategic Collaborations

Bionic Sight

During February 2017, we entered into a strategic research and development collaboration agreement with Bionic Sight to develop therapies for patients with visual deficits and blindness due to retinal disease. Through the AGTC-Bionic Sight collaboration, the companies seek to develop a new optogenetic therapy that leverages AGTC’s deep experience in gene therapy and ophthalmology and Bionic Sight’s innovative neuro-prosthetic device and algorithm for retinal coding. The collaboration agreement grants to us, subject to achievement by Bionic Sight of certain development milestones, an option to exclusively negotiate for a limited period of time to acquire: (i) a majority equity interest in Bionic Sight; (ii) the Bionic Sight assets to which the collaboration agreement relates; or (iii) an exclusive license with respect to the product to which the collaboration agreement relates.

In March 2021, Bionic Sight, which has responsibility for conducting the clinical trial, reported promising results in its first two cohorts of patients in the Phase 1/2 retinitis pigmentosa optogenetics study. Bionic Sight reported that these patients, all of whom have complete or near-complete blindness, can now see light and motion, and, in two cases, can detect the direction of motion. The product appears to be safe and well tolerated and Bionic Sight is continuing to enroll patients at higher doses.

Otonomy

During October 2019, we entered into a strategic collaboration agreement with Otonomy to co-develop and co-commercialize an adeno-associated virus-based gene therapy to restore hearing in patients with sensorineural hearing loss caused by a mutation in the gap junction protein beta 2 gene (“GJB2”) – the most common cause of congenital hearing loss. Mutations in GJB2 account for approximately 30% of all genetic hearing loss cases. Patients with this mutation can have severe-to-profound deafness in both ears that is identified in screening tests routinely performed in newborns. Under the collaboration agreement, the parties began equally sharing the program costs and proceeds in January 2020 and can include additional genetic hearing loss targets in the future. We and Otonomy announced promising preclinical data at the American Society of Gene and Cell Therapy meeting in May 2021, demonstrating the rescue of hearing loss and cochlear morphology in two independent mouse models. Collectively, we are conducting IND (investigational new drug)-enabling activities based on pre-IND meeting feedback from the FDA, with an IND filing anticipated in the first half of calendar year 2023.

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Additional information regarding the Bionic Sight and Otonomy collaborative agreements can be found in Note 6 to the Unaudited Condensed Financial Statements included in this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, judgments and methodologies, including those related to accrued expenses and share-based compensation. We base our estimates on historical experience, current conditions, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from our estimates under different assumptions or conditions. Moreover, we may need to change the assumptions underlying our estimates due to risks and uncertainties related to the COVID-19 pandemic or otherwise and those changes could have a material adverse effect on our statements of operations, financial condition and cash flows.

During the three months ended September 30, 2021, there were no significant changes to our critical accounting policies and estimates. For a description of our accounting policies that, in our opinion, involve the most significant application of judgment or involve complex estimations and which could, if different judgments or estimates were made, materially affect our reported results of operations, financial position and cash flows, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the 2021 Form 10-K.

New Accounting Pronouncements

Refer to Note 2 to the Unaudited Condensed Financial Statements included in this Quarterly Report on Form 10-Q for further information about recently issued accounting standards.

Financial Operations Review

Revenue

We generate revenue primarily through: (i) collaboration agreements; (ii) sponsored research arrangements with nonprofit organizations for the development and commercialization of product candidates; (iii) federal research and development grant programs; and (iv) licensing arrangements. However, we did not recognize any revenue during the three months ended September 30, 2021 or the same period in the prior year. In the future, we may generate revenue from product sales (if any products are approved), license fees, milestone payments, development services, research and development grants, or from collaboration and royalty payments for the sales of products developed under licenses of our intellectual property.

We expect that any revenue we generate will fluctuate from quarter to quarter as a result of the timing and amount of license fees, research and development programs, manufacturing efforts and reimbursements, collaboration milestone payments, and the sale of our products, to the extent that any are approved and successfully commercialized. We do not expect to generate revenue from product sales for the foreseeable future, if at all. If we or our collaborators fail to complete the development of our product candidates in a timely manner or obtain regulatory approval for them, our ability to generate future revenue and our results of operations, financial position and cash flows would be materially adversely affected.

Research and development expenses

Research and development expenses consist primarily of costs incurred for the development of our product candidates and include:

• employee-related expenses, including salaries, benefits, travel and share-based compensation expense;

• expenses incurred under agreements with academic research centers, contract research organizations and investigative sites that conduct our clinical trials;

• license and sublicense fees and collaboration expenses;

• the cost of acquiring, developing and manufacturing clinical trial materials; and

• facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies.

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Research and development costs are expensed as incurred. Costs for certain development activities are recognized based on an evaluation of the progress toward completion of specific tasks, using information and data provided to us by our vendors and our clinical sites.

We cannot determine with certainty the duration and completion costs of the current or future clinical trials of our product candidates or if, when, or to what extent we will generate revenue from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates. The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including:

• the scope, rate of progress and expense of our ongoing clinical trials, as well as any additional clinical trials that we are required to, or decide to, initiate and other research and development activities;

• the timing and level of activity as determined by us or jointly with our partners;

• the level of funding, if any, received from our partners;

• whether or not we elect to cost share with our collaborators;

• future clinical trial results;

• uncertainties in clinical trial enrollment rates or drop-out or discontinuation rates of patients;

• increased cost and delay associated with manufacturing or testing issues, including ongoing quality assurance, qualifying new vendors and developing in-house capabilities through, among other things, our lease of a new cGMP build-to-suit manufacturing and quality control facility;

• the countries in which trials are conducted;

• potential additional safety monitoring or other studies requested by regulatory agencies or elected as best practice by us;

• significant and changing government regulation; and

• the timing and receipt of any regulatory approvals.

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development of a product candidate or if we experience significant delays in enrollment in or execution of any of our clinical trials, which could be adversely impacted by the COVID-19 pandemic, we could be required to expend significant additional financial resources and time on the completion of clinical trial activities and development of our product candidates.

From our inception and through September 30, 2021, we have incurred approximately $294.9 million in research and development expenses. We expect our research and development expenses to increase for the foreseeable future as we continue the development of our product candidates, explore potential applications of our gene therapy platform in other indications and execute our plan to open and operate a leased cGMP manufacturing and quality control facility.

General and administrative and other expenses

General and administrative and other expenses primarily consist of salaries and related costs for personnel, including share-based compensation and travel expenses for our employees in executive, operational, legal, business development, finance and human resource functions. Other general and administrative expenses include costs to support employee training and development, board of directors’ costs, depreciation, insurance, facility-related costs not otherwise included in research and development expenses, professional fees for legal services, including patent-related expenses, and accounting, investor relations, corporate communications and information technology services. We anticipate that our general and administrative and other expenses will continue to increase in the future as we hire additional employees to support our research and development efforts, collaboration arrangements, and the potential commercialization of our product candidates, if approved. Additionally, if and when we believe that regulatory approval of our first product candidate appears likely, we anticipate an increase in payroll and related expenses as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of any such product candidate. Our general and administrative expenses are also expected to increase as we execute our plan to open and operate a leased cGMP manufacturing and quality control facility.

19

Investment income, net

Investment income, net consists of interest earned on cash and cash equivalents and held-to-maturity investments in debt securities. During the three months ended September 30, 2021, investment income, net declined by $58,000 when compared to the prior year, primarily due to a smaller investment portfolio in the current period.

Interest expense

Interest expense during the three months ended September 30, 2021 and 2020 was $0.7 million and $0.3 million, respectively. The increase was primarily due to a higher average outstanding balance under our collateralized term loan agreement in the current period. Additional information regarding our long-term loan agreement can be found in Note 5 to the Unaudited Condensed Financial Statements included in this Quarterly Report on Form 10-Q.

Provision for income taxes

The provision for income taxes was $21,000 for the three months ended September 30, 2020, which was entirely attributable to estimated interest and penalties on uncertain tax positions. There was no provision for income taxes during the three months ended September 30, 2021 because, among other things, the Company had no uncertain tax positions in that reporting period.

Results of Operations

Comparison of the three months ended September 30, 2021 and 2020

Research and development expenses

The table below summarizes our research and development expenses by product candidate or program for the periods indicated.

	Three Months Ended September 30,				Increase			% Increase
In thousands	2021		2020		(Decrease)			(Decrease)
External research and development expenses:
XLRP	$	4,651	$	3,860	$	791			20	%
ACHM		793		1,638		(845	)		(52	)%
XLRS		73		93		(20	)		(22	)%
Research and discovery programs		838		501		337			67	%
Total external research and development expenses		6,355		6,092		263			4	%
Internal research and development expenses:
Employee-related costs		3,716		3,222		494			15	%
Share-based compensation		431		317		114			36	%
Other		1,823		1,995		(172	)		(9	)%
Total internal research and development expenses		5,970		5,534		436			8	%
Total research and development expenses	$	12,325	$	11,626	$	699			6	%

External research and development expenses consist of collaboration, licensing, manufacturing, testing and other miscellaneous costs that are directly attributable to our most advanced product candidates and discovery programs. We do not allocate employee-related costs, including share-based compensation, costs associated with broad technology platform improvements or other indirect costs, to specific programs, as they are deployed across multiple projects under development and, as such, are separately classified as internal research and development expenses in the table above.

Research and development expenses for the three months ended September 30, 2021 and 2020 were $12.3 million and $11.6 million, respectively, an increase of $0.7 million, or 6%. The increase was primarily attributable to:

• $0.8 million of increased external spending for our XLRP trials due to planned manufacturing of clinical trial material, clinical site preparation and other activities related to our Skyline and Vista trials;

• $0.5 million of higher employee-related costs primarily attributable to new employee hires in connection with our strategic operating plans;

20

• $0.3 million of increased external spending for our research and discovery programs, which was primarily due to planned material production costs in connection with our preclinical CNS program targeting FTD; and

• $0.1 million of higher share-based compensation costs primarily due to restricted stock units granted to certain employees from May 2021 to July 2021.

Such increases were partially offset by (i) a $0.8 million decrease in external spending for our ACHM clinical trials and (ii) a $0.2 million decrease in other internal research and development expenses, which was primarily due to lower costs for temporary staffing and consultants and laboratory supply costs based on the timing of our needs. The decrease in ACHM expenses was primarily due to reduced site activity as our two clinical studies have progressed to a point where they are no longer processing new site activations. Additionally, there was a decrease in research and development expenses in connection with the wind-down of our X-linked retinoschisis, or XLRS, program.

General and administrative and other expenses

The table below summarizes our general and administrative and other expenses for the periods indicated.

	Three Months Ended September 30,				Increase			% Increase
In thousands	2021		2020		(Decrease)			(Decrease)
Employee-related costs	$	1,221	$	1,239	$	(18	)		(1	)%
Share-based compensation		379		329		50			15	%
Legal and professional fees		422		544		(122	)		(22	)%
Other		2,078		1,324		754			57	%
Total general and administrative and other expenses	$	4,100	$	3,436	$	664			19	%

General and administrative and other expenses for the three months ended September 30, 2021 and 2020 were $4.1 million and $3.4 million, respectively, an increase of $0.7 million, or 19%. Such increase was primarily due to higher operating and business development costs pertaining to our recurring operations as we execute our strategic plans. The increase also reflects the continuation of a similar, but smaller, sequential quarterly growth trend that we experienced during the year ended June 30, 2021. Lower legal fees during the three months ended September 30, 2021 were due to reduced dependence on external legal counsel.

Liquidity and Capital Resources

We have incurred cumulative losses and negative cash flows from operations since our inception and, as of September 30, 2021, we had an accumulated deficit of $256.4 million. It will be several years, if ever, before we have a product candidate ready for commercialization. We expect that our research and development expenses and general and administrative and other expenses will continue to increase and, as a result, we anticipate that we will require additional capital to fund our operations, which we may raise through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements.

Most recently, we received (i) $9.9 million of loan proceeds, net of debt discounts, in May 2021 and (ii) net proceeds of $69.3 million in February 2021 from the underwritten public offering that is described in Note 7 to the Unaudited Condensed Financial Statements included in this Quarterly Report on Form 10-Q. Among other things, the May 2021 loan proceeds are expected to partially fund certain equipment and shared building fit out costs, as well as new employee hires, in connection with our lease and operation of a new cGMP build-to-suit manufacturing and quality control facility in Alachua, Florida. Importantly, through a tenant improvement allowance and tiered rental rates, we have structured our third-party leasing costs for this facility in a way that will not significantly impact our cash runway until the fiscal year ending June 30, 2024. Additional information regarding the new manufacturing and quality control facility and our long-term loan agreement can be found in Notes 3 and 8, respectively, to our financial statements in the 2021 Form 10-K.

We are closely monitoring ongoing developments in connection with the COVID-19 pandemic, which may negatively impact our projected cash position and access to capital. We will continue to assess our cash position and, if circumstances warrant, make appropriate adjustments to our operating plan.

Cash in excess of immediate requirements is invested in accordance with our investment policy, which primarily seeks to maintain adequate liquidity and preserve capital by generally limiting investments to certificates of deposit and investment-grade debt securities that mature within twelve months. As of September 30, 2021, our cash and cash equivalents were held in bank accounts and money market funds.

21

Cash flows

The table below sets forth the primary sources and uses of cash for the periods indicated.

	Three Months Ended September 30,						Increase			% Increase
In thousands	2021			2020			(Decrease)			(Decrease)
Cash provided by (used in):
Operating activities	$	(15,936	)	$	(12,917	)	$	(3,019	)		(23	)%
Investing activities		1,385			6,244			(4,859	)		(78	)%
Financing activities		14			(220	)		234			>100	%
Net decrease in cash and cash equivalents	$	(14,537	)	$	(6,893	)	$	(7,644	)		<100	%

Operating activities. For both the three months ended September 30, 2021 and 2020, cash used in operating activities was primarily the result of research and development expenses and general and administrative and other expenses incurred in conducting normal business operations. Specifically, the cash used in operating activities of $15.9 million during the three months ended September 30, 2021 was due to a net loss of $17.1 million and unfavorable changes in our operating assets and liabilities of $0.3 million, partially offset by non-cash items in our statement of operations of $1.5 million. The cash used in operating activities of $12.9 million during the three months ended September 30, 2020 was due to a net loss of $15.4 million, partially offset by non-cash items in our statement of operations of $1.2 million and favorable changes in our operating assets and liabilities of $1.2 million.

Investing activities. Cash provided by investing activities of $1.4 million during the three months ended September 30, 2021 consisted primarily of cash proceeds of $2.0 million from maturities of investments, partially offset by purchases of property and equipment of $0.5 million and intellectual property costs of $0.1 million. Cash provided by investing activities of $6.2 million during the three months ended September 30, 2020 consisted primarily of cash proceeds of $16.0 million from maturities of investments, net of investment purchases of $9.0 million, partially offset by purchases of property and equipment of $0.7 million and intellectual property costs of $0.1 million.

Financing activities. The nominal cash provided by financing activities during the three months ended September 30, 2021 consisted of proceeds from exercises of common stock options, partially offset by (i) payments for taxes related to equity awards and (ii) principal payments on a finance lease. Cash used in financing activities of $0.2 million during the three months ended September 30, 2020 consisted of (i) payments for deferred financing fees and taxes related to equity awards and (ii) principal payments on a finance lease, partially offset by proceeds from exercises of common stock options.

Operating capital requirements

We have not generated any revenue from product sales and we do not know when, or if, we will generate such revenue. We do not expect to have significant revenue from product sales unless and until we obtain regulatory approval of and commercialize one of our current or future product candidates. We anticipate that we will continue to generate losses for the foreseeable future as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to all of the risks incident in the development of new gene therapy products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

We believe that our available cash and cash equivalents, which totaled $90.5 million on September 30, 2021, will be sufficient to allow us to generate data from our ongoing and planned clinical programs and fund currently planned research and discovery programs into calendar year 2023. However, we will require substantial additional funding to: (i) finish our Vista trial; (ii) move our ACHMB3 product candidate forward; (iii) complete the process necessary to seek regulatory approval for our lead product candidates; (iv) build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize our lead product candidates, if approved; and (v) execute our plan to open and operate a leased cGMP manufacturing and quality control facility.

22

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company, as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide this information.

ITEM 4. CONTROLS AND PROCEDURES

a) Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15e and 15d-15e under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report. Based on this evaluation, our principal executive officer and principal financial officer concluded that these disclosure controls and procedures were effective as of September 30, 2021.

b) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15f and 15d-15f under the Securities Exchange Act of 1934, as amended) during the quarter ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not a party to any pending legal proceedings. However, due to the nature of our business, we may be subject to lawsuits or other claims arising at any particular time in the ordinary course of business, and we expect that this situation will continue to be the case in the future.

ITEM 1A. RISK FACTORS

Refer to Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended June 30, 2021 for information regarding our risk factors. There have been no material changes in our risk factors since June 30, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The table below provides certain information with respect to our purchases of shares of the Company’s common stock during the three months ended September 30, 2021.

Period	Total Number of Shares Purchased (#)		Average Price Paid per Share ($)		Total Number of Shares Purchased Under Announced Programs (#)		Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs ($)
July 1, 2021 through July 31, 2021		—		—		—		—
August 1, 2021 through August 31, 2021		12,616	$	3.58		—		—
September 1, 2021 through September 30, 2021		—		—		—		—
Total		12,616	$	3.58		—		—

The activity in the above table reflects the surrender of 12,616 shares of common stock to the Company to satisfy tax withholding obligations in connection with the vesting of restricted stock units and the issuance of the related common stock to certain employees during the three months ended September 30, 2021.

23

ITEM 6. EXHIBITS

Exhibit Number	Description
3.1	Fifth Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 1, 2014)
3.2	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 1, 2014)
10.1#	Offer Letter, dated as of September 3, 2021, by and between the Company and Jonathan I. Lieber (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 8, 2021 (File No. 001-36370))
31.1*	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of 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 Rule 13a-14(a) or Rule 15d-14(a) of 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 and 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 – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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*	The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101

* Filed herewith.

** Furnished herewith.

# Management contract or compensatory plan or arrangement.

24

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

APPLIED GENETIC TECHNOLOGIES CORPORATION (Registrant)
By:	/s/ Jonathan I. Lieber
	Jonathan I. Lieber, Chief Financial Officer
	Date: November 9, 2021

25

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Susan B. Washer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Applied Genetic Technologies Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2021	By:	/s/ Susan B. Washer
		Susan B. Washer
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Jonathan I. Lieber, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Applied Genetic Technologies Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2021	By:	/s/ Jonathan I. Lieber
		Jonathan I. Lieber
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Applied Genetic Technologies Corporation (the “Company”) for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, that, to her or his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2021	By:	/s/ Susan B. Washer
		Susan B. Washer
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: November 9, 2021	By:	/s/ Jonathan I. Lieber
		Jonathan I. Lieber
		Chief Financial Officer
		(Principal Financial Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Applied Genetic Technologies Corporation and will be retained by Applied Genetic Technologies Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	3 Months Ended
	Sep. 30, 2021	Nov. 04, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Amendment Flag	false
Document Period End Date	Sep. 30, 2021
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Entity Registrant Name	APPLIED GENETIC TECHNOLOGIES CORP
Entity Central Index Key	0001273636
Current Fiscal Year End Date	--06-30
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity File Number	001-36370
Entity Tax Identification Number	59-3553710
Trading Symbol	AGTC
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	14193 NW 119th Terrace, Suite 10
Entity Address, City or Town	Alachua
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32615
City Area Code	386
Local Phone Number	462-2204
Title of 12(b) Security	Common Stock
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		42,863,552

XML

Condensed Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021
Current assets:
Cash and cash equivalents	$ 90,515	$ 105,052
Investments		2,000
Prepaid and other current assets	2,871	2,655
Total current assets	93,386	109,707
Property and equipment, net	4,550	4,658
Intangible assets, net	1,303	1,287
Investment in Bionic Sight, LLC	7,969	8,000
Right-of-use assets - operating leases	3,059	3,167
Right-of-use asset - financing lease	23	34
Other assets	121	113
Total assets	110,411	126,966
Current liabilities:
Accounts payable	2,083	1,879
Accrued and other liabilities	14,061	14,500
Lease liabilities - operating	1,121	1,116
Lease liability - finance	26	38
Current portion of long-term debt	4,418	2,181
Total current liabilities	21,709	19,714
Lease liabilities - operating, net of current portion	3,218	3,418
Long-term debt, net of debt discounts and deferred financing fees	15,659	17,727
Other liabilities	300	299
Total liabilities	40,886	41,158
Stockholders' equity:
Preferred stock, par value $0.001 per share, 5,000 shares authorized; no shares issued and outstanding	0
Common stock, par value $0.001 per share, 150,000 shares authorized; 42,913 and 42,835 shares issued; 42,859 and 42,794 shares outstanding at September 30, 2021 and June 30, 2021, respectively	43	43
Additional paid-in capital	326,126	325,245
Treasury stock at cost; 54 and 41 shares at September 30, 2021 and June 30, 2021, respectively	(256)	(211)
Accumulated deficit	(256,388)	(239,269)
Total stockholders' equity	69,525	85,808
Total liabilities and stockholders' equity	$ 110,411	$ 126,966

XML

Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2021	Jun. 30, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	42,913,000	42,835,000
Common stock, shares outstanding	42,859,000	42,794,000
Treasury stock, shares held	54,000	41,000

XML

Condensed Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Revenue:
Total revenue	$ 0	$ 0
Operating expenses:
Research and development	12,325	11,626
General and administrative and other	4,100	3,436
Total operating expenses	16,425	15,062
Loss from operations	(16,425)	(15,062)
Other income (expense), net:
Investment income, net	6	64
Interest expense	(669)	(332)
Total other income (expense), net	(663)	(268)
Loss before provision for income taxes	(17,088)	(15,330)
Provision for income taxes		21
Loss before equity in net losses of an affiliate	(17,088)	(15,351)
Equity in net losses of an affiliate	(31)	(29)
Net loss	$ (17,119)	$ (15,380)
Weighted average shares outstanding:
Basic	42,823	25,818
Diluted	42,823	25,818
Net loss per common share:
Basic	$ (0.40)	$ (0.60)
Diluted	$ (0.40)	$ (0.60)

XML

Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Beginning balance at Jun. 30, 2020	$ 71,016	$ 25	$ (88)	$ 252,519	$ (181,440)
Beginning balance, shares at Jun. 30, 2020		25,793,000	20,000
Share-based compensation expense	646			646
Shares issued under employee plans and related share repurchases	(80)		$ (123)	43
Shares issued under employee plans and related share repurchases shares		67,000	21,000
Net loss	(15,380)				(15,380)
Ending balance at Sep. 30, 2020	56,202	$ 25	$ (211)	253,208	(196,820)
Ending balance, shares at Sep. 30, 2020		25,860,000	41,000
Beginning balance at Jun. 30, 2021	85,808	$ 43	$ (211)	325,245	(239,269)
Beginning balance, shares at Jun. 30, 2021		42,794,000	41,000
Share-based compensation expense	810			810
Shares issued under employee plans and related share repurchases	26		$ (45)	71
Shares issued under employee plans and related share repurchases shares		65,000	13,000
Net loss	(17,119)				(17,119)
Ending balance at Sep. 30, 2021	$ 69,525	$ 43	$ (256)	$ 326,126	$ (256,388)
Ending balance, shares at Sep. 30, 2021		42,859,000	54,000

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Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Operating activities:
Net loss	$ (17,119)	$ (15,380)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense	810	646
Depreciation and amortization	364	381
Investment premium accretion, net		4
Amortization of debt discounts and deferred financing fees	169	82
Reduction in the carrying amount of operating lease right-of-use assets	108	85
Equity in net losses of an affiliate	31	29
Changes in operating assets and liabilities:
Prepaid and other assets	(224)	719
Accounts payable	135	262
Operating lease liabilities	(195)	(167)
Accrued and other liabilities	(15)	422
Cash used in operating activities	(15,936)	(12,917)
Investing activities:
Purchases of property and equipment	(545)	(654)
Purchases of and capitalized costs related to intangible assets	(70)	(106)
Maturities of investments	2,000	16,000
Purchases of investments		(8,996)
Cash provided by investing activities	1,385	6,244
Financing activities:
Proceeds from exercises of common stock options	71	43
Payments for deferred financing fees		(129)
Taxes paid related to equity awards	(45)	(123)
Principal payments on a finance lease	(12)	(11)
Cash provided by (used in) financing activities	14	(220)
Net decrease in cash and cash equivalents	(14,537)	(6,893)
Cash and cash equivalents, beginning of the period	105,052	38,463
Cash and cash equivalents, end of the period	90,515	31,570
Supplemental information:
Costs for purchases of property and equipment included in accounts payable	96
Costs for intangible assets included in accounts payable/accrued and other liabilities	$ 25	$ 37

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Organization and Operations

3 Months Ended

Sep. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Operations

1. Organization and Operations

Applied Genetic Technologies Corporation (the “Company” or “AGTC”) was incorporated as a Florida corporation on January 19, 1999 and reincorporated as a Delaware corporation on October 24, 2003. The Company is a clinical-stage biotechnology company that uses a proprietary gene therapy platform to develop transformational genetic therapies for people suffering from rare and debilitating ophthalmic, otologic and central nervous system diseases.

The Company has devoted substantially all of its efforts to research and development, including clinical trials. The Company has not completed the development of any products. The Company has generated revenue from collaboration agreements, licensing of its intellectual property, sponsored research agreements and grants, but has not generated product revenue to date and is subject to a number of risks similar to those of other early stage companies in the biotechnology industry, including dependence on key individuals, the difficulties inherent in the development of commercially viable products, the need to obtain additional capital necessary to fund the development of its products, development by the Company or its competitors of technological innovations, risks of failure of clinical studies, protection of proprietary technology, compliance with government regulations and the ability to transition to large-scale production of products.

As of September 30, 2021, the Company had (i) an accumulated deficit of $256.4 million and (ii) cash and cash equivalents of $90.5 million. Management believes that there is sufficient funding available to allow the Company to generate data from its ongoing and planned clinical programs and fund currently planned research and discovery programs. While the Company expects to generate some revenue from collaborations, sponsored research agreements, grants and licensing of its intellectual property, management believes that the Company will incur losses for the foreseeable future. The Company has funded its operations to date primarily through public offerings of its common stock and warrants to purchase its common stock, private placements of its preferred stock, collateralized borrowing and collaborations.

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Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying Unaudited Condensed Financial Statements have been prepared in accordance with (i) U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and (ii) the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, such financial statements do not include all the information and footnotes required by U.S. GAAP for a complete set of financial statements. In the opinion of management, the Unaudited Condensed Financial Statements include all adjustments, consisting of normal recurring accruals and other adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows as of and for the periods presented. The accompanying Condensed Balance Sheet as of June 30, 2021 was derived from the Company’s audited financial statements at that date but does not include all of the footnote disclosures required by U.S. GAAP.

The Unaudited Condensed Financial Statements should be read in conjunction with the Company’s audited financial statements and related notes included in its Annual Report on Form 10-K for the year ended June 30, 2021 (the “2021 Form 10-K”). The Company’s significant accounting policies are described in Note 2 to the Notes to Financial Statements in the 2021 Form 10-K and are updated, as necessary, in subsequent Form 10-Q filings.

The Company’s fiscal year is the twelve-month period from July 1 to June 30. The results of operations for the three months ended September 30, 2021 are not necessarily indicative of the Company’s operating results for the full year ending June 30, 2022 or any subsequent interim period within that year.

Management views the Company’s operations and manages its business as one segment.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP and guidelines from the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during reporting periods. Actual results could differ from those estimates.

Income Taxes

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Interest and penalties related to uncertain tax positions are reflected in the provision for income taxes.

The Company’s provision for income taxes was $21,000 for the three months ended September 30, 2020, which was entirely attributable to estimated interest and penalties on uncertain tax positions. There was no provision for income taxes during the three months ended September 30, 2021 because, among other things, the Company had no uncertain tax positions in that reporting period.

Net income or loss per share

Basic net income or loss per share is calculated by dividing net income or loss by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net income or loss per share is calculated by adjusting the weighted average shares outstanding for the dilutive effects of common stock equivalents outstanding during the period, determined using the treasury stock method. For purposes of diluted net income or loss per share calculations, warrants to purchase the Company’s common stock, stock options, restricted stock awards, restricted stock units and performance service awards are considered to be common stock equivalents if they are dilutive. The dilutive impact of common stock equivalents for the three months ended September 30, 2021 and 2020 was approximately 0.2 million and 0.5 million shares, respectively. However, those common stock equivalents were excluded from the calculations of diluted net loss per share for all periods presented herein because their effects were anti-dilutive.

The common stock equivalents for the three months ended September 30, 2021 excluded certain warrants to purchase the Company’s common stock, which are described at Note 7 in these Notes to Unaudited Condensed Financial Statements, because the exercise price of such warrants was greater than the average market price of the Company’s common stock during the related period. 

New Accounting Pronouncements

Adopted during the three months ended September 30, 2021

Financial Instruments—Credit Losses

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires that financial assets measured at amortized cost be presented at the net amount expected to be collected and separately measure an allowance for credit losses that is deducted from the amortized cost basis of those financial assets. The Company early adopted the new standard on July 1, 2021; however, it did not have a significant impact on the Company’s financial statements.

Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new standard includes several provisions that simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and increasing consistency and clarity for the users of financial statements. The Company adopted the new standard on July 1, 2021; however, it did not have a significant impact on the Company’s financial statements.

Investments – Equity Securities, Investments – Equity Method and Joint Ventures, and Derivatives and Hedging

In January 2020, the FASB issued ASU No. 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The new standard addresses interactions between the guidance to account for certain equity securities under Accounting Standards Codification (“ASC”) Topic 321, the guidance to account for investments under the equity method of accounting in ASC Topic 323 and the guidance in ASC Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with ASC Topic 825, Financial Instruments. The Company adopted the new standard on July 1, 2021; however, it did not have a significant impact on the Company’s financial statements.

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Share-based Compensation Plans

3 Months Ended

Sep. 30, 2021

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation Plans

3. Share-based Compensation Plans

The Company uses stock options, performance service awards, restricted stock awards and restricted stock units to provide long-term incentives to its employees, nonemployee directors and certain consultants. The Company has two equity compensation plans under which awards are currently authorized for issuance: the 2013 Employee Stock Purchase Plan and the 2013 Equity and Incentive Plan. No awards have been issued to date under the 2013 Employee Stock Purchase Plan and, as such, all of the 128,571 shares previously authorized under that plan remain available for issuance.

Stock Options

Information about the Company’s stock options that do not have performance conditions is provided below.

	Three Months Ended September 30,
	2021					2020
(In thousands, except per share amounts)	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding at the beginning of the period		4,186		$	7.69		3,846		$	7.82
Granted		1,467			3.62		1,016			5.34
Exercised		(24	)		3.00		(12	)		3.70
Forfeited		(234	)		4.27		(136	)		4.29
Expired		(348	)		12.93		(42	)		12.08
Outstanding at the end of the period		5,047		$	6.32		4,672		$	7.35
Exercisable at the end of the period		2,667					2,515
Weighted average fair value of options granted during the period	$	2.55				$	3.89

The fair value of each stock option granted is estimated on the date of grant using a Black-Scholes stock option pricing model. Below are the assumptions that were used when estimating fair value for the periods indicated.

	Three Months Ended September 30,
Assumption	2021			2020
Dividend yield		0.00	%		0.00	%
Expected term		6.00 to 6.25 years			6.25 years
Risk-free interest rate		0.80% to 0.96%			0.30% to 0.39%
Expected volatility		82.51	%		82.60	%

In addition to the stock option activity described above, the Company also granted 100,000 performance-based stock options to a senior officer during July 2019 with an exercise price of $3.91. That award: (i) was issued under the 2013 Equity and Incentive Plan; (ii) has a term of ten years; and (iii) includes six separate tranches with performance criteria that will each vest 25% upon their achievement, with the remaining 75% of the tranche vesting on a monthly basis over a period of three years subsequent to achieving the underlying performance objective (assuming continued service by the awardee). Each tranche represents one-sixth of the total award. If any of the performance criteria are not satisfied, that corresponding tranche will be forfeited. As of September 30, 2021, one of the six performance criteria has been met and one criterion will likely never be met. The Company used a Black-Scholes stock option pricing model to estimate the grant date fair value of each option to be $2.58; however, determining the appropriate periodic share-based compensation expense for this award requires management to estimate the likelihood of the achievement of the performance targets.

Subsequent to September 30, 2021, the Company granted approximately 0.3 million new service-only stock options to its employees, with each such option having an exercise price equal to the closing price of the Company’s common stock on the date of grant. 

Restricted Stock Units

During August 2019, 175,500 restricted stock units with a market-based vesting condition related to the trading price of the Company’s common stock were granted to certain employees under the 2013 Equity and Incentive Plan. Those awards had a weighted average grant date fair value of $2.56. Prior to June 30, 2020, the market condition embedded in the award was met. On August 15, 2021 and 2020, 54,500 and 76,500 restricted stock units vested and the underlying shares were issued to the grantees. A total of

44,500 restricted stock units were forfeited through August 15, 2021 and, subsequent to that date, no restricted stock units with market-based vesting conditions remain outstanding. The fair value of each restricted stock unit awarded was estimated on the grant date using a Monte Carlo simulation pricing model, which incorporated the probability of satisfying the related market-based vesting condition.

From May 2021 to July 2021, the Company granted 579,500 restricted stock units to certain employees under the 2013 Equity and Incentive Plan with a weighted average grant date fair value of $4.16. Those awards generally vest in equal amounts on each of the first and second anniversaries of the date of grant, assuming continuing service by the grantee. As of September 30, 2021, 108,000 restricted stock units have been forfeited. The fair value of each restricted stock unit awarded was determined based on the market value of the Company’s common stock on the date of grant and the related expense is being recognized using a graded vesting schedule that is aligned with the grantees’ vesting dates. No additional restricted stock unit awards are expected to be granted under this program.

Share-based compensation expense for the three months ended September 30, 2021 and 2020 was $0.8 million and $0.6 million, respectively. The portion of such expense pertaining to stock options awarded to employees, nonemployee directors and consultants was $0.5 million and $0.6 million for the three months ended September 30, 2021 and 2020, respectively. Share-based compensation expense pertaining to restricted stock awards and restricted stock units awarded to employees and consultants totaled $0.3 million and $54,000 for the three months ended September 30, 2021 and 2020, respectively. 

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Investments and Fair Values of Financial Instruments

3 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Investments and Fair Values of Financial Instruments

4. Investments and Fair Values of Financial Instruments

Cash in excess of immediate requirements is invested in accordance with the Company’s investment policy, which primarily seeks to maintain adequate liquidity and preserve capital. At June 30, 2021, the Company’s investments consisted of a held-to-maturity debt security that matured in July 2021 (the $2.0 million amortized cost of that investment approximated its fair value on such date). The Company held no investments at September 30, 2021.

The Company is required to disclose information regarding all assets and liabilities reported at fair value that enables an assessment of the inputs used when determining the reported fair values. ASC Topic 820, Fair Value Measurements and Disclosures, establishes a hierarchy of inputs used when available. Observable inputs are inputs that market participants would use when pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use when pricing an asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used when determining the reported fair value of financial instruments and is not a measure of an investment’s credit quality. The three levels of the fair value hierarchy are described below.

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable.

To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company when determining fair value is greatest for financial instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Certain assets and liabilities are measured at fair value in the Company’s financial statements or have fair values disclosed in these Notes to Unaudited Condensed Financial Statements. Such assets and liabilities are classified into one of the three levels of the fair value hierarchy. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. The methods and assumptions described below were used to estimate fair values and determine the fair value hierarchy classification of each class of financial instrument held by the Company.

Cash and Cash Equivalents. The carrying value of cash and cash equivalents approximates fair value because the maturities thereof are less than three months.

Debt securities—held-to-maturity. The Company’s investments in debt securities classified as held-to-maturity have historically consisted of U.S. Treasury securities that were valued using quoted market prices. Valuation adjustments were not applied.

The fair value hierarchy table below provides information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis or disclosed at fair value in these Notes to Unaudited Condensed Financial Statements.

In thousands	Level 1		Level 2		Level 3		Total Fair Value
September 30, 2021
Cash and cash equivalents	$	90,515	$	—	$	—	$	90,515
June 30, 2021
Cash and cash equivalents	$	105,052	$	—	$	—	$	105,052
Held-to-maturity investment (U.S. Treasury security)		2,000		—		—		2,000
Total assets	$	107,052	$	—	$	—	$	107,052

The Company’s financial instruments also include its variable-rate borrowing under a debt agreement that is described at Note 5 in these Notes to Unaudited Condensed Financial Statements. Management believes that the carrying amount of such debt (i.e., $20.1 million and $19.9 million at September 30, 2021 and June 30, 2021, respectively) reasonably approximates its fair value on those dates because the rate of interest on such borrowing reflects current market rates of interest for similar instruments with comparable maturities and risk profiles. This assessment primarily uses Level 2 inputs under the fair value hierarchy.

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Debt

3 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Debt

5. Debt

The following discussion of the Company’s debt should be read in conjunction with Note 8 to the Notes to Financial Statements in the 2021 Form 10-K.

On June 30, 2020, the Company entered into a Loan and Security Agreement (as amended effective May 13, 2021, the “Amended Loan Agreement”) with several banks and other financial institutions or entities from time to time parties to the Amended Loan Agreement (collectively, referred to as the “Lenders”) and Hercules Capital, Inc., in its capacity as administrative agent and collateral agent for itself and the Lenders.

The Amended Loan Agreement provides for a term loan in an aggregate principal amount of up to $25.0 million to be delivered in multiple tranches (the “Term Loan”). The first two tranches under the Amended Loan Agreement consisted of term loan advances of $10.0 million on each of June 30, 2020 and May 13, 2021. Subject to the Lenders’ investment committee’s sole discretion, the Company has the right to request that the Lenders make additional term loan advances in an aggregate principal amount of up to $5.0 million prior to April 1, 2022 or, if certain conditions are satisfied, then prior to January 1, 2023. However, there can be no assurances that any additional term loan advances will be funded by the Lenders in the future.

As of both September 30, 2021 and June 30, 2021, the variable contractual interest rate on the Term Loan was 9.75% per annum and the effective interest rate on the Term Loan was 13.26%. Prior to completing the loan amendment in May 2021, the effective interest rate on the Term Loan was 13.53%.

As of September 30, 2021, the Company was in full compliance with all covenants of the Amended Loan Agreement.

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Collaboration Agreements and Contract Liabilities

3 Months Ended

Sep. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Collaboration Agreements and Contract Liabilities

6. Collaboration Agreements and Contract Liabilities

Bionic Sight

On February 2, 2017, the Company entered into a strategic research and development collaboration agreement with Bionic Sight, LLC (“Bionic Sight”) to develop therapies for patients with visual deficits and blindness due to retinal disease. Through the AGTC-Bionic Sight collaboration, the companies seek to develop a new optogenetic therapy that leverages AGTC’s deep experience in gene therapy and ophthalmology and Bionic Sight’s innovative neuro-prosthetic device and algorithm for retinal coding. The collaboration agreement grants to AGTC, subject to achievement by Bionic Sight of certain development milestones, an option to exclusively negotiate for a limited period of time to acquire: (i) a majority equity interest in Bionic Sight; (ii) the Bionic Sight assets to which the collaboration agreement relates; or (iii) an exclusive license with respect to the product to which the collaboration agreement relates.

Under the agreement, AGTC made an initial $2.0 million payment for an equity interest of approximately 5% in Bionic Sight. During March 2020, the Company’s equity interest in Bionic Sight increased to approximately 15.5% in connection with (i) AGTC’s purchase of additional equity for $4.0 million and (ii) the conversion of certain AGTC-provided research and development support costs and in-kind contributions, which aggregated approximately $2.2 million, to an equity interest in Bionic Sight, in each case, consistent with the provisions of the collaboration agreement. AGTC is not obligated to purchase additional equity in Bionic Sight or make any additional in-kind contributions under the agreement. The Company recorded its initial investment in Bionic Sight using the equity method of accounting for investments. Upon receipt of additional equity in March 2020, management concluded that equity method accounting remained appropriate.

Otonomy, Inc.

During October 2019, the Company entered into a strategic collaboration agreement with Otonomy, Inc. (“Otonomy”) to co-develop and co-commercialize an adeno-associated virus-based gene therapy to restore hearing in patients with sensorineural hearing loss caused by a mutation in the gap junction protein beta 2 gene (“GJB2”) – the most common cause of congenital hearing loss. Mutations in GJB2 account for approximately 30% of all genetic hearing loss cases. People with this mutation can have severe-to-profound deafness in both ears that is identified in screening tests routinely performed on newborns. Under the collaboration agreement, the parties began equally sharing the program costs and proceeds in January 2020 and can include additional genetic hearing loss targets in the future.

The Company concluded that the Otonomy collaboration agreement is within the scope of ASC Topic 808, Collaborative Arrangements (“Topic 808”), which defines collaborative arrangements and addresses the presentation of transactions between the parties in an entity’s statement of operations and the related disclosures. However, Topic 808 does not provide guidance on the recognition of consideration exchanged or accounting for the obligations that may arise between the parties. The Company concluded that ASC Topic 730, Research and Development, should be applied by analogy to payments between the parties during the development activities. As such, payments made to or received from Otonomy for development activities are recorded as research and development expenses. For each of the three months ended September 30, 2021 and 2020, settlement activity between the parties under the Otonomy agreement had an immaterial effect on the Company’s research and development expenses.

Contract Liabilities

As of both September 30, 2021 and June 30, 2021, accrued and other liabilities on the Company’s balance sheets included $374,000 of deferred revenue. In the account balance at June 30, 2021 was $225,000 that was billed to a customer and collected by the Company in July 2021. Management is unable to estimate when the Company will satisfy the performance obligations pertaining to its deferred revenue at September 30, 2021.

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Stockholders' Equity

3 Months Ended

Sep. 30, 2021

Stockholders' Equity Note [Abstract]

Stockholders' Equity

7. Stockholders’ Equity

On February 1, 2021, the Company closed an underwritten public offering of 16,741,573 shares of its common stock, together with accompanying warrants to purchase 8,370,786 shares of its common stock. The combined offering price of each share of common stock and accompanying warrant was $4.45, generating gross proceeds of $74.5 million, before deducting underwriting discounts, commissions and other offering expenses payable by the Company, which totaled $5.2 million.

The warrants have an exercise price of $6.00 per share (subject to certain adjustments), are immediately exercisable and expire on February 1, 2026. The warrants are legally detachable from the common stock that was issued on February 1, 2021 and are separately exercisable by the warrant holders. While the warrants are outstanding (but unexercised), the warrant holders will participate in any dividend or other distribution of the Company’s assets to its common stockholders by way of return of capital or otherwise. As of September 30, 2021, none of the warrants have been exercised.

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Commitments and Contingencies

3 Months Ended

Sep. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Lease Commitment

As of September 30, 2021, the Company had entered into a long-term real property lease agreement that has not yet commenced and, therefore, is not recorded on its balance sheets. This lease, which is discussed in Note 3 to the Notes to Financial Statements in the 2021 Form 10-K under the heading “Build-To-Suit Manufacturing and Quality Control Facility in Alachua, Florida,” requires non-cancelable undiscounted future base rent payments aggregating $26.8 million over twenty years (assuming that the Company does not elect the early termination option).

COVID-19 Pandemic

On January 30, 2020, the World Health Organization (the “WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (“COVID-19”) and the risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. National, state and local governments in affected regions have implemented, and are likely to continue to implement, safety precautions, including quarantines, border closures, increased border controls, travel restrictions, shelter in place orders and shutdowns, business closures, cancellations of public gatherings and other measures. Organizations and individuals are taking additional steps to avoid or reduce infection, including limiting travel and staying home from work.

The worldwide spread of COVID-19 led to a global slowdown of economic activity and decreased demand for a broad variety of goods and services, while also disrupting sales channels and marketing activities and precipitating many corporate bankruptcy filings. As a result of the COVID-19 outbreak, the Company experienced delays in enrollment of pediatric patients in the dose escalation portions of certain of its clinical trials for achromatopsia. Additionally, the latest surge in cases due to a COVID-19 variant has created new challenges for the Company to schedule patients for screening at some sites due to capacity and bandwidth limitations, which has impacted enrollment in at least one of the Company’s clinical trials. The Company could also experience delays resulting from critical follow-up visits required under clinical trial protocols, which could increase the cost of those trials and also impact their expected timelines. Management’s ability to fully interpret the trial outcomes and the ability of certain lab-based employees to perform their jobs due to stay-at-home orders or other restrictions related to COVID-19 could also result in delays and increase the Company’s operating expenses. Furthermore, third-party vendors, such as raw material suppliers and contract manufacturing, testing or research organizations, could also be impacted by COVID-19, which could result in unavoidable delays and/or increases in the Company’s operating costs.

Notwithstanding the rapid development and rollout of certain vaccines, it is unknown: (i) how long the COVID-19 outbreak will continue before the virus, including newly identified strains and variants, is adequately contained; (ii) the severity of the virus; and (iii) the effectiveness of actions to prevent transmission and treat those who have contracted COVID-19. The extent to which the COVID-19 outbreak may impact the Company’s financial condition, results of operations or cash flows is uncertain; however, as of the date of these financial statements, management is not aware of any specific event or circumstance that would require the Company to update its estimates or judgments, or adjust the carrying values of its assets or liabilities. Because future events are subject to change, management’s best estimates and judgments may require future modification. Therefore, actual results could differ materially from current estimates. Management is closely monitoring the evolving impact of the pandemic on all aspects of the Company’s business and periodically evaluates its estimates, which are adjusted prospectively based on such evaluations.

General

From time to time, the Company may be involved in claims and legal actions that arise in the normal course of business. Management has no reason to believe that the outcome of any such legal actions would have a significant adverse effect on the Company’s financial position, results of operations or cash flows.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation

The accompanying Unaudited Condensed Financial Statements have been prepared in accordance with (i) U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and (ii) the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, such financial statements do not include all the information and footnotes required by U.S. GAAP for a complete set of financial statements. In the opinion of management, the Unaudited Condensed Financial Statements include all adjustments, consisting of normal recurring accruals and other adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows as of and for the periods presented. The accompanying Condensed Balance Sheet as of June 30, 2021 was derived from the Company’s audited financial statements at that date but does not include all of the footnote disclosures required by U.S. GAAP.

The Unaudited Condensed Financial Statements should be read in conjunction with the Company’s audited financial statements and related notes included in its Annual Report on Form 10-K for the year ended June 30, 2021 (the “2021 Form 10-K”). The Company’s significant accounting policies are described in Note 2 to the Notes to Financial Statements in the 2021 Form 10-K and are updated, as necessary, in subsequent Form 10-Q filings.

The Company’s fiscal year is the twelve-month period from July 1 to June 30. The results of operations for the three months ended September 30, 2021 are not necessarily indicative of the Company’s operating results for the full year ending June 30, 2022 or any subsequent interim period within that year.

Management views the Company’s operations and manages its business as one segment.

Use of estimates

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP and guidelines from the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during reporting periods. Actual results could differ from those estimates.

Income taxes

Income Taxes

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Interest and penalties related to uncertain tax positions are reflected in the provision for income taxes.

The Company’s provision for income taxes was $21,000 for the three months ended September 30, 2020, which was entirely attributable to estimated interest and penalties on uncertain tax positions. There was no provision for income taxes during the three months ended September 30, 2021 because, among other things, the Company had no uncertain tax positions in that reporting period.

Net income or loss per share

Net income or loss per share

Basic net income or loss per share is calculated by dividing net income or loss by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net income or loss per share is calculated by adjusting the weighted average shares outstanding for the dilutive effects of common stock equivalents outstanding during the period, determined using the treasury stock method. For purposes of diluted net income or loss per share calculations, warrants to purchase the Company’s common stock, stock options, restricted stock awards, restricted stock units and performance service awards are considered to be common stock equivalents if they are dilutive. The dilutive impact of common stock equivalents for the three months ended September 30, 2021 and 2020 was approximately 0.2 million and 0.5 million shares, respectively. However, those common stock equivalents were excluded from the calculations of diluted net loss per share for all periods presented herein because their effects were anti-dilutive.

The common stock equivalents for the three months ended September 30, 2021 excluded certain warrants to purchase the Company’s common stock, which are described at Note 7 in these Notes to Unaudited Condensed Financial Statements, because the exercise price of such warrants was greater than the average market price of the Company’s common stock during the related period.

New Accounting Pronouncements

New Accounting Pronouncements

Adopted during the three months ended September 30, 2021

Financial Instruments—Credit Losses

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires that financial assets measured at amortized cost be presented at the net amount expected to be collected and separately measure an allowance for credit losses that is deducted from the amortized cost basis of those financial assets. The Company early adopted the new standard on July 1, 2021; however, it did not have a significant impact on the Company’s financial statements.

Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new standard includes several provisions that simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and increasing consistency and clarity for the users of financial statements. The Company adopted the new standard on July 1, 2021; however, it did not have a significant impact on the Company’s financial statements.

Investments – Equity Securities, Investments – Equity Method and Joint Ventures, and Derivatives and Hedging

In January 2020, the FASB issued ASU No. 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The new standard addresses interactions between the guidance to account for certain equity securities under Accounting Standards Codification (“ASC”) Topic 321, the guidance to account for investments under the equity method of accounting in ASC Topic 323 and the guidance in ASC Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with ASC Topic 825, Financial Instruments. The Company adopted the new standard on July 1, 2021; however, it did not have a significant impact on the Company’s financial statements.

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Share-based Compensation Plans (Tables)

3 Months Ended

Sep. 30, 2021

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Stock Option Activity

Information about the Company’s stock options that do not have performance conditions is provided below.

	Three Months Ended September 30,
	2021					2020
(In thousands, except per share amounts)	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding at the beginning of the period		4,186		$	7.69		3,846		$	7.82
Granted		1,467			3.62		1,016			5.34
Exercised		(24	)		3.00		(12	)		3.70
Forfeited		(234	)		4.27		(136	)		4.29
Expired		(348	)		12.93		(42	)		12.08
Outstanding at the end of the period		5,047		$	6.32		4,672		$	7.35
Exercisable at the end of the period		2,667					2,515
Weighted average fair value of options granted during the period	$	2.55				$	3.89

Stock Option Pricing Model Assumption

The fair value of each stock option granted is estimated on the date of grant using a Black-Scholes stock option pricing model. Below are the assumptions that were used when estimating fair value for the periods indicated.

	Three Months Ended September 30,
Assumption	2021			2020
Dividend yield		0.00	%		0.00	%
Expected term		6.00 to 6.25 years			6.25 years
Risk-free interest rate		0.80% to 0.96%			0.30% to 0.39%
Expected volatility		82.51	%		82.60	%

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Investments and Fair Values of Financial Instruments (Tables)

3 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Schedule of Major Category of Company's Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The fair value hierarchy table below provides information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis or disclosed at fair value in these Notes to Unaudited Condensed Financial Statements.

In thousands	Level 1		Level 2		Level 3		Total Fair Value
September 30, 2021
Cash and cash equivalents	$	90,515	$	—	$	—	$	90,515
June 30, 2021
Cash and cash equivalents	$	105,052	$	—	$	—	$	105,052
Held-to-maturity investment (U.S. Treasury security)		2,000		—		—		2,000
Total assets	$	107,052	$	—	$	—	$	107,052

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Organization and Operations - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021
Summary Of Organization And Operations [Line Items]
Accumulated deficit	$ (256,388)	$ (239,269)
Cash and cash equivalents	$ 90,515	$ 105,052

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Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands, shares in Millions	3 Months Ended
	Sep. 30, 2021 USD ($) Segment shares	Sep. 30, 2020 USD ($) shares
Summary of Significant Accounting Policies [Line Items]
Number of operating segments | Segment	1
Dilutive impact of common stock equivalents | shares	0.2	0.5
Provision for income taxes | $		$ 21

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Share-based Compensation Plans - Additional Information (Detail)				1 Months Ended			3 Months Ended
	Sep. 30, 2021 $ / shares shares	Aug. 15, 2021 shares	May 31, 2021 $ / shares shares	Oct. 31, 2021 shares	Aug. 31, 2019 $ / shares shares	Jul. 31, 2019 $ / shares shares	Sep. 30, 2021 USD ($) Agreement $ / shares shares	Jul. 31, 2021 $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares	Jun. 30, 2021 $ / shares	Aug. 15, 2020 shares	Jun. 30, 2020 $ / shares
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of equity compensation plans | Agreement							2
Stock options granted							1,467,000		1,016,000
Exercise price | $ / shares	$ 6.32						$ 6.32		$ 7.35	$ 7.69		$ 7.82
Grant date fair value | $ / shares							$ 2.55		$ 3.89
2013 Employee Stock Purchase Plan [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based awards issued							0
Number of shares authorized	128,571						128,571
Stock Options [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense | $							$ 500,000		$ 600,000
Stock Options [Member] | Subsequent Event [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options granted				300,000
Restricted Shares Awards [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense | $							$ 300,000		54,000
Restricted stock awards to employees, Granted					175,500
Grant date fair value | $ / shares					$ 2.56
Restricted stock awards vested		54,500									76,500
Six Performance Criteria Based Stock Options [Member] | Senior Executive [Member] | 2013 Equity and Incentive Plan [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options granted						100,000
Exercise price | $ / shares						$ 3.91
Expiration period							10 years
Award vesting period							3 years
Six Performance Criteria Based Stock Options [Member] | Senior Executive [Member] | 2013 Equity and Incentive Plan [Member] | Vesting Period One [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights, percentage						25.00%
Six Performance Criteria Based Stock Options [Member] | Senior Executive [Member] | 2013 Equity and Incentive Plan [Member] | Vesting Period Two [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights, percentage						75.00%
First Performance Criteria Based Stock Options [Member] | Senior Executive [Member] | 2013 Equity and Incentive Plan [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Grant date fair value | $ / shares						$ 2.58
Restricted Stock Units [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense | $							$ 800,000		$ 600,000
Restricted stock awards to employees, Granted								579,500
Restricted stock awards to employees, forfeited	108,000	44,500
Restricted Stock Units [Member] | 2013 Equity and Incentive Plan [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock awards to employees, Granted			579,500
Grant date fair value | $ / shares			$ 4.16					$ 4.16
Restricted Stock Units [Member] | Market Based Vesting Conditions [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation arrangement,Number of awards outstanding		0

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Share-based Compensation Plans - Summary of Stock Option Activity (Detail) - $ / shares shares in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Outstanding Beginning Balance, Shares	4,186	3,846
Granted, Shares	1,467	1,016
Exercised, Shares	(24)	(12)
Forfeited, Shares	(234)	(136)
Expired, Shares	(348)	(42)
Outstanding Ending Balance, Shares	5,047	4,672
Exercisable, end of period, Shares	2,667	2,515
Weighted average fair value of options granted during the year	$ 2.55	$ 3.89
Outstanding Beginning Balance, Weighted Average Exercise Price	7.69	7.82
Granted, Weighted Average Exercise Price	3.62	5.34
Exercised, Weighted Average Exercise Price	3.00	3.70
Forfeited, Weighted Average Exercise Price	4.27	4.29
Expired, Weighted Average Exercise Price	12.93	12.08
Outstanding Ending Balance, Weighted Average Exercise Price	$ 6.32	$ 7.35

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Share-based Compensation Plans - Stock Option Pricing Model Assumption (Detail)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield	0.00%	0.00%
Expected term		6 years 3 months
Expected volatility	82.51%	82.60%
Minimum [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term	6 years
Risk-free interest rate, minimum	0.80%	0.30%
Maximum [Member]
Share-Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term	6 years 3 months
Risk-free interest rate, maximum	0.96%	0.39%

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Investments and Fair Values of Financial Instruments - Schedule of Major Category of Company's Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value on a Recurring Basis [Member] - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		$ 107,052
Cash and Cash Equivalents [Member]
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	$ 90,515	105,052
US Treasury Securities [Member]
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		2,000
Quoted Prices in Active markets (Level 1) [Member]
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		107,052
Quoted Prices in Active markets (Level 1) [Member] | Cash and Cash Equivalents [Member]
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	$ 90,515	105,052
Quoted Prices in Active markets (Level 1) [Member] | US Treasury Securities [Member]
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		$ 2,000

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Investments and Fair Values of Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021
Fair Value Disclosures [Abstract]
Carrying amount of long-term debt, net of unamortized deferred financing costs and debt discounts	$ 20,100	$ 19,900
Debt Securities, Held-to-maturity, Fair Value		$ 2,000
Investments	$ 0
Debt Securities, Maturity, Date	Jul. 31, 2021

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Debt - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2021	Jun. 30, 2021	Jun. 30, 2020
Debt instrument,interest rate	9.75%	9.75%
After Amendment To Loan [Member]
Debt instrument, Effective interest rate	13.26%
Before Amendment To Loan [Member]
Debt instrument, Effective interest rate	13.53%
Term loan [Member]
Debt instrument maximum borrowing capacity			$ 25.0
Long-term Debt, Gross			10.0
Line of credit facility additional borrowing capacity			$ 5.0

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Collaboration Agreements and Contract Liabilities - Additional Information (Detail) - USD ($)			1 Months Ended
	Mar. 31, 2020	Feb. 02, 2017	Oct. 31, 2019	Sep. 30, 2021	Jun. 30, 2021
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Deferred revenue balance					$ 225,000
Deferred revenue				$ 374,000	$ 374,000
Mutations in GJB2 [Member] | Otonomy Inc [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage on mutations in GJB2 account			30.00%
Strategic Research And Development Collaboration Agreement [Member] | Bionic Sight LLC [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Payments to acquire equity interest	$ 4,000,000.0	$ 2,000,000.0
Percentage of investment in equity interest	15.50%	5.00%
Ongoing research and development support costs	$ 2,200,000

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Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Feb. 01, 2021	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Class of Stock [Line Items]
Common stock, shares issued	16,741,573	42,913,000		42,835,000
Maximum number of stocks acquired by outstanding warrants	8,370,786
Common stock, share price	$ 4.45
Aggregate proceeds received	$ 74,500	$ 71	$ 43
Payments of Stock Issuance Costs	$ 5,200
Warrants exercise price	$ 6.00
Warrants expiration date	Feb. 01, 2026
Warrants Exercised		0

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	Sep. 30, 2021 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Non-cancelable undiscounted future base rent payments	$ 26.8
Operating leases, lease terms	20 years