Turnstone Biologics Corp. (TSBX)·Q3 2024 Earnings Summary

Executive Summary

• Q3 results were pre-revenue with net loss of $17.0M and EPS of -$0.74, improving both year-over-year (net loss $17.3M, EPS -$1.00) and sequentially (Q2 net loss $21.3M, EPS -$0.92) .
• Cash, cash equivalents and short-term investments were $45.3M at quarter-end; corporate restructuring and portfolio prioritization extended cash runway into 2Q 2026, adding roughly three quarters versus prior guidance into 3Q 2025 .
• Clinical catalysts: initial STARLING Phase 1 data in MSS mCRC showed 25% ORR, 50% DCR, and a durable complete response with progression-free survival beyond one year; next clinical update expected in 1H 2025 .
• Strategic actions included a 60% workforce reduction, leadership transitions, and narrowed focus on TIDAL-01; one-time severance charge of ~$2.3M expected largely in Q4 2024 .

What Went Well and What Went Wrong

What Went Well

• Early clinical signal in MSS mCRC: 25% ORR and 50% DCR among first four evaluable patients, including a deep and durable CR with PFS >1 year; “we reported initial clinical data…including the achievement of a complete response” (CEO) .
• Operating efficiency improved: G&A fell to $3.9M (-$0.9M YoY) driven by reductions in personnel and professional service costs .
• Cash runway extended into 2Q 2026 via restructuring and portfolio focus; “streamlining operations with cash runway expected to extend into 2Q 2026” .

What Went Wrong

• No collaboration revenue in Q3 (and YTD a normalization from prior-year Takeda-related revenue recognition), keeping reported gross margin and revenue-driven metrics non-meaningful .
• R&D remained elevated given manufacturing, clinical, and regulatory costs for TIDAL-01 despite restructuring actions, with Q3 R&D at $14.4M (+$0.2M YoY) .
• Nasdaq minimum bid price deficiency notice received (below $1 for 30 consecutive business days), with a compliance deadline of March 26, 2025, adding listing overhang until compliance or remedial actions (e.g., potential reverse split) .

Financial Results

Income Statement and EPS (USD Thousands, except EPS)

Year-over-Year Comparison (Three Months Ended September 30)

Balance Sheet (USD Thousands)

Clinical KPIs (Phase 1 STARLING – MSS mCRC)

Note on estimates: We were unable to retrieve S&P Global consensus for TSBX Q3 2024; hence, estimate comparisons are omitted.

Guidance Changes

No revenue, margin, tax rate, OI&E, or dividend guidance was provided in Q3 materials .

Earnings Call Themes & Trends

No Q3 2024 earnings call transcript was found in our document catalog; themes are drawn from press releases/8-Ks.

Management Commentary

• “Earlier this quarter, we announced a corporate restructuring and the decision to focus resources on our Phase 1 program, TIDAL-01…our extended cash runway into the second quarter of 2026 enables us to achieve potential key clinical milestones” — Sammy Farah, President & CEO .
• “We reported initial clinical data from our STARLING trial which showcased durable anti-tumor activity…including the achievement of a complete response…progression-free survival extending beyond one year” — Sammy Farah .
• “We have decided to prioritize our pipeline and sharpen our clinical focus…streamline our team…extend our cash runway by three additional quarters” — Sammy Farah .

Q&A Highlights

No Q3 2024 earnings call transcript was available in our catalog, so Q&A themes and clarifications could not be assessed [Search attempted; none found].

Estimates Context

• S&P Global consensus for Q3 2024 EPS and revenue was not available for TSBX via our data tools; as a result, estimate-based beat/miss analysis is omitted.
• Given pre-revenue status and the development-stage profile, Street models may focus on cash runway, operating spend trajectory, and clinical milestones rather than near-term revenue.

Key Takeaways for Investors

• Operating discipline evident: sequential improvement in net loss and EPS with G&A down YoY; operating spend expected to benefit from restructuring, though R&D remains driven by TIDAL‑01 manufacturing and clinical costs .
• Cash runway extended into 2Q 2026 is a material de-risking event for funding near-term clinical milestones without immediate financing, a key support for equity value in development-stage biotech .
• Clinical upside optionality: MSS mCRC initial data (ORR/DCR/CR durability) and upcoming 1H 2025 clinical update create definable catalysts; ongoing Phase 1 programs in head & neck and uveal melanoma broaden potential .
• Execution KPIs (manufacturing success, target dose achievement) support scalability and reproducibility—critical for TIL therapies’ translational path .
• Listing overhang (Nasdaq minimum bid price deficiency) introduces technical risk; management has options (compliance window, potential reverse split), but investor focus should monitor corporate actions into early 2025 .
• Near-term trading: headlines around SITC data, restructuring milestones, and any interim clinical disclosures may drive volatility; lack of revenue/Street estimates shifts attention to news flow.
• Medium-term thesis: a selection-based TIL approach addressing immunologically “cold” tumors (e.g., MSS mCRC) with durable responses, backed by funding runway and a streamlined organization, positions TSBX for value inflection upon further clinical validation .

Citations: Q3 8-K and press release ; Q2 8-K and press releases ; Q1 8-K and press release ; Restructuring 8-K ; Nasdaq notice 8-K .