TScan Therapeutics, Inc. (TCRX) is a clinical-stage biotechnology company at the forefront of developing T cell receptor (TCR)-engineered T cell (TCR-T) therapies for the treatment of patients with cancer. The company's innovative approach leverages its proprietary platform technologies to discover and engineer potent TCRs that can effectively target and eliminate cancer cells, offering hope to those facing the devastating impact of this disease.
Business Overview
TScan Therapeutics was incorporated in Delaware in April 2018 with the goal of translating the power of the immune system into transformative cancer treatments. The company's central premise is that they can learn from patients who are winning their fight against cancer to treat those who are not. This innovative approach has driven the development of TScan's proprietary platform technologies and the creation of its "ImmunoBank," a repository of therapeutic TCRs that recognize diverse targets and are associated with multiple human leukocyte antigen (HLA) types.
Over the past several years, TScan has built a robust pipeline of TCR-T therapy candidates using the TCRs from its ImmunoBank. These engineered TCRs are used to manufacture enhanced TCR-T therapies aimed at treating a broad population of patients with both hematologic and solid tumor malignancies. The company's strategy is rooted in the belief that by harnessing the natural ability of T cells to recognize and eliminate cancer cells, they can develop highly effective and durable therapies.
In 2020, TScan entered into a significant Collaboration and License Agreement with Novartis Institutes For Biomedical Research, Inc. to collaborate on research efforts to discover and develop novel TCR-T therapies. This partnership concluded in March 2023, marking an important chapter in the company's growth and development. More recently, in May 2023, TScan entered into a Collaboration Agreement with Amgen Inc. to identify antigens recognized by T cells in patients with Crohn's disease, demonstrating the potential applications of its technology beyond oncology.
As a clinical-stage biotechnology company focused on a novel approach to cancer treatment, TScan has faced several challenges in its early years. The company has had to navigate the complexities of developing and manufacturing TCR-T therapies, which has required significant investments in internal capabilities and reliance on third-party contractors. Additionally, as an early-stage company, TScan has had to raise substantial capital through private placements, public offerings, and debt financing to fund its research and development efforts.
The company's lead product candidates, TSC-100 and TSC-101, are currently in a Phase 1 clinical trial for the treatment of patients with hematologic malignancies, such as acute myeloid leukemia (AML), acute lymphoblastic leukemia (ALL), and myelodysplastic syndromes (MDS), who have undergone allogeneic hematopoietic cell transplantation (HCT). These therapies are designed to prevent disease relapse by eliminating residual cancer cells.
In addition to its hematologic malignancy program, TScan is also advancing multiple TCR-T therapy candidates for the treatment of solid tumors. These candidates target a variety of tumor-associated antigens, including PRAME, HPV16, MAGE-C2, and MAGE-A1, and are being evaluated in separate Phase 1 clinical trials.
Financials
As of June 30, 2024, TScan reported cash, cash equivalents, and marketable securities of $297.7 million, which the company believes will enable it to fund its current operating plan into the fourth quarter of 2026. This robust financial position has been supported by the company's successful capital raises, including a $134.7 million public offering in June 2023 and a $161.4 million public offering in April 2024.
For the six months ended June 30, 2024, TScan reported a net loss of $61.8 million, compared to a net loss of $46.6 million for the same period in 2023. The company's research and development expenses for the six-month period increased by $8.7 million, primarily due to the advancement of its clinical trials and manufacturing activities. General and administrative expenses also increased by $0.6 million during this time.
In the most recent fiscal year (2023), TScan reported revenue of $21.05 million and a net loss of $89.22 million. Operating cash flow was negative $61.36 million, and free cash flow was negative $64.50 million. For the most recent quarter (Q2 2024), revenue was $536,000, with a net loss of $31.66 million. Operating cash flow for the quarter was negative $26.23 million, and free cash flow was negative $27.09 million.
The decrease in revenue and increase in net loss, cash outflows, and free cash outflows in the most recent quarter compared to the full fiscal year were primarily due to the timing of research activities performed pursuant to the company's collaboration agreement with Amgen, which commenced in May 2023.
Liquidity
Despite the ongoing investments in its clinical programs, TScan maintains a strong balance sheet, with a current ratio of 7.77 as of June 30, 2024, indicating ample liquidity to support its operations and development activities. The company's debt-to-equity ratio stands at 0.13, reflecting a conservative capital structure. As of June 30, 2024, TScan had $242.16 million in cash and cash equivalents.
TScan has a $60 million convertible debt facility with K2 HealthVentures, of which $30 million was drawn at closing in September 2022. A second $10 million tranche was not exercised and expired in June 2024. The company has the option to draw an additional $20 million third tranche subject to agreement with K2 HealthVentures. The current ratio and quick ratio are both 7.77, indicating strong short-term liquidity.
Operational Highlights and Milestones
In 2024, TScan achieved several significant operational milestones that have strengthened its position as a leader in the TCR-T therapy space:
1. Initiation of the ALLOHA™ Phase 1 trial for TSC-100 and TSC-101: The company commenced a multi-arm Phase 1 clinical study evaluating its lead hematologic malignancy product candidates in patients undergoing allogeneic HCT. Early data from this trial has demonstrated the potential of these therapies to reduce relapse rates and increase relapse-free survival.
2. Advancement of solid tumor TCR-T therapy candidates: TScan has progressed six solid tumor TCR-T therapy candidates into Phase 1 clinical development, targeting a range of tumor-associated antigens. This diversified pipeline positions the company to address the significant unmet need in solid tumor cancers.
3. Clearance of the T-Plex IND: The U.S. Food and Drug Administration (FDA) has cleared TScan's Investigational New Drug (IND) application for T-Plex, the company's multiplex TCR-T therapy approach. This milestone enables TScan to combine multiple TCR-T therapy candidates to treat patients with solid tumors.
4. Expansion of manufacturing capabilities: The company has expanded its existing manufacturing facility to support its growing clinical program and prepare for potential commercialization in the future.
Risks and Challenges
Despite its promising progress, TScan Therapeutics faces several risks and challenges common to the biotechnology industry. These include the inherent uncertainty of clinical development, potential manufacturing and supply chain disruptions, intense competition in the TCR-T therapy space, and the need to navigate a complex regulatory landscape.
The company's success will depend on its ability to navigate these challenges and continue advancing its innovative therapies through the clinical trial process. Investors should also be aware of the company's reliance on key personnel, intellectual property protection, and the potential impact of unfavorable macroeconomic conditions on its operations and access to capital.
Outlook and Conclusion
As TScan Therapeutics continues to execute on its strategic priorities, the company's future holds significant promise. With a robust pipeline, a strong financial position, and a talented team of researchers and clinicians, TScan is well-positioned to make meaningful contributions to the field of cancer immunotherapy.
The upcoming data readouts from the ALLOHA™ Phase 1 trial and the continued advancement of the company's solid tumor programs will be closely watched by investors and the broader oncology community. If TScan's therapies demonstrate the ability to safely and effectively treat patients, the company could emerge as a leader in the rapidly evolving TCR-T therapy landscape.
TScan's focus on developing a pipeline of TCR-T therapy candidates for both hematological malignancies and solid tumors demonstrates its commitment to addressing a broad range of cancer types. The company's lead product candidates, TSC-100 and TSC-101, targeting HA-1 and HA-2 antigens respectively, show promise in preventing relapse following allogeneic hematopoietic cell transplantation. Additionally, the development of multiplex TCR-T therapy, which allows for the combination of up to three highly active TCR-T therapy candidates, showcases TScan's innovative approach to personalized cancer treatment.
The company's solid financial position, with $297.7 million in cash, cash equivalents, and marketable securities as of June 30, 2024, provides a runway into the fourth quarter of 2026. This strong cash position, coupled with the potential to access additional capital through its convertible debt facility with K2 HealthVentures, gives TScan the financial flexibility to advance its clinical programs and support ongoing research and development efforts.
While TScan currently operates primarily in the United States, the company's innovative approach to cancer immunotherapy has the potential for global impact. As the company progresses its clinical trials and potentially moves towards commercialization, it may explore opportunities for expansion into international markets.
Overall, TScan Therapeutics represents a compelling opportunity for investors seeking exposure to a pioneering biotechnology company at the forefront of innovative cancer treatments. By leveraging its proprietary platform and experienced team, the company is poised to make a lasting impact on the lives of those affected by this devastating disease. As TScan continues to advance its pipeline and generate clinical data, it will be crucial for investors to monitor the company's progress and assess its potential to transform the landscape of cancer treatment.