Turnstone Biologics (TSBX) - 2024 Q3 - Quarterly Report

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$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].