STOK

Business Context and Reporting Period

Company: Stoke Therapeutics, Inc. (STOK)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Three months ended March 31, 2026
Business Overview: Stoke is a late-stage clinical biotechnology company developing RNA-based medicines to upregulate protein expression. Its lead candidate, zorevunersen (STK-001), is in Phase 3 development for Dravet syndrome. A second candidate, STK-002, is in Phase 1 for Autosomal Dominant Optic Atrophy (ADOA). The company generates revenue primarily through collaboration agreements with Biogen and Acadia Pharmaceuticals.

Key Financial Metrics

Note: Revenue figures are in thousands. Q1 2025 revenue was significantly inflated by a one-time upfront payment recognition from the Biogen agreement.

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased by $152.3 million (96%) compared to Q1 2025. This is primarily due to the recognition of $150.8 million related to the IP license performance obligation from the Biogen agreement in the prior year. Current revenue is driven by ongoing development services.
• Net Loss: The company reported a net loss of $50.0 million in Q1 2026, compared to net income of $112.9 million in Q1 2025. The shift from profit to loss is attributable to the absence of the large upfront revenue recognition and increased operating expenses.
• Operating Expenses: Total operating expenses increased by $12.3 million (26%). R&D expenses rose by $7.0 million, driven by increased personnel costs ($5.1 million) and ADOA program expenses. SG&A expenses increased by $5.3 million due to commercial readiness costs and personnel expenses.
• Liquidity: Cash and marketable securities increased to $411.0 million from $390.9 million, bolstered by $80.7 million in proceeds from a controlled equity offering sales agreement.

Guidance, Outlook, and Risks

• Clinical Progress:
  • zorevunersen (Dravet): The global Phase 3 EMPEROR study is ongoing. Final patient randomization is expected in June 2026, with data anticipated in mid-2027. Commercial preparation is underway for a potential late 2027 U.S. launch.
  • STK-002 (ADOA): The Phase 1 OSPREY study dosed its first patient in February 2026. Dose escalation is expected to continue through 2026 and into early 2027.
• Liquidity Outlook: Management believes current cash resources of approximately $411.0 million will fund operations into 2028. The company expects to continue incurring net losses for the foreseeable future.
• Collaboration Updates:
  • Biogen: Joint development of zorevunersen continues. No milestones have been met as of March 31, 2026.
  • Acadia: The collaboration regarding MECP2 and an undisclosed neurodevelopmental target was terminated in September 2025; rights returned to Stoke. The SYNGAP1 collaboration remains active.
• Key Risks:
  • Failure to achieve clinical endpoints in Phase 3 trials.
  • Regulatory delays or rejections by the FDA or international agencies.
  • Dependence on third-party collaborators for funding and commercialization outside North America.
  • Need for additional capital to fund operations beyond 2028.

Investor Verification Checklist

• Revenue Sustainability: Verify the trajectory of revenue recognition from the Biogen and Acadia agreements, noting the absence of large upfront payments in the current period.
• Cash Burn Rate: Monitor the quarterly net cash used in operating activities ($60.6M in Q1 2026) against the $411M cash balance to validate the "into 2028" runway estimate.
• EMPEROR Trial Timeline: Confirm the June 2026 randomization completion date and mid-2027 data readout expectations, as these are critical value inflection points.
• Acadia Termination Impact: Assess the financial and strategic impact of the terminated MECP2 programs and the reliance on the remaining SYNGAP1 collaboration.
• Equity Dilution: Review the terms of the controlled equity offering sales agreement used to raise $80.7M in Q1 2026 and potential future dilution from the $150M shelf registration.