UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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 March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-41747 Turnstone Biologics Corp. (Exact name of registrant as specified in its charter) Delaware 83-2909368 (State or other ju ...

Exhibit 99.1 Turnstone Biologics Corp. Reports First Quarter 2025 Financial Results and Provides Recent Corporate Highlights SAN DIEGO, May 8, 2025 – Turnstone Biologics Corp. ("Turnstone" or the "Company") (Nasdaq-CM: TSBX), a biotechnology company historically focused on the development of a differentiated approach to treat and cure patients with solid tumors by pioneering selected tumor-infiltrating lymphocyte ("Selected TIL") therapy, today reported financial results for the first quarter ended March 31 ...

SAN DIEGO, May 08, 2025 (GLOBE NEWSWIRE) -- Turnstone Biologics Corp. (“Turnstone” or the “Company”) (Nasdaq-CM: TSBX), a biotechnology company historically focused on the development of a differentiated approach to treat and cure patients with solid tumors by pioneering selected tumor-infiltrating lymphocyte (“Selected TIL”) therapy, today reported financial results for the first quarter ended March 31, 2025, and provided recent corporate updates. Corporate Updates In January 2025, Turnstone made the deter ...

Financial Performance - As of December 31, 2024, cash, cash equivalents, and short-term investments totaled $28.9 million, a decrease from $94.8 million in the previous year[4][13] - The net loss for Q4 2024 was $12.9 million, an improvement from a net loss of $16.5 million in Q4 2023, representing a 21.8% decrease[5][11] - Total operating expenses for the year ended December 31, 2024, were $72.5 million, down from $78.3 million in 2023, reflecting a 7.4% reduction[11] - The company reported no collaboration revenue for the year ended December 31, 2024, compared to $19.3 million in 2023[11] Expenses - Research and Development (R&D) expenses for Q4 2024 were $8.2 million, down 39.5% from $13.5 million in Q4 2023[4][5] - General and Administrative (G&A) expenses for Q4 2024 were $3.2 million, a reduction of 27.3% compared to $4.4 million in Q4 2023[5] Assets and Liabilities - Total assets decreased to $40.1 million as of December 31, 2024, from $112.8 million in the previous year[13] - Total liabilities decreased to $8.7 million as of December 31, 2024, down from $14.1 million in 2023[13] Strategic Decisions - The company has decided to discontinue all TIDAL-01 clinical studies and is exploring strategic alternatives to maximize shareholder value[3] Shareholder Information - The weighted-average shares of common stock outstanding increased to approximately 23.1 million in Q4 2024 from 22.9 million in Q4 2023[11]

Core Viewpoint - Turnstone Biologics Corp. reported its financial results for Q4 and the full year 2024, highlighting a strategic shift following the discontinuation of its TIDAL-01 clinical studies and ongoing evaluation of strategic alternatives to maximize shareholder value [1][3]. Financial Highlights - As of December 31, 2024, the company had cash, cash equivalents, and short-term investments totaling $28.9 million, a significant decrease from $94.8 million in 2023 [4][10]. - Research and Development (R&D) expenses for Q4 2024 were $8.2 million, down from $13.5 million in Q4 2023, attributed to corporate restructuring and workforce reduction [4]. - General and Administrative (G&A) expenses for Q4 2024 were $3.2 million, compared to $4.4 million in Q4 2023, reflecting reductions in personnel and professional service costs [5]. - The net loss for Q4 2024 was $12.9 million, an improvement from a net loss of $16.5 million in Q4 2023 [5][8]. - Total operating expenses for the year ended December 31, 2024, were $72.5 million, down from $78.3 million in 2023 [8]. Corporate Updates - In November 2024, the company presented preclinical data on its Selected TIL therapies at the SITC Annual Meeting and clinical data at the SITC TIL Symposium [2]. - The decision to discontinue the TIDAL-01 clinical studies was made in January 2025, leading to a strategic review aimed at maximizing shareholder value [3].

Core Viewpoint - Turnstone Biologics Corp. (TSBX) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook driven by rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Company-Specific Insights - For the fiscal year ending December 2024, Turnstone Biologics Corp. is expected to report earnings of -$3.32 per share, reflecting a 30.5% change from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Turnstone Biologics has increased by 59.7%, indicating a positive trend in earnings outlook [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a 'Strong Buy' or 'Buy' rating, highlighting superior earnings estimate revisions [9][10]. - The upgrade of Turnstone Biologics to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - Turnstone Biologics Corp. has decided to discontinue all clinical studies evaluating TIDAL-01 and halt further development of the program, initiating a strategic review to maximize shareholder value [1][2][3]. Group 1: Business Operations - The decision to discontinue TIDAL-01 is due to the capital-intensive nature of manufacturing for the Selected TIL therapy and the current financial market conditions [2]. - Turnstone has engaged a financial advisor to explore strategic alternatives, which may include acquisition, merger, business combination, sale of assets, licensing, or other transactions [3]. Group 2: Workforce and Cost Management - The company is reducing its workforce and implementing cost-containment and cash conservation measures while retaining essential employees for supporting value realization [4]. Group 3: Acknowledgments - The company expressed gratitude to patients, investigators, collaborators, and team members for their contributions to the clinical development efforts [5]. Group 4: Company Overview - Turnstone Biologics is a clinical-stage biotechnology company focused on treating solid tumors through a differentiated approach using Selected TIL therapy, which aims to improve upon first-generation TIL therapies [6].

Financial Performance - Net loss for the three months ended September 30, 2024, was $17,032,000 compared to a net loss of $17,319,000 for the same period in 2023, showing a slight improvement[11]. - The net loss for the nine months ended September 30, 2024, was $58.0 million, compared to a net loss of $38.8 million for the same period in 2023, indicating a significant increase in losses year-over-year[34]. - Net loss per share attributable to common stockholders improved to $(0.74) for the three months ended September 30, 2024, compared to $(1.00) for the same period in 2023[12]. - Net loss for the nine months ended September 30, 2023, was $57.965 million, compared to a net loss of $38.750 million for the same period in 2022[26]. - The company reported a net loss of $58.0 million for the nine months ended September 30, 2024, compared to a net loss of $38.8 million for the same period in 2023[157]. Assets and Liabilities - Total current assets decreased from $102,554,000 as of December 31, 2023, to $51,143,000 as of September 30, 2024, representing a decline of approximately 50%[8]. - Total liabilities increased slightly from $14,148,000 to $14,843,000, an increase of approximately 5%[9]. - The accumulated deficit increased to $234,723,000 as of September 30, 2024, from $176,758,000 as of December 31, 2023, marking an increase of approximately 33%[9]. - Total stockholders' equity decreased significantly from $98,667,000 as of December 31, 2023, to $43,641,000 as of September 30, 2024, a decline of approximately 56%[9]. - Cash, cash equivalents, and short-term investments decreased to $45.3 million as of September 30, 2024, from $94.8 million as of December 31, 2023[206]. Research and Development - Research and development expenses for the nine months ended September 30, 2024, were $47,944,000, compared to $47,033,000 for the same period in 2023, indicating a year-over-year increase of about 2%[11]. - Research and development expenses increased to $8.044 million for the period ending September 30, 2024, up from $5.675 million for the same period in 2023, representing a growth of approximately 41.8%[71]. - The company plans to significantly increase research and development expenses to support ongoing and future clinical trials, manufacturing processes, and product development[185]. - Research and development expenses for the nine months ended September 30, 2024, were $47.9 million, compared to $47.0 million in 2023, an increase of $0.9 million or 1.9%[200]. Funding and Capital Structure - The company completed its initial public offering (IPO) on July 25, 2023, raising $68.7 million in net proceeds from the sale of 6,666,667 shares at $12.00 per share[29]. - Following the IPO, the underwriters exercised an option to purchase an additional 651,608 shares, generating an additional $7.3 million in net proceeds[29]. - Turnstone has entered into a Loan and Security Agreement for a revolving credit facility of up to $20 million, contingent on achieving specific milestones, including receiving at least $40.0 million in new funding by March 31, 2025[34]. - The company raised approximately $172.0 million from the issuance of convertible preferred stock and $80.0 million from its IPO completed on July 25, 2023[156]. - The company is exploring additional funding through equity offerings, debt financings, and potential collaborations, but faces substantial doubt about its ability to continue as a going concern without securing further capital[33]. Stock and Shareholder Information - The weighted-average number of shares of common stock outstanding increased to 23,037,714 for the three months ended September 30, 2024, from 17,397,845 in the prior year[12]. - The company issued a total of 29,285,356 shares of Series D preferred stock in June 2021 for net proceeds of $79.8 million[117]. - Following the IPO, all outstanding shares of redeemable convertible preferred stock converted into 12,493,879 shares of common stock[118]. - The 2023 Equity Incentive Plan allows for the issuance of up to 1,889,435 new shares, with an additional 712,503 shares from the 2018 Plan and up to 120,949 Returning Shares[125]. Operational Challenges - The company expressed substantial doubt about its ability to continue as a going concern for the next 12 months due to expected operating losses and negative cash flows[203]. - On September 27, 2024, Turnstone received a deficiency notice from Nasdaq due to its common stock closing below the minimum bid price of $1.00 for 30 consecutive business days[31]. - The company has not generated any revenue from product sales and has incurred overall net losses since its inception, indicating a reliance on external funding sources for operations[34]. Collaboration and Agreements - The Company entered into an Alliance Agreement with Moffitt in June 2022, committing to pay at least $17.5 million over five years for research and development services[99][101]. - The Company recognized collaboration revenue related to the Takeda Agreement of $19.3 million for the nine months ended September 30, 2023, compared to $0.0 million for the same period in 2024[91]. - The Takeda Agreement was terminated effective July 6, 2023, resulting in no future collaboration revenue from this source[180].

Financial Position - As of September 30, 2024, cash, cash equivalents, and short-term investments totaled $45.3 million, sufficient to fund operations into Q2 2026[4]. - Turnstone's total liabilities as of September 30, 2024, were $14.8 million, with total stockholders' deficit at $43.6 million[9]. Research and Development - Research and development (R&D) expenses for Q3 2024 were $14.4 million, slightly up from $14.2 million in Q3 2023, primarily due to increased costs related to TIDAL-01 clinical trials[4]. - The STARLING Phase 1 trial of TIDAL-01 reported a 25% overall response rate (ORR) and a 50% disease control rate (DCR) in heavily pre-treated patients with microsatellite stable colorectal cancer[2]. - A complete response was achieved in one patient from the STARLING trial, who has been progression-free for over one year, highlighting the potential of the Selected TIL therapy[2]. - The company plans to share its next clinical update in the first half of 2025, indicating ongoing commitment to advancing its TIL therapy[1]. Operational Changes - General and administrative (G&A) expenses decreased to $3.9 million in Q3 2024 from $4.8 million in Q3 2023, attributed to reductions in personnel and professional service costs[4]. - The company executed a 60% workforce reduction to prioritize the development of the TIDAL-01 program and extend its cash runway[3]. - Turnstone's corporate restructuring aims to sharpen focus on the TIDAL-01 program, enhancing its financial position and achieving clinical milestones[2]. Financial Performance - The net loss for Q3 2024 was $17.0 million, compared to a net loss of $17.3 million in Q3 2023[4].

Core Insights - Turnstone Biologics Corp. has released initial data from its Phase 1 STARLING trial of TIDAL-01 in metastatic microsatellite-stable colorectal cancer (MSS mCRC), leading to a decline in stock price [1] Clinical Data Summary - The initial data from the trial indicates a 25% overall response rate (ORR) and a 50% disease control rate (DCR) among four evaluable MSS mCRC patients [2] - One patient achieved a deep and durable ongoing complete response (CR), with 50% of patients showing sustained clinical benefit [2] - Notable progression-free survival was over one year for the patient with ongoing complete response and six months for a patient with stable disease [2] - The TIDAL-01 process successfully generated high-titer, polyclonal, and multi-epitope tumor neoantigen-reactive T cells that expanded in the patient and correlated with increased CD8 T cell tumor infiltration [2] - The therapy was generally well-tolerated, with safety events consistent with known adverse events associated with the lymphodepletion regimen, IL-2, and pembrolizumab administration [2] Strategic Focus - The clinical development strategy for TIDAL-01 is now concentrated on three high unmet medical need indications: colorectal cancer, head and neck cancer, and uveal melanoma [3] - The trial is currently enrolling patients for these indications, while cutaneous melanoma and breast cancer have been deprioritized [3] Financial Position - As of June 30, 2024, the company reported cash, cash equivalents, and short-term investments totaling $62.4 million, which are expected to fund operations into the third quarter of 2025 [4] - Following the release of the trial data, Turnstone Biologics stock has decreased by 57.53%, trading at 93 cents [4]