Business Overview and History
Alaunos Therapeutics, Inc. is a pre-clinical-stage cell therapy and obesity therapy-focused company that was historically involved in the development of adoptive TCR therapies, designed to treat multiple solid tumor types in large cancer patient populations with unmet clinical needs. The company’s journey has been marked by both successes and challenges, as it navigates the complex landscape of the biopharmaceutical industry.
Alaunos Therapeutics, Inc., formerly known as Ziopharm Oncology, Inc., was founded in 2003 as a clinical-stage oncology-focused cell therapy company. The company’s primary focus has been on the research and development of adoptive TCR therapies. Alaunos leveraged its proprietary, non-viral Sleeping Beauty gene transfer platform and its novel cancer mutation hotspot TCR library to design and manufacture personalized cell therapies that target neoantigens arising from common tumor-related mutations in key oncogenic genes, including KRAS, TP53, and EGFR.
In 2015, Alaunos entered into a license agreement and a research and development agreement with The University of Texas MD Anderson Cancer Center (MD Anderson) to obtain rights to certain intellectual property and collaborate on the development of TCR therapies. This partnership allowed the company to leverage MD Anderson’s expertise and proprietary technologies, strengthening its position in the field of immuno-oncology.
In 2018, Alaunos entered into an exclusive license agreement with Precigen, Inc. to further develop its Sleeping Beauty gene transfer platform for engineering TCR-T cells. However, this partnership also presented obstacles, as the company had to navigate the complex intellectual property landscape in the field of immuno-oncology.
In 2019, Alaunos entered into a patent license agreement with the National Cancer Institute (NCI) to develop and commercialize patient-derived autologous, peripheral blood T-cell therapy products engineered by transposon-mediated gene transfer to express TCRs reactive to mutated KRAS, TP53, and EGFR neoantigens. This agreement expanded the company’s TCR library and provided additional opportunities to develop personalized cell therapies. However, this agreement was later terminated in October 2023 as the company discovered multiple proprietary TCRs targeting driver mutations through its hunTR TCR discovery platform.
The company’s most advanced product candidates were in a Phase 1/2 trial, known as the TCR-T Library Phase 1/2 Trial, which was evaluating 12 TCRs reactive to mutated KRAS, TP53, and EGFR for the investigational treatment of non-small cell lung, colorectal, endometrial, pancreatic, ovarian, and bile duct cancers. However, in August 2023, Alaunos announced a strategic reprioritization of its business and the wind-down of this clinical trial.
Financial Performance and Liquidity
As of September 30, 2024, Alaunos had approximately $1.70 million in cash and cash equivalents. The company has not generated significant revenue and has incurred significant net losses in each year since its inception. For the nine months ended September 30, 2024, Alaunos had a net loss of $3.90 million, and as of September 30, 2024, the company has incurred approximately $919.70 million of accumulated deficit since its inception in 2003.
In light of its announced strategic reprioritization and concurrent exploration of strategic alternatives, including the decision to halt work on its TCR-T Library Phase 1/2 Trial and reduce its workforce, Alaunos anticipates that its cash resources will be sufficient to fund its operations into the first quarter of 2025. However, the company’s ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing or to achieve profitable results, as to which no assurances can be given.
For the fiscal year ended December 31, 2023, Alaunos reported revenue of $5,000 and a net loss of $35,140,000. The company’s operating cash flow (OCF) for the same period was -$30,142,000, and its free cash flow (FCF) was -$30,339,000.
In the most recent quarter (Q3 2024), Alaunos reported no revenue, compared to $4,000 for the nine months ended September 30, 2023. The net loss for Q3 2024 was $1,127,000, which represents a decrease primarily due to lower program expenses, consulting and employee-related expenses, and facility-related costs as a result of the wind-down of the company’s clinical activities. The company’s OCF for Q3 2024 was $26,650,000, and its FCF was $28,897,000, showing significant increases compared to the prior year period primarily due to changes in working capital.
As of December 31, 2023, Alaunos had a cash balance of $6,060,000. The company’s debt-to-equity ratio was 0, and its current ratio and quick ratio were both 4.30. Alaunos does not report having any available credit lines.
Nasdaq Delisting and Reverse Stock Splits
Alaunos has faced challenges with its stock price compliance on the Nasdaq Capital Market. In January 2023, the company was notified by Nasdaq that it was in breach of the Minimum Bid Price Rule, as the minimum bid price of its listed securities for 30 consecutive business days had been less than $1.00 per share. After a series of events, including a transfer to the Nasdaq Capital Market and a subsequent Delisting Determination from Nasdaq, Alaunos was able to regain compliance with the Minimum Bid Price Rule in February 2024 through a 1-for-15 reverse stock split and is now subject to a mandatory panel monitor until February 2025.
In July 2024, the company implemented a second reverse stock split at a ratio of 1-for-10 to further address its stock price compliance issues. These reverse stock splits have had a significant impact on the liquidity and trading of Alaunos’ common stock, which the company continues to monitor closely.
Strategic Reprioritization and Exploration of Alternatives
In August 2023, Alaunos announced a strategic reprioritization of its business, which included the wind-down of its TCR-T Library Phase 1/2 Trial and a significant reduction in its workforce. The company has engaged Cantor Fitzgerald & Co. to act as a strategic advisor in the exploration of various strategic alternatives, including, but not limited to, an acquisition, merger, reverse merger, sale of assets, strategic partnerships, or capital raises.
As part of this strategic shift, Alaunos has also terminated its amended and restated exclusive license agreement with Precigen, Inc., which had granted the company exclusive, worldwide rights to research, develop, and commercialize TCR products designed for neoantigens or driver mutations for the treatment of cancer. This decision was made after a thorough review of the company’s strategic priorities and business objectives, including the recognition that the non-viral Sleeping Beauty gene transfer platform patent will expire in 2026.
Additionally, Alaunos has terminated its Cooperative Research and Development Agreement with the National Cancer Institute, further emphasizing the company’s shift in focus and strategic direction.
Obesity Program and Future Outlook
Separately, Alaunos is evaluating several potential opportunities, including the continued development of its internally developed small molecule oral obesity program. On October 10, 2024, the company announced its progress in this program, which aims to develop a drug for obesity with a differentiated profile relative to currently marketed and in-development oral and injectable products.
Alaunos has engaged a contract development and manufacturing organization (CDMO) to manufacture the active pharmaceutical ingredients for its small molecule product candidates. The company plans to initiate in vitro testing of its candidates in the fourth quarter of 2024 and, if successful, conduct an in vivo efficacy study in the first half of 2025, followed by the initiation of nonclinical and IND-enabling activities.
The company believes these small molecule product candidates are distinct from commercially available options or others in development because they do not rely on hormonal manipulation, which is common with many obesity treatments. The success of Alaunos’ small molecule oral obesity program, as well as the outcome of its strategic exploration, will be crucial in determining the company’s future direction and its ability to create value for its shareholders.
Risks and Challenges
Alaunos faces several risks and challenges in its efforts to develop and commercialize its product candidates. The company’s most advanced product candidates were only in an early-stage clinical trial, which is very expensive and time-consuming. The delay or failure in completing clinical trials for these product candidates could significantly harm the company’s business.
Additionally, Alaunos’ product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following any potential marketing approval.
The company’s ability to raise substantial additional capital to continue as a going concern and fund its planned operations in the near term and its strategic reprioritization in the longer term is also a significant risk factor. Alaunos’ decreasing cash reserves may result in its stockholder equity falling below the $2.50 million required by the Nasdaq Listing Rule, which could lead to a delisting from the Nasdaq Capital Market.
Furthermore, the termination of Alaunos’ licenses and research and development agreements with the NCI and Precigen could limit the company’s ability to resume its clinical trial or begin new clinical trials focused on TCR-T. The loss of these key partnerships and intellectual property rights could significantly harm the company’s ability to develop and commercialize its product candidates.
Conclusion
Alaunos Therapeutics has navigated a transformative journey in the field of immuno-oncology, leveraging its proprietary Sleeping Beauty gene transfer platform and novel TCR library to develop personalized cell therapies for solid tumors. While the company has faced significant challenges, including the wind-down of its TCR-T Library Phase 1/2 Trial and compliance issues with the Nasdaq Capital Market, it continues to explore strategic alternatives and pursue the development of its small molecule oral obesity program.
The outcome of Alaunos’ strategic exploration and the success of its obesity program will be crucial in determining the company’s future direction and its ability to create value for its shareholders. The company’s ability to execute on its plans for the small molecule obesity program is dependent on study results and its ability to raise additional capital or obtain a development partner. Investors should closely monitor the company’s progress, as Alaunos navigates the complex and ever-changing landscape of the biopharmaceutical industry.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.