Tango Therapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Filed May 11, 2022. Tango is a pre-commercial precision oncology company developing therapies for genetically defined cancers; it has no approved products and no product-sales revenue.
Financial performance and position
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Collaboration revenue | $5.8 million | $6.4 million; down $0.6 million |
| Research and development expense | $24.3 million | $15.0 million; up $9.3 million |
| General and administrative expense | $6.8 million | $3.5 million; up $3.3 million |
| Net loss | $25.2 million | $12.1 million |
| Net loss per share, basic and diluted | $0.29 | $0.29 |
| Net cash used in operating activities | $29.7 million | $13.6 million |
| Cash, cash equivalents and marketable securities | $449.9 million at March 31 | $485.3 million at December 31, 2021 |
Revenue came from the Gilead collaboration, not product sales. The company attributed the year-over-year revenue decline to lower collaboration research costs. R&D growth reflected higher CRO and laboratory costs, program advancement, headcount and compensation; G&A growth mainly reflected personnel-related costs. No gross margin figure is presented. No debt is reported on the balance sheet. Current assets were $460.7 million against current liabilities of $39.2 million; working capital was approximately $421.4 million.
Total assets were $471.5 million and stockholders’ equity was $320.4 million at quarter-end. Accumulated deficit was $186.5 million. Marketable securities had $3.4 million in unrealized losses, recorded in other comprehensive loss; management said it did not intend to sell them before recovery and recorded no impairment. Quarterly comprehensive loss was $27.9 million.
Material changes and liquidity
- Operating expenses rose 69% year over year to $31.1 million, and net loss more than doubled. Operating cash use also increased, primarily with higher program and personnel costs.
- Cash, cash equivalents and marketable securities declined by about $35.4 million from December 31, 2021. Cash, cash equivalents and restricted cash decreased $41.1 million during the quarter.
- The company reported $449.9 million of cash, cash equivalents and marketable securities and estimated these resources would fund operating expenses and capital needs into at least the second half of 2024. This estimate depends on assumptions and could prove shorter.
- Management expects significant and increasing expenses and operating losses for the foreseeable future and says additional financing will be needed. No committed external funding source was disclosed.
- Current deferred revenue related to Gilead was $25.0 million and long-term deferred revenue was $112.0 million. The company reported approximately 5.4 years of expected remaining recognition period for the collaboration obligation.
Pipeline, outlook and key risks
- TNG908: The FDA cleared its IND and granted Fast Track designation in Q1 2022. The Phase 1/2 trial was open for enrollment; patient dosing had not begun as described in the filing. Tango expected enrollment in Q2 2022 and initial safety and efficacy data in the first half of 2023.
- TNG462: Next-generation PRMT5 inhibitor; the company planned to file an IND in the first half of 2023. Tango cautioned that prioritizing it over TNG908 as the lead PRMT5 program could delay the program timeline by approximately 12–18 months. It would exclude glioblastoma based on preclinical blood-brain-barrier findings.
- TNG260: Development candidate targeting an undisclosed synthetic-lethal target in STK11-mutant cancers; an IND filing was planned for 2023.
- USP1 inhibitor: Aimed at BRCA1/2-mutant tumors. The company expected to declare a development candidate in the second half of 2022 and file an IND in 2023; it noted that the IND timeline had previously been extended while improving candidate properties.
- The development plans are forward-looking, subject to substantial scientific, regulatory, enrollment, manufacturing and funding uncertainty. Tango has never completed a clinical trial, and all programs other than TNG908 remained preclinical.
- Operational risks included dependence on third-party CROs and sole-source drug suppliers. The filing said a Ukraine-based chemistry vendor’s work was interrupted following Russia’s invasion, and a Shanghai-based CRO was affected by COVID-19 lockdowns; either could delay development.
- Other principal risks include the uncertain safety and efficacy of novel drug mechanisms, biomarker-based patient identification and trial enrollment, competition in MTA-cooperative PRMT5 inhibitors, potential need for further capital, and limited patent protection. The company reported it had filed patent applications but had no issued patents for its product candidates as of the filing.
- Operating lease commitments shown in the contractual-obligations table totaled $1.1 million, all due within one year under the existing lease. A new Boston lease had not commenced; its fixed annual rent was $5.1 million, increasing 3% annually from the rent commencement date.
- No material legal proceedings were reported. Management concluded disclosure controls and procedures were effective at the reasonable-assurance level, with no material quarterly change in internal control over financial reporting.
Important facts for investors to verify
- Whether TNG908 began dosing and enrolled patients on the stated schedule, and when trial updates and initial data became available.
- Whether planned IND filings for TNG462, TNG260 and USP1 proceeded on schedule, and whether prioritization changes affected TNG908 or the broader PRMT5 program.
- Actual cash burn, investment portfolio values and the duration of the stated runway as clinical and research spending increases.
- Whether the Ukraine- and Shanghai-related vendor disruptions, sole-source supply dependencies or trial-site constraints caused material delays.
- Progress, remaining obligations and revenue-recognition assumptions under the Gilead collaboration, including the conditional research-extension consideration.
- Future financing needs and potential dilution, given ongoing losses, no product revenue and no committed external funding.