Sign in

You're signed outSign in or to get full access.

AT

Alaunos Therapeutics, Inc. (TCRT)·Q3 2023 Earnings Summary

Executive Summary

  • Q3 2023 reflected a strategic pivot: Alaunos reported $0.00 collaboration revenue, a net loss of $8.5M (−$0.04 EPS), and disclosed a Nasdaq staff delisting determination with plans to appeal, while continuing to explore strategic alternatives and extending the cash runway into Q2 2024 .
  • Clinical readout from the TCR‑T Library Phase 1/2 trial showed an 87% disease control rate across eight evaluable patients and a 13% overall response rate, with one NSCLC partial response and six patients achieving stable disease; TCR‑T persistence and tumor infiltration were observed, and safety was manageable (no DLTs/ICANS) .
  • Operating model reset: workforce reduction increased to ~80%, restructuring and impairment charges totaled $1.4M in Q3, and opex fell 22% YoY to $8.7M; cash was $11.9M at quarter‑end and management expects runway into Q2 2024 due to cost actions .
  • Guidance/narrative changed materially: in August and November management confirmed wind‑down of clinical programs and a renewed focus on monetizing the hunTR TCR discovery platform while pursuing strategic transactions (acquisition, merger, reverse merger, asset sale, partnership, capital raises) .
  • Bold near‑term stock catalyst: Nasdaq staff delisting determination (triggered by sub‑$0.10 bid for 10 consecutive days) with appeal planned; potential continued listing pending panel outcome, but delisting would impair liquidity and capital access .

What Went Well and What Went Wrong

What Went Well

  • Clinical signal: 87% disease control rate (1 PR in NSCLC with six months PFS; six stable disease) and 13% ORR in eight evaluable metastatic, refractory solid tumor patients; TCR‑T persistence and tumor infiltration detected, with manageable CRS (Grades 1–3) and no DLTs/ICANS .
  • Cost reductions extended runway: cost‑savings measures and workforce reductions are expected to extend cash runway into Q2 2024, improving near‑term solvency while strategic alternatives are evaluated .
  • Platform progress: hunTR discovered new HLA class I/II restricted TCRs recognizing driver mutations (including KRAS and TP53), expanding potential addressable market and monetization pathways .

What Went Wrong

  • Revenue collapse: collaboration revenue fell to $0 in Q3 (vs. $2.9M in Q3 2022, primarily Solasia‑related), removing a key offset to opex and elevating sensitivity to financing outcomes .
  • Structural headwinds and charges: restructuring costs ($0.4M) and property/ROU impairment ($1.0M) weighed on operating results due to the clinical wind‑down and reprioritization .
  • Listing risk: Nasdaq staff delisting determination following sub‑$0.10 bid; while an appeal is planned, management notes delisting would hinder liquidity, price discovery, and capital‑raising capacity .

Financial Results

Income Statement Summary (USD Thousands; EPS in $ per share)

MetricQ3 2022Q1 2023Q2 2023Q3 2023
Collaboration Revenue$2,911 $0 $4 $0
Research & Development$7,893 $6,504 $5,186 $3,656
General & Administrative$3,282 $3,168 $3,045 $3,578
Restructuring Costs$0 $0 $0 $419
Property & ROU Impairment$0 $0 $0 $1,011
Gain on Lease ModificationN/AN/A$(245) N/A
Total Operating Expenses$11,175 $9,672 $7,986 $8,664
Loss from Operations$(8,264) $(9,672) $(7,982) $(8,664)
Interest Expense$(841) $(853) $(1,068) $0
Other Income, Net$254 $477 $277 $188
Net Loss$(8,851) $(10,048) $(8,773) $(8,476)
Basic & Diluted EPS$(0.04) $(0.04) $(0.04) $(0.04)
Weighted Avg Shares (Basic/Diluted)215,098,995 239,679,352 239,797,574 240,046,026

Notes:

  • Q3 2023 opex down ~22% YoY, driven by lower R&D and offset by restructuring/impairment linked to strategic reprioritization .
  • Interest expense dropped to $0 in Q3 following debt repayment earlier in 2023 .

Selected Balance Sheet Data (USD Thousands)

MetricDec 31, 2022Mar 31, 2023Jun 30, 2023Sep 30, 2023
Cash & Cash Equivalents$39,058 $23,496 $18,317 $11,944
Restricted Cash$13,938 $13,938 $0 $0
Working Capital (ex‑restricted)$15,695 $7,183 $13,726 $8,193
Total Assets$64,937 $48,638 $27,927 $19,440
Total Stockholders’ Equity$38,555 $29,509 $21,650 $13,900

KPIs and Clinical Metrics

KPIQ2 2023Q3 2023
Patients Treated (Evaluable)6 8
Disease Control Rate (%)83% 87%
Overall Response Rate (%)N/A13%
Partial Responses (#)N/A1 (NSCLC)
PFS for PR Patient (Months)N/A6
TCR‑T Persistence Detected (Patients)6 8
TCR‑T Tumor Infiltration (Samples)N/A3
DLTs/ICANSNone None
Workforce Reduction~60% reduction initiated ~80% to date
Cash Runway GuidanceInto Q4 2023 Into Q2 2024

Results vs Wall Street Consensus (S&P Global)

MetricActual (Q3 2023)S&P Global ConsensusSurprise
Collaboration Revenue ($USD)$0 UnavailableN/A
Primary EPS ($)$(0.04) UnavailableN/A

Estimates unavailable from S&P Global at time of writing; comparisons to consensus are not provided.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayFY 2023–2024Into Q4 2023 (Q1/Q2 updates) Into Q2 2024 (Q3 update) Raised (extended)
Operating Cash OutflowsFY 2023$35–$40M (Q1/Q4 guidance) Not reiterated in Q3 PR Maintained previously; not updated in Q3
Clinical Development Plan2023Progress to Phase 2 readiness by YE 2023 Wind‑down of clinical programs announced Aug; confirmed Nov Lowered (program wind‑down)
Workforce Reduction2023~60% reduction (Aug) ~80% to date (Nov) Increased
Nasdaq Listing StatusNov 2023N/AStaff delisting determination; appeal planned New negative development
Strategic Alternatives2023Engage Cantor; explore acquisition/merger/asset sale/partnerships/capital raises Continued exploration of broad alternatives Maintained

Earnings Call Themes & Trends

TopicQ4 2022 (Q‑2)Q1 2023 (Q‑1)Q3 2023 (Current)Trend
R&D ExecutionFirst objective response; IND amendment increased library and streamlined enrollment Accelerated enrollment; cryopreservation; interim data expected in Q3 Clinical programs wind‑down, but trial data reported (87% DCR; persistence/infiltration) Shift from clinical progression to monetization of discovery
ManufacturingCapacity expansion; goal to cut cycle from 26→15 days; cryopreservation implemented Multiple concurrent products; flexible scheduling via cryopreservation Not a focus post wind‑down; operational scale reduced De‑emphasis with restructuring
hunTR / TechnologyAdded TCRs; >10% match rate; multiplexing vision Increased throughput; proprietary TCRs; potential for non‑dilutive capital Discovery continues; new HLA‑restricted TCRs; platform as monetization focus Platform central to strategy
Capital & LiquidityFollow‑on raised; runway into Q4 2023; debt outstanding Prepaid SVB loan; restricted cash released; runway into Q4 2023 Runway extended to Q2 2024 via cost actions; delisting risk disclosed Liquidity preserved; listing risk increased
RegulatoryIND amendments with minimal FDA comments Continued IND flexibility; dose escalation Not addressed beyond trial status Neutral post wind‑down
Strategic AlternativesNot highlightedNot highlightedContinued exploration (acquisition/merger/asset sale/partnerships/capital raises) Elevated priority
Nasdaq ListingNot discussedNot discussedStaff delisting determination; appeal planned New risk factor

Management Commentary

  • “Company continues to explore strategic alternatives… cost‑savings measures taken to date are expected to extend its cash runway into the second quarter of 2024.” (Press release) .
  • “Eight patients… T cells were well‑tolerated… total ORR was 13% and disease control rate was 87%… persistence… detected in all evaluable patients… infiltration… detected in three samples.” (Press release) .
  • “Based on the substantial cost to continue development and the current financing environment, Alaunos announced in August 2023 that it would not pursue any further development of its clinical programs.” (Press release) .
  • “We fully prepaid the remaining amounts owed under our term loan with Silicon Valley Bank… move forward unencumbered by debt.” (Q1 prepared remarks) .
  • “Hunter… has significant advantages… identify novel exclusively owned mutation‑reactive TCRs… potential to generate out‑licensing or partnering opportunities.” (Q1 prepared remarks) .

Q&A Highlights

  • Interim clinical data timing and patient counts: management reaffirmed a multi‑patient Q3 readout (pre‑wind‑down) and flexible dosing design; emphasized IND amendments (combined protocols, eliminated retest, added cryopreservation) to accelerate enrollment .
  • Cash runway and financing: runway to Q4 2023 pre‑wind‑down, opportunistic approach to financing while sensitive to dilution; later extended to Q2 2024 via cost actions .
  • Manufacturing capacity: expanded to two patients per run, cryopreservation boosted scheduling; long‑term goal to reduce cycle time to 15 days via process automation .
  • Multiplexing and partnerships: discussed feasibility of delivering more than one TCR, with hunTR‑enabled IP for potential partnering/non‑dilutive capital .
  • Debt repayment clarity: confirmed restricted cash inclusion in total cash and planned full repayment timeline (since executed) .

Estimates Context

  • S&P Global consensus estimates for Q3 2023 were unavailable at the time of writing; as a result, comparisons vs. consensus are not provided. Given the wind‑down of clinical programs, zero collaboration revenue in Q3, and restructuring/impairment charges, any existing estimates would need to reflect the removal of recurring collaboration revenue and the impact of restructuring on opex/net loss .

Key Takeaways for Investors

  • Strategic pivot reduces cash burn and extends runway into Q2 2024, but also curtails near‑term clinical catalysts; focus shifts to monetizing hunTR via partnerships, out‑licensing, or strategic transactions .
  • Q3 clinical data demonstrate biological activity (87% DCR; 13% ORR; persistence/infiltration), which may support asset value in partnering discussions despite program wind‑down .
  • Operating model reset: deeper workforce reduction (~80%), restructuring ($0.4M) and impairment ($1.0M) signal cost discipline; opex down ~22% YoY, interest expense eliminated post debt repayment .
  • Bold risk factor: Nasdaq staff delisting determination; while appeal may temporarily preserve listing, an adverse panel outcome would impair liquidity and capital‑raising optionality—monitor hearing timeline and outcomes closely .
  • Revenue trajectory: collaboration revenue dropped to $0; absent near‑term revenue streams, thesis rests on strategic alternatives and potential hunTR monetization rather than operating performance .
  • Trading implications (near term): headline risk from listing status and transaction optionality; event‑driven catalysts include panel appeal outcome and any announced strategic transaction or hunTR monetization .
  • Medium‑term: platform IP (new HLA‑restricted TCRs) and TCR‑T biology may underpin value in partnerships; monitor updates on strategic alternatives and any non‑dilutive capital events .
Disclosures:
- Consensus estimates from S&P Global were unavailable at time of writing; no estimate comparisons are presented.

Citations:

  • Q3 2023 press release and 8-K: .
  • Q2 2023 press release (prior quarter): .
  • Q1 2023 press release and call (two quarters back): .
  • Q4 2022 call: .