Business context and reporting period
TransCode Therapeutics, Inc. is a clinical-stage oncology biotechnology company developing RNA-based therapeutics using its iron-oxide nanoparticle TTX delivery platform. This Form 10-K covers the fiscal year ended December 31, 2023; it does not provide separate fourth-quarter results. The company had no product revenue and had not received approval to market any product.
Lead candidate TTX-MC138 targets microRNA-10b in metastatic cancers. Its Phase 0 first-in-human trial remained open, with one patient dosed. Other programs, including TTX-siPDL1, TTX-RIGA, TTX-CRISPR and TTX-mRNA, were preclinical.
Financial and operating metrics
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $12.264 million | $10.232 million |
| General and administrative expense | $7.155 million | $8.401 million |
| Total operating expenses | $19.419 million | $18.634 million |
| Operating loss | $(19.419) million | $(18.634) million |
| Net loss | $(18.546) million | $(17.565) million |
| Basic and diluted loss per share | $(103.61) | $(1,082.79) |
| Net cash used in operating activities | $(18.075) million | $(15.763) million |
| Net cash provided by financing activities | $15.909 million | $0.006 million |
| Cash at year-end | $2.768 million | $4.968 million |
Gross profit and margins are not applicable because the company had no revenue. At December 31, 2023, current assets were $4.455 million, current liabilities $3.491 million, total liabilities $3.529 million, and stockholders’ equity $1.641 million. The company reported no debt outstanding other than lease liabilities, which totaled $0.451 million. It had an accumulated deficit of $46.416 million.
Material changes versus the prior year
- Net loss widened by approximately $0.981 million. R&D expense rose $2.031 million, primarily from clinical and related costs, consulting, compensation and benefits; G&A expense fell $1.246 million.
- Operating cash use increased by approximately $2.312 million. Year-end cash declined by $2.201 million, despite $15.909 million of net equity proceeds during 2023.
- In December 2023, the company restructured, delayed or eliminated some development activities, and reduced headcount by four, from 19 employees at year-end 2022 to 11 at year-end 2023. Severance expense was $0.425 million.
- Share and per-share information reflects the 1-for-20 reverse split in May 2023 and 1-for-40 reverse split in January 2024. The company reported 5,808,053 common shares outstanding as of March 20, 2024.
Outlook, risks, contingencies and unusual items
- Liquidity and going concern: Management said year-end cash plus approximately $6.2 million of net proceeds from the January 2024 offering was expected to fund operations into late Q3 or early Q4 2024. Management and the auditor stated that substantial doubt exists about the company’s ability to continue as a going concern without additional capital; the auditor’s report includes a going-concern explanatory paragraph.
- Clinical development: The company reported preliminary Phase 0 imaging evidence consistent with TTX-MC138 accumulation in metastatic lesions and no adverse reactions in the single dosed patient. The study is not designed to establish efficacy, and the company said full data analysis was in process. It had submitted an IND for a Phase I/II trial and expected FDA review to be completed in Q2 2024; this was an expectation, not an approval.
- Financing and dilution: The January 2024 offering generated approximately $6.2 million net and included common stock, pre-funded warrants and warrants. The company expects further funding will be needed; additional equity could dilute shareholders.
- Nasdaq listing: The company regained compliance with Nasdaq’s stockholders’ equity requirement in January 2024, with a panel monitor through January 26, 2025. It separately faced a minimum-bid-price deficiency with a May 6, 2024 deadline; the filing said the post-split bid had not met the required ten consecutive business days at the time reported.
- Collaboration and commitments: The company had committed up to $10 million over five years to MD Anderson, but was renegotiating planned work and payments. It stated no further payments were due until terms were renegotiated and work began. Future amounts and timing were uncertain.
- Controls and litigation: Management concluded internal control over financial reporting and disclosure controls were ineffective due to material weaknesses that remained unremediated. The company also disclosed a disputed investment-bank fee claim; it said it rigorously disputes the claim.
- Other risks: The company is dependent on external manufacturers and clinical-service providers, has no commercial products or sales infrastructure, and faces substantial clinical, regulatory, intellectual-property and capital-raising risks. Management changed in January 2024: the former CEO resigned and the CFO became interim CEO.
Important facts for investors to verify
- Current cash, actual spending and updated runway, including whether additional financing is available and on what terms.
- FDA status and timing for the TTX-MC138 Phase I/II IND, and complete Phase 0 imaging, pharmacokinetic and safety findings.
- Nasdaq minimum-bid-price compliance and continued compliance with the stockholders’ equity requirement.
- Terms and obligations resulting from MD Anderson negotiations, and any resulting research or clinical commitments.
- Progress in remediating the disclosed internal-control weaknesses, and the status and potential exposure of the disputed investment-bank fee claim.
- Fully diluted share count and potential dilution from the January 2024 offering warrants and other outstanding equity awards or warrants.