Alaunos Therapeutics Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
TCRT$1.74-5.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0000950170-24-060075
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0000950170-24-097142
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 89 previous paragraphs and 68 current paragraphs.
38 unchanged; 24 reworded; 3 added; 27 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Revenue
Current report
Revenue
Current report
Revenue during the three months ended June 30, 2024 was $4 and was $4 for the three months ended June 30, 2023. Revenue during the six months ended June 30, 2024 was $6 thousand and was $4 thousand for the six months ended June 30, 2023.
Removed paragraphs (27)
Previous report
Collaboration Revenue
Previous report
Collaboration Revenue
Previous report
Collaboration revenue during the three months ended March 31, 2024 was $1 thousand and was $0 for the three months ended March 31, 2023.
Previous report
2022 Public Offering
Previous report
On November 29, 2022, we entered into an underwriting agreement, or the Underwriting Agreement, with Cantor as the sole underwriter, relating to the issuance and sale in an underwritten offering, or the Offering, of 1,615,247 shares of our common stock, or the Firm Shares, to Cantor at a price of $9.2865 per share.
Previous report
Our net proceeds from the Offering were $14.7 million (before accounting for the partial exercise of Cantor's option as described below) after deducting underwriting discounts and commissions and offering expenses payable by us.
Previous report
Under the terms of the Underwriting Agreement, we granted Cantor an option, exercisable for 30 days, to purchase up to an additional 242,287 shares of common stock, or, together with the Firm Shares, the Shares, at the same price per share as the Firm Shares. On January 5, 2023, Cantor partially exercised its option to purchase an additional 14,420 shares of common stock.
Previous report
2022 Equity Distribution Agreement
Previous report
On August 12, 2022, we entered into an Equity Distribution Agreement, or the Equity Distribution Agreement, with Piper Sandler & Co., or Piper Sandler, pursuant to which we can offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $50 million through Piper Sandler as our sales agent in an “at the market offering.” Piper Sandler will receive a commission of 3.0% of the gross proceeds of any common stock sold under the Equity Distribution Agreement. During the three months ended March 31, 2024 and 2023, there were no sales of our common stock under the Equity Distribution Agreement.
Previous report
2021 Loan and Security Agreement
Previous report
On August 6, 2021, we entered into a Loan and Security Agreement, or the Loan and Security Agreement, with Silicon Valley Bank, or SVB. The Loan and Security Agreement provided for an initial term loan of $25.0 million funded at the closing, or the Term A Tranche, with an additional tranche of $25.0 million available if certain funding and clinical milestones were met by August 31, 2022. The SVB Facility and related obligations under the Loan and Security Agreement were secured by substantially all of our properties, rights and assets, except for our intellectual property (which was subject to a negative pledge under the Loan and Security Agreement). In addition, the Loan and Security Agreement contained customary representations, warranties, events of default and covenants.
Previous report
Effective December 28, 2021, we entered into the First Amendment to the Loan and Security Agreement. Under the terms of the First Amendment, the additional tranche, which remained unfunded, was eliminated, leaving only the Term A Tranche, which is referred to as the SVB Facility. The SVB Facility bore interest at a floating rate per annum on the outstanding loans, payable monthly, at the greater of (a) 7.75% and (b) the current published U.S. prime rate, plus a margin of 4.5%. Commencing on September 1, 2022, aggregate outstanding borrowings became repayable in twelve consecutive, equal monthly installments of principal plus accrued interest.
Previous report
All outstanding obligations under the amended Loan and Security Agreement were due and payable on August 1, 2023. We also owed SVB $1.4 million as a final payment, or the Final Payment.
Previous report
Effective March 30, 2023, we entered into a Third Amendment to the Loan and Security Agreement, or the Third Amendment. Under the terms of the Third Amendment, we were no longer required to maintain all of our operating accounts, depository accounts and excess cash with SVB, and were instead only required to maintain a single operating or depository account at Silicon Valley Bank. The Third Amendment also modified the cash collateralization requirement, such that we were required to cash collateralize the entire sum of the outstanding principal amount of the SVB Facility plus an amount equal to the Final Payment, which amount was to be reduced commensurate with each regularly scheduled monthly payment of principal and interest on the SVB Facility.
Previous report
On May 1, 2023, we paid SVB all amounts outstanding under the amended Loan and Security Agreement, comprised of the entire outstanding principal amount under the SVB Facility, all accrued and unpaid interest and the Final Payment. The payment was subject to a prepayment premium of 2.00%.
Previous report
In connection with our entry into the Loan and Security Agreement in August 2021, we issued to SVB warrants to purchase (i) up to 28,856 shares of our common stock, in the aggregate, and (ii) up to an additional 28,856 shares of Common Stock, in the aggregate, in the event we achieved certain clinical milestones, in each case at an exercise price per share of $33.30. In connection with our entry into the First Amendment in December 2021, we amended and restated the warrants issued to SVB. As amended and restated, the warrants are for up to 43,307 shares of our common stock, in the aggregate, with an exercise price of $17.40 per share, or the SVB Warrants. The SVB Warrants expire on August 6, 2031.
Previous report
Cash flows from operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities. Cash flows from operating activities are derived by adjusting our net loss for:
Previous report
Non-cash operating items such as depreciation, amortization, impairment charges, stock-based compensation and reduction in right-of-use assets; and
Previous report
Changes in operating assets and liabilities which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations.
Previous report
Operating Leases
Previous report
On March 12, 2019, we entered into a lease agreement for office space in Houston at MD Anderson through April 2021. On October 15, 2019, we entered into another lease agreement for additional office and laboratory space in Houston through February 2027. On April 7, 2020, we entered into amendments to our existing lease to lease additional office and laboratory space in Houston through February 2027. On December 15, 2020, we entered into another lease in Houston with MD Anderson which provided us additional office and laboratory space through April 2028.
Previous report
In April 2023, we executed an agreement to terminate the lease for our remaining office space in Boston, Massachusetts. Under the terms of the lease termination, we were required to pay a $0.2 million termination fee. Additionally, we have been released from a sub-sublease of certain of our office space in Boston signed in June 2022 as it has been assigned to the Boston office space's landlord in conjunction with the agreement to terminate the lease for the remaining office space.
Previous report
In August 2023, in accordance with the lease agreement executed on December 15, 2020, we provided notification to the landlord to terminate office space of 3,228 square feet in Houston, Texas. As a result, the associated lease liability and right-of-use asset were remeasured to $19 thousand, reflecting the revised lease payments and term end date of November 2023.
Previous report
On November 1, 2023, we and MD Anderson, as landlord, agreed to mutually terminate the leases dated October 15, 2019 and April 7, 2020, which represent office space totaling 14,037 square feet, effective November 15, 2023. As a result, we agreed to make a final payment of $0.1 million to the landlord.
Previous report
As of March 31, 2024, we had terminated all operating leases and therefore have no remaining lease commitments, other than a short-term lease.
Previous report
Critical Accounting Policies and Estimates
Previous report
In our Annual Report on Form 10-K for the year ended December 31, 2023, our most critical accounting policies and estimates upon which our financial status depends were identified as those relating to clinical trial expenses and other research and development expenses; collaboration agreements; fair value measurements for stock-based compensation; and income taxes. We reviewed our policies and determined that those policies remain our most critical accounting policies for the three months ended March 31, 2024.
Reworded paragraphs (24)
Previous wording
All share amounts presented in this Item1 2 give effect to the 1-for-15 reverse stock split of our outstanding shares of common stock that occurred on January 31, 2024.
Current wording
All share amounts presented in this Item 2 give effect to the 1-for-15 reverse stock split and the 1-for-10 second reverse stock split of our outstanding shares of common stock that occurred on January 31, 2024 and July 17, 2024, respectively.
Previous wording
We have not generated any product revenue and have incurred significant net losses in each year since our inception. For the three months ended March 31, 2024, we had a net loss of $1.7 million, and as of March 31, 2024, we have incurred approximately $917.4 million of accumulated deficit since our inception in 2003. We expect to continue to incur significant operating expenditures and net losses for the foreseeable future.
Current wording
We have not generated any product revenue and have incurred significant net losses in each year since our inception. For the six months ended June 30, 2024, we had a net loss of $3.2 million, and as of June 30, 2024, we have incurred approximately $918.9 million of accumulated deficit since our inception in 2003. We expect to continue to incur significant operating expenditures and net losses for the foreseeable future.
Previous wording
We recognize research and development funding revenue over the estimated period of performance. To date we have not generated product revenue. Unless and until we receive approval from the U.S. Food and Drug Administration, or the FDA, and/or other regulatory authorities for our product candidates, we cannot sell our products and will not have product revenue.
Current wording
We recognize royalties, research and development funding revenue over the estimated period of performance. To date we have not generated product revenue. Unless and until we receive approval from the U.S. Food and Drug Administration, or the FDA, and/or other regulatory authorities for our product candidates, we cannot sell our products and will not have product revenue.
Previous wording
Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023
Current wording
Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023
Previous wording
Collaboration revenue during the three months ended March 31, 2024 and 2023 was as follows:
Current wording
Revenue during the three and six months ended June 30, 2024 and 2023 was as follows:
Previous wording
Research and development expenses during the three months ended March 31, 2024 and 2023 were as follows:
Current wording
Research and development expenses during the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
Research and development expenses for the three months ended March 31, 2024 decreased by $6.4 million when compared to the three months ended March 31, 2023, primarily due to lower program expenses of $3.7 million as a result of the wind-down of our clinical activities, a $1.5 million decrease in employee-related expenses due to our reduced headcount and a $0.8 million decrease in facility related cost due to the wind-down.
Current wording
Research and development expenses for the three months ended June 30, 2024 decreased by $5.0 million when compared to the three months ended June 30, 2023, primarily due to lower program expenses of $2.5 million as a result of the wind-down of our clinical activities, a $1.6 million decrease in consulting and employee-related expenses due to our reduced headcount and a $0.9 million decrease in facility related cost due to the wind-down.
Previous wording
For the three months ended March 31, 2024, our clinical stage projects included our TCR-T Library Phase 1/2 Trial evaluating TCRs from our library for the investigational treatment of non-small cell lung, colorectal, endometrial, pancreatic, ovarian and bile duct cancers, which we are currently in the process of winding down.
Current wording
For the three and six months ended June 31, 2024, our clinical stage projects included our TCR-T Library Phase 1/2 Trial evaluating TCRs from our library for the investigational treatment of non-small cell lung, colorectal, endometrial, pancreatic, ovarian and bile duct cancers, which we are currently in the process of winding down.
Previous wording
General and administrative expenses during the three months ended March 31, 2024 and 2023 were as follows:
Current wording
General and administrative expenses during the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
General and administrative expenses for the three months ended March 31, 2024 decreased by $1.6 million as compared to the three months ended March 31, 2023, primarily due to a $1.3 million decrease in employee-related expenses due our reduced headcount, a $0.1 decrease in consulting expenses and a $0.1 decrease in facility cost due to the reduction in deprecation expenses and rent as a direct result of the lease termination in the prior period.
Current wording
General and administrative expenses for the six months ended June 30, 2024 decreased by $3.6 million as compared to the six months ended June 30, 2023, primarily due to a $2.6 million decrease in employee-related expenses due our reduced headcount, a $0.8 million decrease in consulting expenses and a $0.3 million decrease in facility cost due to the reduction in deprecation expenses and rent as a direct result of the lease termination in the prior period.
Previous wording
Other income (expense) during the three months ended March 31, 2024 and 2023 was as follows:
Current wording
Other income (expense) during the three and six months ended June 30, 2024 and 2023 was as follows:
Previous wording
Other income, net, for the three months ended March 31, 2024 increased be $0.04 million as compared to the three months ended March 31, 2023, primarily due to no interest expense associated with our former amended Loan and Security Agreement (as defined below).
Current wording
Other income (expense), net, for the three months ended June 30, 2024 increased be $0.8 million as compared to the three months ended June 30, 2023, primarily due to no interest expense associated with our former amended Loan and Security Agreement (as defined below).
Previous wording
To date, we have financed our operations primarily through public offerings of our common stock, private placements of our equity securities, term debt and collaborations. Through December 31, 2023, we have received an aggregate of $729.2 million from issuances of equity. We have had no financing activity through March 31, 2024.
Current wording
To date, we have financed our operations primarily through public offerings of our common stock, private placements of our equity securities, term debt and collaborations. Through December 31, 2023, we have received an aggregate of $729.2 million from issuances of equity. We have had no financing activity for the six months ended June 30, 2024.
Previous wording
The following table summarizes our net decrease in cash and cash equivalents for the three months ended March 31, 2024 and 2023:
Current wording
The following table summarizes our net decrease in cash and cash equivalents for the six months ended June 30, 2024 and 2023:
Previous wording
Net cash used in operating activities for the three months ended March 31, 2024 was $1.9 million, as compared to net cash used in operating activities of $9.4 million for the three months ended March 31, 2023. The decrease in net cash used in operation activities was primarily related to changes in our net loss.
Current wording
Net cash used in operating activities for the six months ended June 30, 2024 was $3.6 million, as compared to net cash used in operating activities of $16.4 million for the six months ended June 30, 2023. The decrease in net cash used in operation activities was primarily related to changes in our net loss.
Previous wording
The net cash used in operating activities for the three months ended March 31, 2024 was primarily due to our net loss of $1.7 million, adjusted for $0.2 million of non-cash items such as depreciation and stock-based compensation and a $0.7 million decrease in accrued expenses, a decrease in accounts payable of $18 thousand, a decrease to prepaid expenses and other current assets of $0.3 million.
Current wording
The net cash used in operating activities for the six months ended June 30, 2024 was primarily due to our net loss of $3.2 million, adjusted for $0.3 million of non-cash items such as depreciation and stock-based compensation and a $0.4 million decrease in accrued expenses, a decrease in accounts payable of $0.3 million, a decrease to prepaid expenses and other current assets and accounts receivables of $16 thousand.
Previous wording
Net cash used in investing activities was $0 for the three months ended March 31, 2024, compared to $23 thousand for the three months ended March 31, 2023. The decrease is related to no investing activities during the current period as compared to the prior period.
Current wording
Net cash used in investing activities was $0 for the six months ended June 30, 2024, compared to $0.2 million for the six months ended June 30, 2023. The decrease is related to no investing activities during the current period as compared to the prior period.
Previous wording
Net cash used in financing activities for the three months ended March 31, 2024 was $0, compared to $6.2 million for the three months ended March 31, 2023. The decrease was primarily related to the repayment of long-term debt in 2023 that did not recur in 2024.
Current wording
Net cash used in financing activities for the six months ended June 30, 2024 was $0, compared to $18.1 million for the six months ended June 30, 2023. The decrease was primarily related to the repayment of long-term debt in 2023 that did not recur in 2024.
Previous wording
We anticipate that losses will continue for the foreseeable future. As of March 31, 2024, our accumulated deficit was approximately $917.4 million. Our actual cash requirements may vary materially from those planned because of a number of factors, including changes in the focus, direction and pace of our development programs.
Current wording
We anticipate that losses will continue for the foreseeable future. As of June 30, 2024, our accumulated deficit was approximately $918.9 million. Our actual cash requirements may vary materially from those planned because of a number of factors, including changes in the focus, direction and pace of our development programs.
Previous wording
As of March 31, 2024, we had approximately $4.1 million of cash and cash equivalents. In light of our announced strategic reprioritization and concurrent exploration of strategic alternatives, including our decision to halt work on our TCR-T Library Phase 1/2 Trial, our development programs and reducing our workforce, we anticipate our cash resources will be sufficient to fund our operations into the third quarter of 2024. In order to continue our operations beyond our forecasted runway, including if necessary to continue to explore strategic alternatives, we will need to raise additional capital, and we have no committed sources of additional capital at this time. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of our expenses could vary materially and adversely as a result of a number of factors. We have based our estimates on assumptions that may prove to be wrong, and our expenses could prove to be significantly higher than we currently anticipate. Management does not know whether additional financing will be on terms favorable or acceptable to us when needed, if at all. If adequate additional funds are not available when required, we may be unable to persist as a going concern for sufficient time to identify or execute on any strategic alternatives.
Current wording
As of June 30, 2024, we had approximately $2.5 million of cash and cash equivalents. In light of our announced strategic reprioritization and concurrent exploration of strategic alternatives, including our decision to halt work on our TCR-T Library Phase 1/2 Trial, our development programs and reducing our workforce, we anticipate our cash resources will be sufficient to fund our operations into the third quarter of 2024. In order to continue our operations beyond our forecasted runway, including if necessary to continue to explore strategic alternatives, we will need to raise additional capital, and we have no committed sources of additional capital at this time. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of our expenses could vary materially and adversely as a result of a number of factors. We have based our estimates on assumptions that may prove to be wrong, and our expenses could prove to be significantly higher than we currently anticipate. Management does not know whether additional financing will be on terms favorable or acceptable to us when needed, if at all. If adequate additional funds are not available when required, we may be unable to persist as a going concern for sufficient time to identify or execute on any strategic alternatives.
Previous wording
Working capital as of March 31, 2024 was $4.8 million, consisting of $6.0 million in current assets and $1.2 million in current liabilities. Working capital as of December 31, 2023 was $6.3 million, consisting of $8.3 million in current assets and $2.0 million in current liabilities.
Current wording
Working capital as of June 30, 2024 was $3.4 million, consisting of $4.7 million in current assets and $1.3 million in current liabilities. Working capital as of December 31, 2023 was $6.3 million, consisting of $8.3 million in current assets and $2.0 million in current liabilities.
Previous wording
On May 28, 2019, we entered into a patent license agreement, or the Patent License, with the NCI. The terms of the Patent License required us to pay the NCI minimum annual royalties in the amount of $0.3 million, which would be reduced to $0.1 million once the aggregate minimum annual royalties paid by us equaled $1.5 million. For the three months ended March 31, 2024, we did not recognize royalty payments under the Patent License, and for the three months ended March 31, 2023, we recognized $0.3 million related to royalty payments under the Patent License. As of March 31, 2024, we paid a total of $0.8 million in minimum annual royalty payments under the Patent License. On October 27, 2023, we provided notice of termination of the Patent License with the NCI, effective December 26, 2023.
Current wording
On May 28, 2019, we entered into a patent license agreement, or the Patent License, with the NCI. The terms of the Patent License required us to pay the NCI minimum annual royalties in the amount of $0.3 million, which would be reduced to $0.1 million once the aggregate minimum annual royalties paid by us equaled $1.5 million. For the three and six months ended June 30, 2024, we did not recognize royalty payments under the Patent License, and for the three and six months ended June 30, 2023, we recognized $0.0 and $0.3 million related to royalty payments under the Patent License. As of June 30, 2024, we paid a total of $0.8 million in minimum annual royalty payments under the Patent License. On October 27, 2023, we provided notice of termination of the Patent License with the NCI, effective December 26, 2023.
Previous wording
Pursuant to the A&R License Agreement, annual license payments due to Precigen are $75 thousand. Payment of the licensing fee is scheduled annually, in the second quarter after the first payment in October 2023; therefore, in accordance with the terms of the agreement, no amounts were paid during the three months ended March 31, 2024 or 2023.
Current wording
Pursuant to the A&R License Agreement, annual license payments due to Precigen are $75 thousand. Payment of the licensing fee is scheduled annually, in the second quarter after the first payment in October 2023; therefore, in accordance with the terms of the agreement, no amounts were paid during the three and six months ended June 30, 2024 or 2023.
Previous wording
In June 2022, Solasia Pharma K. K., or Solasia, announced that darinaparsin had been approved from relapsed or refractory Peripheral T-Cell Lymphoma by the Ministry of Health, Labor and Welfare in Japan. During the three months ended March 31, 2024, we had $1 thousand in collaboration revenue, and we did not record collaboration revenue for the three months ended March 31, 2023.
Current wording
In June 2022, Solasia Pharma K. K., or Solasia, announced that darinaparsin had been approved for relapsed or refractory Peripheral T-Cell Lymphoma by the Ministry of Health, Labor and Welfare in Japan. During the three months ended June 30, 2024 and 2023, we recorded revenue of $5 thousand and $4 thousand under the License and Collaboration Agreement, respectively. During the six months ended June 30, 2024 and 2023, we recorded revenue of $6 thousand and $4 thousand under the License and Collaboration Agreement,respectively.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Research and development expenses for the six months ended June 30, 2024 decreased by $11.3 million when compared to the six months ended June 30, 2023, primarily due to lower program expenses of $6.6 million as a result of the wind-down of our clinical activities, a $3.0 million decrease in consulting and employee-related expenses due to our reduced headcount and a $1.7 million decrease in facility related cost due to the wind-down.
Current report — wording carried from elsewhere
General and administrative expenses for the three months ended June 30, 2024 decreased by $2.0 million as compared to the three months ended June 30, 2023, primarily due to a $1.8 million decrease in consulting and employee-related expenses due our reduced headcount, and a $0.01 million decrease in facility cost due to the reduction indepreciation expenses and rent as a direct result of the lease termination in the prior period.
Current report — wording carried from elsewhere
Other income (expense), net, for the six months ended June 30, 2024 increased be $1.3 million as compared to the six months ended June 30, 2023, primarily due to no interest expense associated with our former amended Loan and Security Agreement (as defined below).