Stoke Therapeutics, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Financial statements are unaudited. 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-sales revenue.
Financial performance and position
| Metric | Q1 2024 | Q1 2023 / prior year-end |
|---|---|---|
| Revenue | $4.2 million | $5.2 million |
| Research and development expense | $22.4 million | $19.6 million |
| General and administrative expense | $10.2 million | $10.2 million |
| Operating loss | $28.4 million | $24.7 million |
| Net loss | $26.4 million; $0.57 per share | $22.5 million; $0.53 per share |
| Cash used in operating activities | $24.6 million | $21.4 million |
| Cash and cash equivalents | $178.6 million | $191.4 million at Dec. 31, 2023 |
| Total assets / stockholders’ equity | $205.2 million / $140.3 million | $228.3 million / $159.6 million at Dec. 31, 2023 |
Revenue is from the Acadia Pharmaceuticals collaboration, not product sales. Revenue declined about 18% year over year; R&D rose about 14%, primarily reflecting higher STK-001 costs, while G&A was essentially unchanged. Net loss increased about 17%. Operating cash outflow increased about 15%. The company had no marketable securities at quarter-end; it held $9.95 million at year-end 2023. No interest-bearing debt or credit facility is disclosed. Lease liabilities totaled $6.3 million at March 31, 2024.
As of March 31, 2024, accumulated deficit was $428.2 million. Management expects continuing operating losses and cash burn. It estimated that quarter-end cash and cash equivalents, together with $120.3 million in net proceeds from an April 2, 2024 stock-and-pre-funded-warrant offering, would fund operating and capital requirements at least through the end of 2025. The April financing adds potential dilution; the filing reports 5,555,557 shares and warrants for 3,703,730 shares, exercisable at $0.0001.
Programs, outlook, and material risks
- STK-001 / Dravet syndrome: In March, Stoke reported end-of-study data from the open-label MONARCH and ADMIRAL Phase 1/2a studies. The company described reductions in convulsive seizure frequency, and reported clinically meaningful improvements in some cognition and behavior measures in open-label extension analyses. The supplied filing text does not provide clear numerical values for the displayed seizure-reduction results. These findings are preliminary and do not establish confirmatory efficacy.
- Across pooled Phase 1/2a data, 24 of 81 patients had a study-drug-related treatment-emergent adverse event, most commonly CSF protein elevations and procedural vomiting. Eighteen of 81 patients had a serious treatment-emergent adverse event; all were assessed as unrelated to study drug except for one previously reported suspected unexpected serious adverse reaction.
- The FDA allows chronic dosing in SWALLOWTAIL to increase to 45 mg every four months. A partial clinical hold remains for doses above 70 mg in MONARCH and chronic doses above 45 mg in SWALLOWTAIL. Stoke plans discussions with regulators on a potential registrational design using initial 70 mg doses followed by 45 mg maintenance dosing, with an update anticipated in the second half of 2024.
- STK-002 / ADOA: The UK authorized a Phase 1 open-label study, OSPREY; Stoke expected it to start in 2024. Enrollment and dosing had not yet begun, according to the risk-factor disclosure.
- Acadia collaboration: Covers SYNGAP1, MECP2/Rett syndrome, and an undisclosed target. Stoke may receive up to $907.5 million in potential milestone payments and, for certain programs, royalties; these amounts are contingent, not assured. The company reported $46.0 million of upfront consideration associated with unsatisfied or partially unsatisfied performance obligations at quarter-end.
- Runway and funding risk: Stoke expects losses and R&D, G&A, and capital expenditures to increase. Its runway estimate depends on assumptions that may prove wrong; additional capital may be needed, may not be available on acceptable terms, and equity financing can dilute shareholders.
- Other risks and contingencies: Clinical efficacy and safety remain uncertain; rare-disease enrollment, regulatory decisions, manufacturing and third-party dependencies, competition, intellectual-property protection, and reimbursement are material risks. The company reported no material legal proceedings and no off-balance-sheet arrangements. It stated that disclosure controls were effective and that no material change in internal control over financial reporting occurred during the quarter.
Most important facts for investors to verify
- Whether regulators agree to the proposed STK-001 dose and registrational-study approach, and whether the remaining clinical hold is lifted or otherwise affects development.
- The complete seizure-frequency and cognition/behavior data, study populations, missing-data handling, and safety follow-up from MONARCH, ADMIRAL, SWALLOWTAIL, and LONGWING.
- Whether OSPREY starts on schedule and what clinical milestones Stoke sets for STK-002.
- Post-offering cash, actual quarterly cash burn, and whether the stated runway through year-end 2025 remains supported as development spending changes.
- The share count and potential dilution from the April offering and warrants, as well as any further use of the at-the-market program.
- Acadia collaboration progress and the timing and conditions of any milestone payments; potential milestones and royalties should not be treated as committed revenue.