TransCode Therapeutics(US:RNAZ)2022-05-16 11:01RNA Delivery Platform and Therapeutics - The company has developed an RNA delivery platform, the TTX platform, utilizing an iron oxide nanoparticle approved for clinical use, aimed at improving the delivery of RNA therapeutics to tumors [125]. - The lead therapeutic candidate, TTX-MC138, targets microRNA-10b and aims to submit an exploratory IND application for a Phase 0 clinical trial in patients with Stage IV breast cancer [128]. - The TTX platform is designed to overcome stability, efficiency, and immunogenicity issues faced by existing delivery systems, optimizing accumulation in tumor cells [127]. - The TTX platform allows for a modular approach, enabling the adaptation of therapeutic loads for various RNA-based therapies, including RNAi and CRISPR technologies [127]. - The company is exploring LIN28B as a potential target for pancreatic cancer and plans to negotiate licensing if evaluation results meet criteria [131]. - The TTX-MC138 study results suggest effective delivery to metastatic lesions, supporting further clinical evaluation and potential FDA authorization for additional studies [133]. - The company plans to conduct a microdosing Phase 0 trial with TTX-MC138, enrolling 10 patients to measure delivery to metastatic lesions using PET-MRI [137]. - The SBIR Phase II milestone includes the development of a qRT-PCR test for measuring miR-10b expression, which is critical for patient inclusion in the Phase 0 study [142]. - The company plans to continue preclinical studies and initiate clinical trials for TTX-MC138 and other product candidates [145]. - The company aims to expand its proprietary TTX platform to identify additional product candidates and acquire new intellectual property [151]. Financial Performance and Funding - As of March 31, 2022, the company had received gross proceeds of $31.0 million primarily from its IPO and convertible promissory notes, with no products approved for sale or revenue generated from product sales [143]. - The company incurred net losses of $3.5 million and $6.8 million for the three months ended March 31, 2022, and the year ended December 31, 2021, respectively, with an accumulated deficit of $13.8 million as of March 31, 2022 [144]. - The company has not generated any revenue from product sales to date and does not expect to do so in the foreseeable future [153]. - The company expects to receive an additional $2 million under the SBIR Award, although there is no guarantee of receipt, and believes current cash of $16.9 million will fund operations into Q1 2023 [150]. - The company may need substantial additional funding to support ongoing operations and pursue its business strategy, relying on equity sales, debt financing, or collaborations [148]. - The company expects to require additional capital for research, development, and commercialization efforts, raising substantial doubt about its ability to continue as a going concern [183]. - The company has incurred significant operating losses and does not expect to generate revenue from product sales for several years [178]. Expenses and Operational Costs - Research and development expenses are anticipated to increase significantly as the company commences planned clinical trials for TTX-MC138 and other product candidates [158]. - General and administrative expenses are expected to rise as the company increases headcount and prepares for potential commercial activities, including partnerships for product development [165]. - Research and development expenses increased by $1,618 thousand for the three months ended March 31, 2022, compared to the same period in 2021, primarily due to purchases of materials and personnel costs [172]. - General and administrative expenses rose by $1,410 thousand for the three months ended March 31, 2022, compared to the same period in 2021, mainly due to increased costs for liability insurance and personnel [173]. - The company anticipates substantial increases in expenses related to ongoing and planned activities, particularly for clinical trials of TTX-MC138 [180]. Operational Challenges and Impact - The COVID-19 pandemic has impacted the timeline for preclinical studies and clinical trials, contributing to operational disruptions [152]. - The company has engaged a European CMO for the manufacturing of TTX-MC138 and a CRO for IND-enabling studies, indicating progress in product development [159]. Internal Controls and Compliance - The company has identified material weaknesses in its internal control over financial reporting prior to its IPO, which remain unremediated [214]. - The company is classified as an "emerging growth company" and will remain so until it exceeds $1.07 billion in annual revenue or meets other specified criteria [215]. Cash Flow and Investments - Cash used in operating activities was $3,949 thousand for the three months ended March 31, 2022, compared to $522 thousand in the same period of 2021 [190]. - The net cash used in investing activities was $31 thousand for the three months ended March 31, 2022, a decrease from $75 thousand in the same period of 2021 [192]. - As of March 31, 2022, all shares of restricted stock have vested, resulting in no further compensation expense related to restricted stock [203]. Market and Risk Factors - The fair value of derivative liabilities was $0 for the three months ended March 31, 2022, compared to $3,936 thousand in the same period of 2021, as these liabilities were extinguished at the IPO [175]. - The company had no debt outstanding as of March 31, 2022, and therefore is not subject to interest rate risk related to outstanding debt [223]. - There were no foreign currency transaction gains or losses recognized for the three months ended March 31, 2022, and 2021 [224]. - An immediate 10% change in U.S. interest rates would not materially affect the fair market value of the company's investments [222]. - The company has not entered into any foreign currency hedging contracts to mitigate exposure to foreign currency exchange risk [225]. - The company intends to enhance its cybersecurity defenses in response to increasing threats from cyber-attacks [221]. - The company’s financial position and results of operations may be affected by fluctuations in foreign currency exchange rates as it continues to develop its business [225].