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Transcode Therapeutics, Inc. (RNAZ)·Q3 2023 Earnings Summary

Executive Summary

  • Dosed first patient in Phase 0 microdose trial of TTX‑MC138; preliminary imaging showed accumulation in metastatic lesions with no adverse reactions reported, a key validation of delivery platform .
  • Strengthened liquidity via September public offering (~$8.5M gross; ~$7.0M net), increasing quarter‑end cash to $7.5M and extending runway into January 2024, up from prior guidance of September 2023 .
  • Operating loss widened year over year on higher R&D spend tied to clinical and IND‑enabling activities; grant income declined vs Q3’22 as project timing shifted .
  • Additional preclinical wins: non‑human primate PK/PD engagement (July) and GBM tumor delivery/target engagement (September), reinforcing platform’s translational potential .
  • Near‑term stock catalysts: Phase 0 dataset roll‑out, IND submission for Phase I, and Nasdaq listing compliance path; Panel granted extension to Jan 22, 2024 for equity compliance; minimum bid deficiency notice received Nov 9, 2023 .

What Went Well and What Went Wrong

What Went Well

  • “We were excited to dose our first patient in our Phase 0 clinical trial with TTX‑MC138… Preliminary data showed radioactivity consistent with accumulation of TTX‑MC138 in regions of metastatic lesions… The patient tolerated the dosing with no reported adverse reactions.” — Management .
  • Encouraging GBM preclinical data: IV delivery to brain tumors with significant inhibition of miR‑10b, supporting broader CNS applicability .
  • Non‑human primate study demonstrated long circulation half‑life and significant target inhibition, supporting human PK assumptions and hepatic clearance profile .

What Went Wrong

  • Operating loss increased to $5.3M from $4.3M YoY; grant income fell sharply YoY as project draw timing shifted, pressuring net loss .
  • Cash runway remains short despite financing, with guidance only into January 2024, underscoring continuing capital needs and going‑concern risk .
  • Ongoing Nasdaq compliance issues (stockholders’ equity and minimum bid) create listing uncertainty into 1H24, a potential overhang .

Financial Results

Quarterly Trajectory (Income Statement and Cash)

MetricQ1 2023Q2 2023Q3 2023
Cash ($USD Millions)$1.62 $3.57 $7.45
Research & Development Expense ($USD Millions)$2.59 $2.97 $3.34
General & Administrative Expense ($USD Millions)$2.31 $2.16 $1.98
Total Operating Expenses ($USD Millions)$4.90 $5.13 $5.33
Operating Loss ($USD Millions)$(4.90) $(5.13) $(5.33)
Grant Income ($USD Thousands)$79 $789 $27
Interest Income ($USD Thousands)$4.8 $0.2 $0.1
Net Loss ($USD Millions)$(4.82) $(4.34) $(5.30)
EPS (Basic & Diluted, $USD)$(0.33) $(3.29) $(1.68)

Q3 Year-over-Year Comparison

MetricQ3 2022Q3 2023
Research & Development Expense ($USD Millions)$3.04 $3.34
General & Administrative Expense ($USD Millions)$1.91 $1.98
Total Operating Expenses ($USD Millions)$4.95 $5.33
Operating Loss ($USD Millions)$(4.95) $(5.33)
Grant Income ($USD Thousands)$655 $27
Net Loss ($USD Millions)$(4.29) $(5.30)
EPS (Basic & Diluted, $USD)$(6.61) $(1.68)

KPIs (Execution and Financing)

KPIQ3 2023 Status
Phase 0 first patient dosed; preliminary delivery confirmed via PET‑MRI; no adverse reactionsAchieved
GBM preclinical: tumor delivery and miR‑10b inhibitionAchieved
Non‑human primate PK/PD engagement (microdose)Achieved
September equity financing (~$8.5M gross; ~$7.0M net)Closed
Cash runway guidanceInto Jan 2024

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash runwayAs of 6/30/2023 (Q2)Sufficient into September 2023 ——
Cash runwayAs of 9/30/2023 (Q3)—Sufficient into January 2024 Raised (extended) due to September net proceeds (~$7.0M)

No revenue, margin, OpEx or tax rate guidance provided in Q3 materials .

Earnings Call Themes & Trends

No earnings call transcript was available for Q3 2023; themes are drawn from filings and press releases.

TopicPrevious Mentions (Q1 & Q2 2023)Current Period (Q3 2023)Trend
R&D execution and clinical progressIRB approval; progressing to Phase 0; IND‑enabling studies near completion First patient dosed; preliminary delivery confirmed; planning IND submission for Phase I Improving
Platform validation (PK/PD, delivery)Preclinical platform background and design; translational aims Non‑human primate PK/PD engagement; GBM delivery and target inhibition Improving
Funding/financingFebruary RDO; June RDO (~$6.1M net) September offering (~$8.5M gross; ~$7.0M net) Improving liquidity
Regulatory/listingReverse split; stockholders’ equity deficiency; hearing scheduled Nasdaq Panel extension to Jan 22, 2024; minimum bid deficiency notice Nov 9, 2023 Mixed (extended, but risks persist)

Management Commentary

  • “We successfully completed a follow‑on public offering in a very difficult biotech market as we continue our clinical study with our lead therapeutic candidate… We were excited to dose our first patient in our Phase 0 clinical trial… for which further enrollment is underway.” — Michael Dudley, President & CEO .
  • “TTX‑MC138 demonstrated a long circulation half‑life… and significantly inhibited miRNA‑10b… We believe these findings are important because cancer stem cells… play a critical role in cancer initiation, metastasis, recurrence, and resistance to therapy.” — Dr. Zdravka Medarova, CTO .

Q&A Highlights

No Q3 2023 earnings call or Q&A transcript was available; no management Q&A clarifications observed in primary sources [ListDocuments earnings‑call‑transcript returned none].

Estimates Context

  • Wall Street consensus EPS and revenue estimates from S&P Global were not retrievable during this analysis window (API daily request limit exceeded). Given pre‑revenue clinical stage status, coverage may be limited. As such, no beat/miss analysis vs consensus is provided [GetEstimates error].

Key Takeaways for Investors

  • Clinical validation catalyst: Phase 0 preliminary delivery signal and tolerability supports platform and de‑risks delivery component; continued enrollment and dataflow are near‑term stock drivers .
  • Liquidity improved but still tight: cash $7.5M with runway only into January 2024; expect additional financing or non‑dilutive grants; monitor dilution risk and deal structure .
  • Preclinical momentum broadens TAM: GBM and NHP data reinforce translational path and potential CNS applications; readouts and IND submission for Phase I could re‑rate risk .
  • Listing risk a watch‑item: Panel extension granted; minimum bid deficiency remains; corporate actions (e.g., further reverse split) or catalysts may be needed to sustain listing .
  • Grant cadence variability impacts reported other income; expect quarter‑to‑quarter swings in grant recognition tied to project timing .
  • Near‑term portfolio/BD optionality: management pursuing strategic partnerships around CRISPR, intracellular delivery, and orphan indications; announcements could provide upside optionality .
  • Trading lens: headlines around Phase 0 enrollment/data, IND acceptance, and Nasdaq decisions likely drive volatility; position sizing should reflect binary clinical milestones and financing path .