Stoke Therapeutics, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022; filed March 6, 2023. This is an annual report, not a standalone fourth-quarter report. Stoke is a clinical-stage biotechnology company developing antisense medicines using its TANGO platform. Its lead programs are STK-001 for Dravet syndrome and preclinical STK-002 for autosomal dominant optic atrophy (ADOA).
Financial performance and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $12.4 million | $0 |
| Research and development expense | $77.8 million | $54.2 million |
| General and administrative expense | $38.9 million | $31.9 million |
| Operating loss | $104.4 million | $86.1 million |
| Net loss | $101.1 million | $85.8 million |
| Net loss per share, basic and diluted | $2.60 | $2.34 |
| Net cash used in operating activities | $31.9 million | $66.9 million |
2022 revenue came from the Acadia collaboration, not product sales; Stoke reported no product revenue. The filing does not provide a meaningful product gross margin. R&D and G&A expenses rose year over year, reflecting increased program activity, staffing, and other operating costs. Interest income increased to $3.1 million from $0.1 million.
At year-end, cash and cash equivalents were $113.6 million, marketable securities $116.0 million, and restricted cash $0.6 million: $230.2 million combined. Current assets were $244.1 million and current liabilities $31.4 million. No borrowings or financial debt are reported; operating lease liabilities totaled $5.1 million. Management estimated that year-end liquidity plus $44.7 million of post-year-end ATM proceeds would fund operations and capital requirements through the end of 2025. This is a management estimate dependent on assumptions, not a guarantee.
Operating cash use fell from $66.9 million to $31.9 million, principally because the Acadia agreement generated $51.7 million of deferred revenue in 2022. Investing activities used $45.9 million, largely reflecting net purchases of marketable securities; financing activities provided $46.4 million, including $45.3 million from equity sales. Accumulated deficit reached $297.2 million.
Material changes and business developments
- Revenue began in 2022 under Stoke’s January collaboration with Acadia, which included a $60 million upfront payment. The company recognized $12.4 million as revenue during 2022 and reported $51.7 million of upfront consideration for obligations not yet fully satisfied at year-end.
- R&D expense increased $23.7 million, to $77.8 million. Reported program costs included $25.3 million for STK-001 and $9.1 million for STK-002.
- Net loss widened by $15.3 million, while year-end combined cash, cash equivalents, marketable securities, and restricted cash increased by $9.8 million from 2021.
- After year-end, Stoke sold approximately 4.6 million shares under its sales agreement for net proceeds of $44.7 million, diluting existing shareholders.
Outlook, clinical programs, and key risks
- STK-001: MONARCH (U.S.) and ADMIRAL (U.K.) were ongoing open-label Phase 1/2a studies. Interim pooled data reported reductions in convulsive seizure frequency among some patients, including a 55% median reduction in six patients receiving three 45 mg doses. These are preliminary findings from small, uncontrolled cohorts and do not establish efficacy or disease modification.
- Interim safety findings reported that doses up to 45 mg were generally tolerated; 27% of 55 patients had a study-drug-related treatment-emergent adverse event, all mild or moderate. CSF protein elevation occurred in 18 of 55 patients, without observed clinical manifestations. The FDA partial hold on MONARCH doses above 45 mg remained in place. Management expected preliminary data on 45 mg multiple doses in mid-2023 and 70 mg multiple doses in the second half of 2023.
- STK-002: In preclinical development for ADOA. The company said it submitted a U.K. clinical trial authorization in early 2023 and expected, subject to regulatory approval, to begin a Phase 1/2 trial in 2024.
- Acadia collaboration: Covers SYNGAP1, MECP2/Rett syndrome, and an undisclosed target. Stoke is eligible for up to $907.5 million in potential milestone payments, plus royalties on certain programs; these amounts are contingent and not assured. SYNGAP1 costs and global profits are shared equally under the agreement.
- Stoke expects continued operating losses and rising R&D and administrative expenses, and may require additional financing. Key risks include clinical or regulatory failure, trial enrollment and safety issues, manufacturing and third-party dependence, intellectual-property and collaboration risks, competition, and uncertain reimbursement.
- The filing states that Stoke gave notice in February 2023 to terminate its CSHL license agreement and did not expect a material effect on current candidates or TANGO development. Investors should verify the termination’s completion and its effect on the company’s rights.
Most important facts for investors to verify
- Whether subsequent STK-001 trial results confirm the interim seizure reductions and establish a favorable safety profile; note the open-label design, small cohorts, and remaining dose restrictions.
- Actual cash burn, future collaboration revenue recognition, and whether the stated runway through 2025 remains valid after clinical spending and financing activity.
- The dilution and terms associated with the post-year-end issuance of approximately 4.6 million shares and any further use of the ATM facility.
- Regulatory progress for STK-002 and whether the expected 2024 trial start is achieved.
- Completion and consequences of the CSHL license termination, and the likelihood and timing of contingent Acadia milestones.