Stoke Therapeutics, Inc. is a clinical-stage biotechnology company dedicated to addressing the underlying causes of severe diseases by upregulating protein expression with RNA-based medicines. The company’s innovative approach, known as Targeted Augmentation of Nuclear Gene Output (TANGO), aims to selectively restore protein levels, offering a potential disease-modifying solution for patients suffering from genetic disorders.
Stoke Therapeutics was founded in June 2014 and incorporated under the laws of the state of Delaware. The company’s lead product candidate, zorevunersen (STK-001), entered clinical testing for the treatment of Dravet syndrome in 2019. Stoke Therapeutics has faced challenges along the way, including a partial clinical hold placed by the FDA in 2022 on certain higher doses of zorevunersen, which required additional preclinical testing. However, in 2024, the FDA removed the partial clinical hold, allowing the company to continue development of zorevunersen. Through strategic financing activities, including an IPO, public stock offerings, and a collaboration deal with Acadia Pharmaceuticals, Stoke Therapeutics has raised substantial capital to support the advancement of its pipeline.
Dravet Syndrome: Addressing the Underlying Genetic Cause
Dravet syndrome is a devastating genetic epileptic encephalopathy that typically begins in infancy and is characterized by frequent, prolonged, and treatment-resistant seizures, as well as developmental delays and cognitive impairment. The disease is caused by a haploinsufficiency, where the loss of approximately 50% of normal protein levels leads to the condition.
Stoke Therapeutics’ lead candidate, zorevunersen, is designed to upregulate the expression of the SCN1A gene, the key driver of Dravet syndrome. By restoring SCN1A protein levels, zorevunersen aims to address the underlying genetic cause of the disease, potentially providing a disease-modifying treatment option.
The company has completed two Phase 1/2a open-label studies of zorevunersen, MONARCH in the United States and ADMIRAL in the United Kingdom, which have demonstrated reductions in seizure frequency and improvements in multiple measures of cognition and behavior in Dravet syndrome patients. Stoke Therapeutics is now advancing zorevunersen into Phase 3 clinical trials, with plans to provide an update on the regulatory pathway by the end of 2024.
Additionally, Stoke has two ongoing open-label extension (OLE) studies, SWALLOWTAIL in the U.S. and LONGWING in the U.K., evaluating the long-term safety and tolerability of repeat doses of zorevunersen in children and adolescents with Dravet syndrome. The removal of the partial clinical hold on higher doses of zorevunersen by the FDA in August 2024 allows the company to continue chronic dosing in these OLE studies, further supporting the development of this promising candidate.
Autosomal Dominant Optic Atrophy: Expanding the Pipeline
In addition to its lead program in Dravet syndrome, Stoke Therapeutics is developing STK-002 for the treatment of Autosomal Dominant Optic Atrophy (ADOA), the most common inherited optic nerve disorder. ADOA is also caused by a haploinsufficiency, where the loss of approximately 50% of normal OPA1 protein levels leads to progressive vision loss.
STK-002 is designed to upregulate OPA1 protein expression, with the goal of stopping or slowing vision loss in ADOA patients. In 2023, Stoke Therapeutics received authorization from the United Kingdom Medicines and Healthcare Products Regulatory Agency (MHRA) to proceed with a Phase 1 open-label study (OSPREY) of STK-002 in children and adults with ADOA. However, as the company continues to focus on the development of zorevunersen, the start of the OSPREY study has been delayed.
Financials and Liquidity
Robust Financial Position
As of September 30, 2024, Stoke Therapeutics reported $269.2 million in cash, cash equivalents, and marketable securities, providing the company with a strong financial runway to advance its pipeline of RNA-based therapies. This total includes $150.02 million in cash and cash equivalents, and $89.18 million in current marketable securities. The company also reported $494,000 in restricted cash.
For the fiscal year 2023, Stoke Therapeutics reported revenue of $8.78 million, with a net loss of $104.70 million. Operating cash flow (OCF) was -$81.07 million, and free cash flow (FCF) was -$82.68 million.
In the most recent quarter (Q3 2024), the company reported revenue of $4.89 million, representing a year-over-year increase of 47.7% compared to Q3 2023. However, the company continued to experience net losses, with a Q3 2024 net loss of $26.43 million. OCF for the quarter was -$21.62 million, and FCF was -$21.72 million.
Strong Liquidity Position
Stoke Therapeutics maintains a strong liquidity position, with a debt-to-equity ratio of 0 as of the most recent quarter. The company’s current ratio and quick ratio both stand at 5.08 as of September 30, 2024, indicating robust short-term liquidity.
Research and Development Investment
Stoke Therapeutics continues to invest heavily in research and development to advance its pipeline. For the three and nine months ended September 30, 2024, R&D expenses were $22.2 million and $65.7 million, respectively, reflecting ongoing clinical trials and preclinical activities.
Operational Expenses
General and administrative expenses for the three and nine months ended September 30, 2024, were $12.7 million and $36.0 million, respectively, supporting the company’s overall operations and growth initiatives.
Experienced Leadership
The company’s leadership team is comprised of seasoned industry veterans, including Chief Executive Officer Edward M. Kaye, M.D., who has extensive experience in the development of rare disease therapeutics. Stoke Therapeutics has also strengthened its executive team with the recent appointment of Eric Olson as Chief Business Officer, bringing two decades of successful corporate business development experience with an emphasis on rare diseases and RNA therapeutics.
Risks and Challenges
Despite the promising potential of Stoke Therapeutics’ TANGO platform and its lead programs, the company faces several key risks and challenges common to the biotechnology industry. These include the inherent uncertainties of clinical development, the potential for regulatory hurdles, competition from other therapies, and the need to successfully scale up manufacturing and commercialization efforts.
Additionally, as a clinical-stage company, Stoke Therapeutics is reliant on external funding to support its operations and advance its pipeline. Any delays or difficulties in securing additional capital could impede the company’s ability to execute on its strategic objectives.
Conclusion
Stoke Therapeutics is a pioneering biotechnology company at the forefront of the RNA medicine revolution, leveraging its innovative TANGO platform to develop transformative therapies for severe genetic diseases. With its lead candidate zorevunersen advancing in Dravet syndrome and the potential of STK-002 in Autosomal Dominant Optic Atrophy, Stoke Therapeutics is poised to make a significant impact in the lives of patients suffering from these debilitating conditions.
The company’s strong financial position, with over $269 million in cash, cash equivalents, and marketable securities, provides a solid runway to continue the development of its key programs. While Stoke Therapeutics is still incurring net losses as it invests in R&D and clinical development, the recent year-over-year increase in revenue and the advancement of its lead programs demonstrate progress towards its goals.
As Stoke Therapeutics continues to execute on its clinical and strategic priorities, particularly with the upcoming regulatory update on Phase 3 registrational plans for zorevunersen in the second half of 2024, it will be one to watch in the rapidly evolving world of genetic medicine. The company’s focus on addressing the underlying causes of severe genetic diseases through its innovative TANGO platform positions it well for potential long-term success in the biotechnology industry.
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