TransCode Therapeutics(US:RNAZ)2022-11-14 21:36RNA Delivery and Therapeutics - The company has developed the TTX platform, an RNA delivery system utilizing an iron oxide nanoparticle, aimed at improving the delivery of RNA therapeutics to tumors [121]. - The lead therapeutic candidate, TTX-MC138, targets microRNA-10b and is expected to enter a Phase 0 clinical trial to demonstrate delivery to metastatic lesions in patients with advanced solid tumors [124]. - The company received orphan drug designation for TTX-siPDL1 for pancreatic cancer, which provides seven years of marketing exclusivity upon FDA approval, along with tax credits and fee exemptions estimated to save over $3 million [133]. - The company plans to conduct a microdosing Phase 0 trial with TTX-MC138, enrolling up to 12 patients to measure drug delivery using PET-MRI [132]. - The TTX platform is designed to overcome stability, efficiency, and immunogenicity issues faced by existing delivery systems, optimizing accumulation in tumor cells [123]. - The proprietary delivery mechanism aims to significantly improve outcomes for cancer patients by enhancing the effectiveness of RNA-based therapies [126]. - The company intends to optimize a diagnostic test for detecting miR-10b in blood samples, potentially leading to FDA approval for screening metastasis in various tumor types [128]. - The research published in Cancer Nanotechnology supports the efficacy of the TTX platform in delivering therapeutic candidates to metastatic lesions, indicating a promising path for clinical evaluation [129]. Financial Performance and Projections - As of September 30, 2022, the company had cash of approximately $8.8 million and expects to receive up to an additional $1.8 million under the SBIR Award [142]. - The net losses for the nine months ended September 30, 2022, were approximately $12.4 million, with an accumulated deficit of approximately $22.7 million [138]. - The company has not generated any revenue from product sales and does not expect to do so in the foreseeable future [146]. - The company anticipates incurring significant operating expenses as it transitions to a public company, including legal, accounting, and investor relations costs [139]. - The company has received gross proceeds of approximately $31.5 million from its IPO and borrowings under convertible promissory notes [137]. - The company may need to raise additional capital to support ongoing operations and business strategy, which cannot be assured [140]. - The company has incurred significant operating losses and does not expect to generate revenue from product sales for several years [171]. - The company expects to require additional capital for research, development, and clinical trials, as well as for operations and potential acquisitions [175]. Research and Development Expenses - Research and development expenses are expected to increase substantially as the company commences planned clinical trials for TTX-MC138 and other product candidates [150]. - Research and development expenses increased by $2,051 thousand (approximately 206% increase) for the three months ended September 30, 2022, and by $6,077 thousand (approximately 414% increase) for the nine months ended September 30, 2022, compared to the same periods in 2021 [164]. - The company anticipates significant increases in expenses related to ongoing and planned activities, particularly for clinical trials of TTX-MC138 [173]. Collaboration and Funding - A Fast-Track Small Business Innovation Research award from the National Cancer Institute is expected to provide up to $2,392,845 for a research partnership with Massachusetts General Hospital, with funding milestones achieved in previous years [134]. - The company has committed to fund up to $10 million over five years for a strategic collaboration with MD Anderson, with $500,000 payable in the first year [152]. - The company has budgeted funds for research and development to meet future payment obligations under the collaboration agreement, which do not represent additional spending [187]. - The agreement with MD Anderson is for a term of five years or until the studies are completed, whichever is later, unless terminated for a material breach [187]. Operational Challenges - The impact of the COVID-19 pandemic has affected the timeline for preclinical studies and planned clinical trials [145]. - The company relies significantly on third parties for preclinical studies and clinical trial services, with accrued research and development expenses estimated based on progress towards project completion [191]. - The company has not completed any clinical trials or obtained regulatory approvals for its product candidates [137]. Expenses and Losses - General and administrative expenses rose by $543 thousand (approximately 40% increase) for the three months ended September 30, 2022, and by $3,897 thousand (approximately 229% increase) for the nine months ended September 30, 2022, compared to the same periods in 2021 [165]. - The net loss for the three months ended September 30, 2022, was $4,290 thousand, compared to a net loss of $2,329 thousand for the same period in 2021, representing an increase of $1,961 thousand (approximately 84% increase) [163]. - Cash used in operating activities was $11,743 thousand for the nine months ended September 30, 2022, compared to $3,666 thousand for the same period in 2021, reflecting an increase of $8,077 thousand (approximately 220% increase) [181]. - The total cash decrease for the nine months ended September 30, 2022, was $12,036 thousand, compared to an increase of $21,672 thousand for the same period in 2021 [180]. Market and Risk Factors - The company is classified as an "emerging growth company" and a "smaller reporting company," with annual revenue less than $100 million during the most recently completed fiscal year [202][204]. - The company has identified material weaknesses in its internal control over financial reporting prior to its IPO, which remain unremediated [201]. - The company has taken steps to enhance cybersecurity defenses in response to increasing threats, including phishing attacks [205]. - The company’s primary exposure to market risk is foreign exchange rate sensitivity to the Euro, impacting major purchases [208]. - The company has not recognized foreign currency transaction losses for the nine months ended September 30, 2022, and an immediate 5% change in the Euro exchange rate would not materially affect results [208]. - The company has not entered into any foreign currency hedging contracts to mitigate exposure to foreign currency exchange risk [209]. - An immediate 10% change in U.S. interest rates would not materially affect the fair market value of the company's investments [206]. - The company’s cash is held in checking and savings accounts at major U.S. banks [206].