Business Overview and History
TransCode Therapeutics, Inc. is a biopharmaceutical company at the forefront of developing innovative RNA therapeutics to treat cancer more effectively. Founded in 2016, the company has made significant strides in advancing its proprietary TTX delivery platform and building a robust pipeline of therapeutic candidates targeting some of the most challenging cancer types.
TransCode was incorporated in January 2016 and initially focused on organizational activities, capital raising, and limited research and development (R&D) efforts. In July 2021, the company completed its initial public offering (IPO), raising $28.75 million in gross proceeds to support its growth initiatives.
Following the IPO, TransCode has significantly expanded its R&D activities, hired additional employees, and transitioned into more traditional biopharmaceutical operations. The company's lead therapeutic candidate, TTX-MC138, is an antisense oligonucleotide conjugated to TransCode's proprietary TTX delivery system, designed to inhibit microRNA-10b, a known driver of metastasis in multiple cancer types.
In September 2021, research conducted by Massachusetts General Hospital and published in the journal Cancer Nanotechnology reported on a study using a radiolabeled derivative of TTX-MC138. The results suggested that when administered intravenously, TTX-MC138 accumulates in metastatic lesions, supporting the clinical evaluation of this candidate.
TransCode's R&D efforts have been further bolstered by grant funding. In April 2021, the company received a Fast-Track Small Business Innovation Research (SBIR) Award from the National Cancer Institute, providing up to $2.39 million to fund a two-phased research partnership between TransCode and Massachusetts General Hospital. The company received SBIR Award funds of $308,860 in May 2021, $1.13 million in the second year of the award, and $870,600 in April 2023 for the third year of the Award. The program commenced in April 2021 and ended in March 2024.
In September 2024, TransCode received its second NIH Award, a Direct to Phase II SBIR Award, from the National Cancer Institute of the NIH. The $2 million Award is to support IND-enabling and clinical trial activities in the company's Phase 1a clinical trial with TTX-MC138 over two years.
In December 2023, TransCode's board of directors approved various actions to streamline operations and reduce expenses. These measures included prioritizing, delaying, or eliminating certain development activities and reducing headcount by laying off four employees. As a result, the company's headcount decreased to 11 employees at December 31, 2023, compared to 19 at December 31, 2022. As part of this restructuring, the company's President, Chief Executive Officer, and Director resigned, and the Chief Financial Officer and Director was appointed as Interim Chief Executive Officer.
Financial Overview
As a clinical-stage biopharmaceutical company, TransCode has not yet generated any revenue from product sales. The company's net losses for the years ended December 31, 2023, 2022, and 2021 were $18.55 million, $17.56 million, and $6.84 million, respectively. This reflects the company's ongoing investments in R&D and general and administrative expenses to support its operations and growth initiatives.
For the nine months ended September 30, 2024, TransCode reported a net loss of $10.84 million, with research and development expenses of $6.07 million and general and administrative expenses of $4.50 million. The net loss in the most recent quarter (Q3 2024) was $2.32 million.
Liquidity and Capital Resources
TransCode's cash position as of September 30, 2024, was approximately $1.90 million, which the company believes will be sufficient to fund its operating expenses and capital expenditure requirements into late 2024. However, the company will need to raise additional capital to continue its operations and clinical development activities beyond that point.
The company's financial ratios as of September 30, 2024, include:
- Debt/Equity Ratio: 0.0387 - Current Ratio: 1.58 - Quick Ratio: 1.58
These ratios indicate that TransCode has a relatively low level of debt compared to equity and maintains a healthy short-term liquidity position. However, given the company's ongoing cash burn and lack of revenue, additional financing will be crucial for its long-term operations.
Regulatory Challenges and Nasdaq Listing
In the third quarter of 2024, TransCode received three letters from the Nasdaq Stock Market notifying the company that it was not in compliance with certain Nasdaq Listing Rules, including the minimum bid price requirement, the equity requirement, and the shareholder approval rule. As a result, the company's shares were subject to delisting from the Nasdaq Capital Market.
On October 1, 2024, TransCode appealed the Nasdaq Staff's determination to a Nasdaq Hearings Panel. On November 4, 2024, the company was informed that the Panel granted TransCode a formal extension to regain compliance with the Nasdaq Listing Rules. To do so, the company must, among other things, obtain shareholder approval for a reverse stock split and demonstrate compliance with the minimum bid price and equity requirements by the end of 2024.
While the company works to address these regulatory challenges, the potential delisting from the Nasdaq Capital Market could have a material adverse effect on TransCode's ability to raise additional equity capital, which is critical to funding its ongoing operations and clinical development activities.
Pipeline and Clinical Development
TransCode's lead therapeutic candidate, TTX-MC138, is currently being evaluated in a Phase 1 clinical trial for the treatment of advanced solid tumors. The open-label, dose-escalation study is designed to assess the safety and tolerability of TTX-MC138 in patients with metastatic cancer.
In September 2024, TransCode announced that the first two patients had been dosed in the Phase 1 trial. The company has since provided updates on the trial's progress, including the Safety Review Committee's approval to open the second and third cohorts based on favorable safety data from the previous cohorts.
Preliminary results from the Phase 0 microdose trial, which was designed to demonstrate the delivery of a single microdose of radiolabeled TTX-MC138 to metastatic lesions, have been encouraging. The study showed that radioactivity consistent with the accumulation of TTX-MC138 was detected in the regions of the metastatic lesions, and the pharmacokinetic behavior of the radiolabeled candidate was consistent with non-clinical findings.
Furthermore, preliminary data from the patient dosed in the Phase 0 trial indicated significant inhibition of miRNA-10b, the drug candidate's molecular target, in the patient's blood after the microdose. Metabolite analysis showed circulation of intact radiolabeled TTX-MC138 for more than 20 hours.
In addition to TTX-MC138, TransCode's pipeline includes other solid tumor programs in the preclinical stage, such as TTX-siPDL1, an siRNA-based modulator of programmed death-ligand 1, and TTX-RIGA, an RNA-based agonist of the retinoic acid-inducible gene I, targeting the activation of innate immunity in the tumor microenvironment.
Competitive Landscape and Risks
The biopharmaceutical industry is highly competitive, and TransCode faces competition from larger, more established companies with significant resources, as well as emerging biotechnology and pharmaceutical firms. The company's success will depend on its ability to differentiate its RNA therapeutic approach and demonstrate the safety and efficacy of its candidates in clinical trials.
TransCode's TTX delivery platform leverages an iron-oxide nanoparticle (IONP) approved for clinical use as a cancer imaging agent and in treating iron deficiency anemia, as the physical carrier of the oligonucleotide. The company believes its TTX nanocarriers differentiate it from competitive delivery approaches, many of which rely on lipid particles or chemical structures, such as GalNAc, which effectively target hepatocytes in the liver but not tumors and metastases.
Additionally, TransCode is subject to various risks common to the industry, including regulatory uncertainties, clinical trial execution challenges, manufacturing complexities, and the need for substantial additional funding to support its operations and development activities. The company's recent Nasdaq compliance issues and the potential delisting of its shares add further uncertainty to its ability to access the capital markets and secure the necessary financing to advance its pipeline.
Outlook and Conclusion
TransCode Therapeutics is a promising biopharmaceutical company at the forefront of developing innovative RNA therapeutics to treat cancer. The company's lead candidate, TTX-MC138, has shown encouraging preclinical and early clinical results, supporting its continued advancement in the Phase 1 trial. However, the company faces significant regulatory and financial challenges that will need to be addressed to ensure its long-term success.
As TransCode navigates these obstacles and works to regain compliance with Nasdaq's listing requirements, the company's ability to secure additional funding and execute on its clinical development strategy will be crucial. Investors should closely monitor the company's progress in addressing the Nasdaq compliance issues, as well as the upcoming data readouts from the TTX-MC138 clinical trial, which could provide valuable insights into the candidate's potential.
The recent appointment of the company's scientific co-founder, Dr. Zdravka Medarova, as Chief Scientific Officer, underscores TransCode's commitment to advancing its scientific endeavors and leveraging its expertise in RNA therapeutics.
Overall, TransCode Therapeutics represents a unique opportunity in the RNA oncology space, with a proprietary platform and a pipeline of promising therapeutic candidates targeting some of the most challenging cancer types. However, the company's success will largely depend on its ability to overcome the current regulatory and financial hurdles and demonstrate the clinical viability of its approach.