Tango Therapeutics, Inc. — FY2021 Form 10-K
Reporting period: Year ended December 31, 2021; filed March 28, 2022. Tango is a clinical-stage precision oncology company developing therapies based on synthetic lethality. It had no approved products and no product-sales revenue. The August 2021 SPAC business combination and concurrent PIPE financing made Tango a public company; the transaction was accounted for as a reverse recapitalization.
Financial performance and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Total revenue | $37.0 million | $7.7 million |
| Research and development expense | $77.6 million | $50.0 million |
| General and administrative expense | $17.6 million | $9.9 million |
| Operating loss | $58.2 million | $52.2 million |
| Net loss | $58.2 million | $52.0 million |
| Operating cash flow | $(59.5) million | $70.1 million |
| Cash, cash equivalents and marketable securities at year-end | $485.3 million | $190.3 million |
FY2021 revenue comprised $26.0 million of Gilead collaboration revenue and $11.0 million of license revenue, not product sales. Operating loss was about 157% of revenue; the filing does not present a meaningful product gross margin. The company reported an accumulated deficit of $161.3 million. Year-end total assets were $500.2 million, total liabilities $155.4 million, and current assets $492.3 million versus current liabilities $40.7 million. No borrowings or debt are disclosed in the supplied financial statements; deferred collaboration revenue is a major liability.
Cash from financing was $357.3 million, mainly reflecting $326.3 million of net proceeds from the business combination and PIPE, plus $30.0 million from preferred-stock issuance. Investing cash use was $183.4 million, largely reflecting purchases of marketable securities. Management expected year-end cash, equivalents and marketable securities to fund operations and capital needs at least into the second half of 2024, subject to assumptions and potential changes in spending.
Material changes versus FY2020
- Revenue increased $29.4 million, principally due to greater Gilead collaboration revenue and an $11.0 million program license in 2021.
- Research and development expense rose $27.6 million, driven mainly by external research/CRO costs, lab supplies, personnel and program advancement.
- General and administrative expense increased $7.7 million, including higher personnel-related and professional-service costs as the company became public.
- Net loss widened by $6.3 million. Operating cash flow shifted from $70.1 million provided to $59.5 million used; FY2020 cash flow benefited from Gilead’s $125.0 million upfront payment.
- Cash, equivalents and marketable securities rose to $485.3 million following the 2021 financing transactions. Shares outstanding increased materially with the business combination and PIPE.
Programs, outlook and principal risks
- TNG908: PRMT5 inhibitor for MTAP-deleted tumors. The FDA cleared its IND and granted Fast Track designation in Q1 2022, after the reporting period. Tango planned to start a Phase 1/2 trial in Q2 2022 and expected preliminary safety and efficacy data in H1 2023. Reported selectivity and tumor regressions are preclinical findings, not clinical evidence.
- Target 3: Preclinical program intended to reverse immune evasion associated with STK11 loss. Management expected a development candidate in Q2 2022 and an IND filing in 2023.
- USP1: Preclinical program for BRCA1/2-mutant cancers, including potential use with PARP inhibitors. Management anticipated a development candidate in H2 2022 and an IND filing in 2023.
- Management expected continued significant losses and increasing R&D spending. The company may need substantial additional capital; financing could dilute shareholders or require licensing rights on unfavorable terms.
- Key risks include unproven clinical efficacy and safety, trial enrollment and regulatory delays, biomarker/diagnostic challenges, competition, and dependence on CROs and contract manufacturers. TNG908 supply for its planned trial relied on one manufacturer. The filing also cites potential disruption to a preclinical chemistry vendor in Ukraine following Russia’s invasion.
- Next-generation PRMT5 compounds could be selected over TNG908 if further evaluation supports their promise; management warned this could delay development by approximately 12–18 months. COVID-19 was not materially affecting the business at filing, but could disrupt trials or vendors.
- Gilead had licensed two programs and research-extended two. Tango remained eligible for potential milestones and royalties, but payment depends on future events; Gilead may terminate the collaboration in specified circumstances or for convenience.
- No material litigation was pending or threatened, and management reported disclosure controls and internal control over financial reporting effective at December 31, 2021. The independent auditor did not provide an internal-control attestation because Tango qualified as an emerging growth company.
Most important facts for investors to verify
- Whether TNG908’s Phase 1/2 trial began on schedule and whether subsequent human safety, dosing and efficacy data support the preclinical rationale.
- Actual cash burn, R&D spending and runway against management’s estimate extending into H2 2024, including the effect of the new Boston lease and clinical-trial costs.
- Progress and timing for Target 3 and USP1 candidate selection and IND filings, and whether program timelines have changed.
- Gilead program status, recognized versus deferred collaboration revenue, remaining obligations, and the conditions attached to potential milestones and royalties.
- Manufacturing diversification and clinical supply readiness, as well as any interruption to CRO, vendor or trial-site work.
- Patent prosecution and freedom-to-operate developments: the filing states that no patents had yet been granted in the two patent families covering TNG908.