Turnstone Biologics Corp. (NASDAQ:TSBX) is a clinical-stage biotechnology company focused on developing new medicines to treat and cure patients with solid tumors. The company's innovative approach to tumor infiltrating lymphocytes (TILs) has the potential to address the significant unmet need in solid tumor indications where current immunotherapies have had limited success.
Business Overview
Turnstone's lead product candidate, TIDAL-01, is currently being evaluated in three ongoing Phase 1 clinical trials, including a multi-site trial for the treatment of breast cancer, colorectal cancer, head and neck cancer, and uveal melanoma, as well as two investigator-sponsored trials with H. Lee Moffitt Cancer Center and Research Institute, Inc. across colorectal cancer, head and neck cancer, and both cutaneous and non-cutaneous melanomas. The company plans to provide a clinical program update for TIDAL-01 in mid-2024.
In addition to TIDAL-01, Turnstone is actively advancing its preclinical pipeline, including TIDAL-02, its next Selected TIL program, and a combination program evaluating TIDAL-01 with viral immunotherapy. The company is currently evaluating the optimal viral immunotherapy to advance into clinical development with TIDAL-01.
Financials
Turnstone has a strong financial position, with $77.8 million in cash, cash equivalents, and short-term investments as of March 31, 2024. However, the company incurred a net loss of $19.6 million and had an accumulated deficit of $196.4 million as of the same date. For the full year 2023, Turnstone reported an annual net loss of $55.2 million, with annual operating cash flow of -$66.2 million and annual free cash flow of -$67.4 million.
The company's financial performance in the first quarter of 2024 was marked by a decrease in collaboration revenue to $0.0 million, compared to $19.3 million in the same period of 2023, due to the termination of the Takeda Agreement. Research and development expenses remained relatively stable at $15.8 million, compared to $15.7 million in the prior-year quarter, while general and administrative expenses increased to $4.9 million from $4.0 million.
Liquidity
Turnstone's cash position is expected to fund its operations into the third quarter of 2025, based on its current operating plan. However, the company may require additional capital to complete the development and potential commercialization of its product candidates. To this end, Turnstone recently entered into a $20 million revolving credit facility with Banc of California, which includes certain covenants related to its clinical development and funding milestones.
Risks and Challenges
The company's business is highly dependent on the success of its lead Selected TIL product candidate, TIDAL-01, as well as its other current and future product candidates. All of Turnstone's product candidates will require significant additional preclinical or clinical development before the company is able to seek regulatory approval and potentially launch a product commercially.
Turnstone faces competition from other companies developing TIL-based therapies and other immunotherapies for the treatment of solid tumors. The company's ability to successfully develop and commercialize its product candidates will depend on its ability to differentiate its approach, navigate the complex regulatory landscape, and manage the manufacturing and supply chain challenges inherent in cell therapy development.
Key risks facing Turnstone include the inherent uncertainties of clinical development, potential manufacturing issues, competition from other therapies, and the need for additional capital to fund its operations. The company's success will also depend on its ability to protect its intellectual property, manage its growth, and attract and retain key personnel.
Outlook
Despite the challenges, Turnstone's innovative approach to TIL-based immunotherapy and its pipeline of product candidates targeting a range of solid tumor indications make it a company to watch in the biotechnology space. Investors will be closely monitoring the company's progress, particularly the upcoming clinical data readout for TIDAL-01 and the advancement of its preclinical programs.
Conclusion
Overall, Turnstone Biologics Corp. is a promising biotech company with a differentiated approach to tackling solid tumors. While the company faces significant risks and challenges, its strong financial position, diverse pipeline, and experienced management team position it well to potentially deliver meaningful advancements in the treatment of solid cancers.