Stoke Therapeutics, Inc. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023. Unaudited results; balance-sheet comparisons are to December 31, 2022. Stoke is a clinical-stage biotechnology company developing RNA-based medicines using its TANGO platform. It has no approved products and has generated no product-sale revenue.
Financial performance and position
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | $(2.5) million | $3.2 million | $2.7 million | $6.2 million |
| Research and development expense | $20.6 million | $18.4 million | $40.2 million | $36.7 million |
| General and administrative expense | $10.2 million | $10.1 million | $20.4 million | $19.6 million |
| Net loss | $(30.7) million | $(24.7) million | $(53.2) million | $(49.3) million |
| Net loss per share, basic and diluted | $(0.69) | $(0.63) | $(1.23) | $(1.29) |
| Net cash used in operating activities | Not separately provided for the quarter | $(43.2) million | Cash provided: $12.6 million |
Q2 revenue included a $5.3 million cumulative catch-up reversal under the Acadia collaboration after Stoke increased its estimate of the effort and costs required to complete research obligations. This drove reported quarterly revenue below zero.
At June 30, 2023, cash and cash equivalents were $192.1 million and marketable securities were $39.4 million, for $231.4 million in combined liquidity. Total assets were $256.9 million; total liabilities were $66.7 million, including $51.3 million of deferred revenue. The filing reports no credit facility or committed capital source and no debt balance. Accumulated deficit was $350.3 million.
Six-month operating cash use of $43.2 million compares with cash provided of $12.6 million in 2022, when the Acadia collaboration contributed $55.8 million in deferred revenue. Investing activities provided $76.6 million, mainly reflecting $77.6 million of marketable-security sales; financing activities provided $45.1 million, including $44.7 million of net proceeds from the controlled equity offering.
Material changes and outlook
- Year-over-year Q2 net loss widened by $6.0 million. Six-month research and development expense increased $3.5 million, principally due to higher personnel costs and STK-001 program spending. Six-month general and administrative expense rose $0.8 million.
- Management said June 30 liquidity was expected to fund operating expenses and capital needs through the end of 2025, based on its current operating plan and assumptions. The notes also state liquidity is expected to cover at least 12 months from issuance. Stoke expects continued losses and rising research, development, and administrative costs; it may need additional financing.
- In July 2023, after the quarter, Stoke reported positive interim STK-001 safety and efficacy findings from small, open-label Dravet syndrome studies. In pooled Phase 1/2a data, 24 of 74 patients had a drug-related treatment-emergent adverse event; CSF protein elevation, vomiting, and irritability were among the most common. In SWALLOWTAIL, 28 of 44 patients had at least one CSF protein value above 50 mg/dL; one discontinued treatment for elevated CSF protein. The filing cautions that early, small-cohort results may not predict later trials.
- Stoke expected additional STK-001 data in Q1 2024 after completion of the Phase 1/2a studies. The UK-authorized STK-002 Phase 1 study for autosomal dominant optic atrophy was planned to begin in early 2024. Enrollment in the FALCON natural-history study was completed in June 2023.
- The MONARCH study’s partial clinical hold remained in place for multiple STK-001 doses above 45 mg and single doses above 70 mg. The filing identifies clinical safety, efficacy, regulatory approval, patient enrollment, manufacturing, intellectual-property protection, collaboration execution, and access to future capital as significant uncertainties.
Investor verification priorities
- Review the Acadia revenue reversal, updated cost-to-complete assumptions, and the remaining $51.3 million of upfront consideration tied to unsatisfied or partially unsatisfied obligations.
- Assess the underlying STK-001 clinical data, cohort sizes, follow-up, adverse events, and regulatory constraints; distinguish interim open-label findings from evidence of established efficacy.
- Track actual cash burn, financing needs, share dilution, and whether the stated runway through 2025 remains achievable. The ATM offering had produced $44.7 million in net proceeds from approximately 4.6 million shares by June 30, 2023.
- Confirm progress and timing for the STK-002 Phase 1 study and the planned STK-001 data update, and monitor clinical, regulatory, manufacturing, and collaboration risks.