Entrada Therapeutics Inc

Previous wording

We are initially focused on the development of EEV therapeutics for rare neuromuscular diseases, starting with Duchenne muscular dystrophy ("Duchenne" or "DMD"). DMD is caused by genetic mutations that prevent the creation of functional dystrophin, a protein required to maintain the structural integrity of muscle cells. In our neuromuscular disease programs, we link EEVs to small strands of nucleic acids called oligonucleotides, including phosphorodiamidate morpholino oligomers ("PMOs"). We are developing EEV-PMOs that promote the skipping of these mutations associated with DMD. We believe that our EEV-PMO exon-skipping therapy will enable the production of functional dystrophin to slow, stop or even reverse disease progression. Our most advanced therapeutic candidate, ENTR-601-44, is being developed for patients with DMD that are exon 44 skipping amenable. On July 24, 2023, Entrada received authorization from the United Kingdom Medicines and Healthcare Products Regulatory Agency ("MHRA") and Research Ethics Committee ("REC") for its Clinical Trial of an Investigational Medicinal Product ("CTIMP") for its Phase 1 clinical trial in healthy volunteers, ENTR-601-44-101. On March 13, 2024, we announced that the first, second and third cohorts of participants had been successfully dosed. We have since initiated dosing of the fourth and final cohort, and expect to report data from the Phase 1 clinical trial in October of 2024. On December 19, 2022, we announced that we received a clinical hold notice from the U.S. Food and Drug Administration ("FDA") regarding the Investigational New Drug application ("IND") for ENTR-601-44. The FDA has requested that we continue to gather and submit additional information regarding ENTR-601-44 and we are actively working to resolve the clinical hold in the United States.

Current wording

We are initially focused on the development of EEV therapeutics for rare neuromuscular diseases, starting with Duchenne muscular dystrophy ("Duchenne" or "DMD"). DMD is caused by genetic mutations that prevent the creation of functional dystrophin, a protein required to maintain the structural integrity of muscle cells. In our neuromuscular disease programs, we link EEVs to small strands of nucleic acids called oligonucleotides, including phosphorodiamidate morpholino oligomers ("PMOs"). We are developing EEV-PMOs that promote the skipping of these mutations associated with DMD. We believe that our EEV-PMO exon-skipping therapy will enable the production of functional dystrophin to slow, stop or even reverse disease progression. Our most advanced therapeutic candidate, ENTR-601-44, is being developed for patients with DMD that are exon 44 skipping amenable.

Previous wording

•ENTR-601-44: Phase 1 clinical trials are ongoing with clinical data expected to be reported in October 2024 and Phase 2 regulatory submissions expected in Q4 2024

Current wording

•ENTR-601-44: Positive Phase 1 clinical data reported and Phase 2 regulatory submissions expected in Q4 2024

Previous wording

•ENTR-601-45: Expect to submit Clinical Trial Application ("CTA")/IND Q4 2024

Current wording

•ENTR-601-45: Expect to submit Clinical Trial Application ("CTA")/IND in Q4 2024

Previous wording

Under the terms of the Vertex Agreement, Entrada initially received $250.0 million from the Vertex Agreement comprised of an upfront payment of $223.7 million and an equity investment of $26.3 million in our common stock at $16.26 per share. In October 2023, the Company achieved a milestone pursuant to the Vertex Agreement related to preclinical IND-enabling Good Laboratory Practices ("GLP") toxicology studies of VX-670 that triggered a $17.5 million milestone payment, which the Company received in the fourth quarter of 2023. In the first quarter of 2024, the Company achieved a milestone related to the clinical advancement of VX-670, which triggered a $75 million payment. The Company expects to receive this payment in the second quarter of 2024.

Current wording

Under the terms of the Vertex Agreement, we initially received $250.0 million from the Vertex Agreement comprised of an upfront payment of $223.7 million and an equity investment of $26.3 million in our common stock at $16.26 per share. In October 2023, we achieved a milestone pursuant to the Vertex Agreement related to preclinical IND-enabling Good Laboratory Practices ("GLP") toxicology studies of VX-670 that triggered a $17.5 million milestone payment, which we received in the fourth quarter of 2023. In the first quarter of 2024, we achieved a milestone related to the clinical advancement of VX-670, which triggered a $75.0 million payment. We received this payment in the second quarter of 2024.

Previous wording

On May 6, 2024, Vertex announced that its IND for the Phase 1/2 clinical trial of VX-670 in people with DM1 has cleared, as have the CTAs in Canada, the United Kingdom and the European Union, and the Clinical Trials Notification ("CTN") in Australia. Vertex further noted that enrollment and dosing are underway.

Current wording

On May 6, 2024, Vertex announced that its IND for the Phase 1/2 clinical trial of VX-670 in people with DM1 has cleared, as have the CTAs in Canada, the United Kingdom and the European Union, and the Clinical Trials Notification ("CTN") in Australia. On August 1, 2024, Vertex announced that they continue to enroll and dose patients in the global Phase 1/2 clinical trial for VX-670 in people with DM1 and expect to complete the single ascending dose (SAD) portion of the study by the end of 2024. Following completion of the SAD portion of the trial, Vertex will move into the multiple ascending dose portion, where both the safety and efficacy of VX-670 will be evaluated.

Previous wording

Since our inception, we have devoted substantially all our resources to research and development efforts relating to our EEV Platform, advancing development of our portfolio of programs and general and administrative support for these operations, including raising capital. Since our inception, we have raised over $650.0 million of gross proceeds from sales of stock to leading biotechnology investors and from the Vertex Agreement.

Current wording

Since our inception, we have devoted substantially all our resources to research and development efforts relating to our EEV Platform, advancing development of our portfolio of programs and general and administrative support for these operations, including raising capital. Since our inception, we have raised over $850.0 million of gross proceeds from equity sales to leading biotechnology investors and from the Vertex Agreement.

Previous wording

Since inception, we have incurred significant net losses. As of March 31, 2024, we had an accumulated deficit of $171.5 million. Other than the recognition of revenue related to collaboration payments, we expect to continue to generate operating losses and negative operating cash flows for the foreseeable future as we advance our platform and EEV therapeutic candidates. We will not generate any revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for one or more therapeutic candidates, if ever. If we obtain regulatory approval for any therapeutic candidates, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing and distribution.

Current wording

Since inception, we have incurred significant net losses. As of June 30, 2024, we had an accumulated deficit of $116.4 million. Other than the recognition of revenue related to collaboration payments, we expect to continue to generate operating losses and negative operating cash flows for the foreseeable future as we advance our platform and EEV therapeutic candidates. We will not generate any revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for one or more therapeutic candidates, if ever. If we obtain regulatory approval for any therapeutic candidates, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing and distribution.

Previous wording

Vertex and the $75 million clinical advancement milestone expected to be received in the second quarter of 2024, will be sufficient to extend our cash runway through the second quarter of 2026, supporting the Company's expansion and continued development of EEV therapeutic candidates targeting Duchenne muscular dystrophy and advance EEV-therapeutic candidates in indications beyond neuromuscular disease. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” To finance our operations beyond that point we will need to raise additional capital, which cannot be assured.

Current wording

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $469.7 million. Based on our current operating plans, we believe that our cash, cash equivalents and marketable securities as of June 30, 2024 will be sufficient to fund our operations into 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” To finance our operations beyond that point we will need to raise additional capital, which cannot be assured.

Previous wording

•expenses incurred in connection with the discovery and preclinical development of our therapeutic candidates and research programs, including under agreements with third parties, such as consultants, contractors, and clinical research organizations ("CROs");

Current wording

•expenses incurred in connection with our research programs and development of our therapeutic candidates, including those incurred under agreements with third parties, such as consultants, contractors, and clinical research organizations ("CROs") to conduct preclinical studies and clinical trials;

Previous wording

There have been no material changes to our critical accounting policies and estimates from those reported in the Annual Report, except as described further in Note 2 Summary of Significant Accounting Policiesin the condensed consolidated financial statements elsewhere in this Quarterly Report, which discusses a new policy regarding revenue recognition.

Current wording

There have been no material changes to our critical accounting policies and estimates from those reported in the Annual Report, except as described further in Note 2 Summary of Significant Accounting Policiesin the condensed consolidated financial statements elsewhere in this Quarterly Report.

Previous wording

Collaboration revenue was $59.1 million for the three months ended March 31, 2024 and $25.3 million for the three months ended March 31, 2023. The increase was primarily driven by the milestone related to the clinical advancement of VX-670 that was achieved in the first quarter of 2024 and added to the transaction price.

Current wording

Collaboration revenue was $94.7 million for the three months ended June 30, 2024 and $18.2 million for the three months ended June 30, 2023. The increase was primarily driven by the additional research activities completed during the three months ended June 30, 2024, as well as the milestone related to the clinical advancement of VX-670 that was achieved in March of 2024 and added to the transaction price.

Previous wording

Research and development expenses were $28.6 million for the three months ended March 31, 2024, compared to $23.1 million for the three months ended March 31, 2023. The increase of $5.5 million in research and development expenses was primarily attributable to:

Current wording

Research and development expenses were $32.0 million for the three months ended June 30, 2024, compared to $26.3 million for the three months ended June 30, 2023. The increase of $5.7 million in research and development expenses was primarily attributable to:

Previous wording

•an increase of $1.0 million in external costs primarily driven by additional clinical costs incurred related to ENTR-601-44 and pre-clinical costs incurred related to ENTR-601-45 and ENTR-601-50.

Current wording

•an increase of $3.1 million in external costs primarily driven by additional research activities performed for VX-670 and additional preclinical costs incurred related to ENTR-601-50 and additional investments into our discovery programs. These increases were slightly offset by lower costs incurred related to ENTR-601-44 and ENTR-601-45; and

Previous wording

•an increase of $4.5 million in internal costs driven by increased headcount in our research and development function, inclusive of stock-based compensation expense of $1.6 million and $1.3 million for the three months ended March 31, 2024 and 2023, respectively, and increased facilities costs to support our expanding operations;

Current wording

•an increase of $2.6 million in internal costs driven by increased headcount in our research and development function, inclusive of stock-based compensation expense of $2.0 million and $1.4 million for the three months ended June 30, 2024 and 2023, respectively, and increased facilities costs to support our expanding operations.

Previous wording

We expect that our research and development expenses will increase as we advance ENTR-601-44 through clinical trials, progress ENTR-601-45 and ENTR-601-50 through preclinical development and into clinical trials, support our partnered candidate, VX-670, and continue to perform discovery work for future product candidates.

Current wording

We expect that our research and development expenses will increase as we advance ENTR-601-44 / ENTR-601-45 through clinical trials, and ENTR-601-50 through preclinical development and into clinical trials, support our partnered candidate, VX-670, and continue to perform discovery work for future product candidates.

Previous wording

The Company recorded an income tax expense of $1.8 million for the three months ended March 31, 2024 and an income tax expense of $3.6 million for the three months ended March 31, 2023. For both periods, the income tax expense recorded was driven largely by the projected current tax liabilities associated with the tax recognition of payments received pursuant to the Vertex Agreement resulting in taxable income during the respective periods.

Current wording

The Company recorded an income tax expense of $2.8 million for the three months ended June 30, 2024 and an income tax expense of $13.8 million for the three months ended June 30, 2023. For both periods, the income tax expense recorded was driven largely by the projected current tax liabilities associated with the tax recognition of payments received pursuant to the Vertex Agreement resulting in taxable income during the respective periods.

Previous wording

Total interest and other income, net was$4.2 million for thethree months ended March 31, 2024, compared to$2.7 million of interest and other income for thethree months ended March 31, 2023; this increase is primarily driven by higher interest income from investments in debt securities due to an overall increase in interest rates and also an increase in the amount of debt securities held.

Current wording

Total interest and other income, net was$8.6 million for thesix months ended June 30, 2024, compared to$6.9 million of interest and other income for thesix months ended June 30, 2023; this increase is primarily driven by higher interest income from investments in debt securities due to an overall increase in interest rates and also an increase in the amount of debt securities held.

Previous wording

Since our inception in 2016, we have incurred significant operating losses. As of March 31, 2024 and December 31, 2023, we had an accumulated deficit of $171.5 million and $195.0 million, respectively. We expect to generate significant operating losses and negative operating cash flows for the foreseeable future as we advance our platform and EEV therapeutic candidates. Since our inception, we have raised over $650.0 million of gross proceeds from sales of stock to leading biotechnology investors and from the Vertex Agreement. As of March 31, 2024, we had cash, cash equivalents and marketable securities of $327.4 million.

Current wording

Since our inception in 2016, we have incurred significant operating losses. As of June 30, 2024 and December 31, 2023, we had an accumulated deficit of $116.4 million and $195.0 million, respectively. We expect to generate significant operating losses and negative operating cash flows for the foreseeable future as we advance our platform and EEV therapeutic candidates. Since our inception, we have raised over $850.0 million of gross proceeds from sales of stock to leading biotechnology investors and from the Vertex Agreement. As of June 30, 2024, we had cash, cash equivalents and marketable securities of $469.7 million.

Previous wording

In September 2023, we entered into a sales agreement (the "Sales Agreement") with Cowen and Company, LLC (the "Sales Agent") under which we may, from time to time, issue and sell shares of our common stock having aggregate sales proceeds of up to $150.0 million, in a series of one or more ATM equity offerings (the "2023 ATM Program"). The Sales Agent is not required to sell any specific share amounts but acts as the Company’s sales agent, using commercially reasonable efforts consistent with its normal trading and sales practices. Pursuant to the Sales Agreement, shares will be sold pursuant to our shelf registration statement on Form S-3 (File No. 333-268099) filed with the SEC on November 1, 2022, including the base prospectus contained therein, as declared effective by the SEC on November 7, 2022. The Company’s common stock will be sold at prevailing market prices at the time of the sale, and as a result, prices may vary. As of March 31, 2024 we have not sold any shares of common stock under the 2023 ATM Program.

Current wording

In September 2023, we entered into a sales agreement (the "Sales Agreement") with Cowen and Company, LLC (the "Sales Agent") under which we may, from time to time, issue and sell shares of our common stock having aggregate sales proceeds of up to $150.0 million, in a series of one or more ATM equity offerings (the "2023 ATM Program"). The Sales Agent is not required to sell any specific share amounts but acts as the Company’s sales agent, using commercially reasonable efforts consistent with its normal trading and sales practices. Pursuant to the Sales Agreement, shares will be sold pursuant to our shelf registration statement on Form S-3 (File No. 333-268099) filed with the SEC on November 1, 2022, including the base prospectus contained therein, as declared effective by the SEC on November 7, 2022 (the "Shelf Registration Statement"). The Company’s common stock will be sold at prevailing market prices at the time of the sale, and as a result, prices may vary. As of June 30, 2024 we have not sold any shares of common stock under the 2023 ATM Program.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was $25.5 million, driven by net cash used in changes in our operating assets and liabilities of $51.6 million and non-cash items, primarily including stock-based compensation expense of $3.7 million, depreciation expense of $0.9 million, and accretion of premiums and discounts of $2.0 million, offset by our net income of $23.5 million.

Current wording

For thesix months ended June 30, 2024, net cash provided by operating activities was $14.3 million, driven by our net income of $78.5 million, as adjusted for non-cash items consisting of stock-based compensation expense of $8.4 million, depreciation expense of $1.8 million, and accretion of premiums and discounts of $4.3 million, partially offset by net cash used in changes in our operating assets and liabilities of $70.1 million.

Previous wording

For thethree months ended March 31, 2023, net cash provided by operating activities was $203.4 million, driven by our net loss of $6.7 million, net cash provided by changes in our operating assets and liabilities of $207.0 million primarily resulting from the upfront payment received in connection with the Vertex Agreement, and adjustments for non-cash expenses relating to stock-based compensation expense of $2.8 million, depreciation expense of $0.5 million, and accretion of premiums and discounts on marketable securities of $0.2 million.

Current wording

For thesix months ended June 30, 2023, net cash provided by operating activities was $168.3 million, driven by our net loss of $32.6 million, net cash provided by changes in our operating assets and liabilities of $195.6 million primarily resulting from the upfront payment received in connection with the Vertex Agreement, and adjustments for non-cash expenses relating to stock-based compensation expense of $5.9 million, depreciation expense of $1.3 million, and accretion of premiums and discounts on marketable securities of $1.9 million.

Previous wording

Net cash provided by investing activities was $26.1 million for the three months ended March 31, 2024, consisting primarily of $123.9 million from the maturities of marketable securities, partially offset by $96.9 million in purchases of marketable securities and $0.9 million of purchases of property and equipment.

Current wording

Net cash provided by investing activities was $1.8 million for thesix months ended June 30, 2024, consisting primarily of $211.3 million from the maturities of marketable securities, partially offset by $207.6 million in purchases of marketable securities and $1.9 million of purchases of property and equipment.

Previous wording

Net cash used in investing activities was $40.4 million for thethree months ended March 31, 2023, consisting primarily of $101.8 million in purchases of marketable securities, partially offset by $63.0 million from the maturities of marketable securities, and $1.6 million from our purchases of property and equipment.

Current wording

Net cash used in investing activities was $153.7 million for thesix months ended June 30, 2023, consisting primarily of $241.9 million in purchases of marketable securities and $3.2 million from purchases of property and equipment, partially offset by $91.4 million from the maturities of marketable securities.

Previous wording

Net cash provided by financing activities was $0.2 million for the three months ended March 31, 2024, consisting of $0.2 million in proceeds from stock option exercises.

Current wording

Net cash provided by financing activities was $101.6 million for thesix months ended June 30, 2024, consisting of $100.0 million of proceeds from sales of our common stock and pre-funded warrants, $1.3 million in proceeds from stock option exercises and $0.3 million from the issuance of common stock under our employee stock purchase plan.

Previous wording

Net cash provided by financing activities was $19.5 million for thethree months ended March 31, 2023, consisting of $19.4 million in net proceeds from the issuance of 1,618,613 shares in connection with the Vertex Agreement and $0.1 million of proceeds from stock option exercises.

Current wording

Net cash provided by financing activities was $20.0 million for thesix months ended June 30, 2023, consisting of $19.4 million in net proceeds from the issuance of 1,618,613 shares in connection with the Vertex Agreement, $0.4 million of proceeds from stock option exercises and $0.2 million from the issuance of common stock under our employee stock purchase plan.

Previous wording

We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and, if successful, the clinical development of our programs. In addition, we expect to incur additional costs associated with operating as a public company. Our operating expenses and future funding requirements are expected to increase substantially as we continue to advance our portfolio of programs. We believe that our cash, cash equivalents and marketable securities as of March 31, 2024, together with ongoing research support from Vertex and the $75 million clinical advancement milestone expected to be received in the second quarter of 2024, will be sufficient to extend our cash runway through the second quarter of 2026, supporting the Company's expansion and continued development of EEV therapeutic candidates targeting Duchenne muscular dystrophy and advance EEV-therapeutic candidates in indications beyond neuromuscular disease. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Current wording

We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and, if successful, the clinical development of our programs. In addition, we expect to incur additional costs associated with operating as a public company. Our operating expenses and future funding requirements are expected to increase substantially as we continue to advance our portfolio of programs. Based on our current operating plans, we believe that our cash, cash equivalents and marketable securities as of June 30, 2024 will be sufficient to fund our operations into 2027. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Previous wording

•the continuation of our current research programs and our preclinical development of therapeutic candidates from our current research programs;

Current wording

•the continuation of our current research programs and our clinical and preclinical development of therapeutic candidates from our current research programs;

Previous wording

We have also entered into license agreements under which we are obligated to make certain payments. During the three months ended March 31, 2024, there were no material changes to our commitments and contingencies related to our license agreements from those described in “Business—Intellectual property— License agreement with The Ohio State University” and Note 10, Commitments and Contingencies, to our financial statements in the Annual Report, with the exception of the sublicense fee owed to OSIF that we accrued in connection with the milestone achieved in the first quarter of 2024 under the Vertex Agreement. For additional information regarding our license agreements, refer to Note 11, Commitments and Contingencies, to our condensed consolidated financial statements in this Quarterly Report.

Current wording

We have also entered into license agreements under which we are obligated to make certain payments. During the three months ended June 30, 2024, there were no material changes to our commitments and contingencies related to our license agreements from those described in “Business—Intellectual property— License agreement with The Ohio State University” and Note 10, Commitments and Contingencies, to our financial statements in the Annual Report, with the exception of the sublicense fee paid to OSIF in July of 2024 that we accrued for as of June 30, 2024 in connection with the milestone achieved in the first quarter of 2024 under the Vertex Agreement. For additional information regarding our license agreements, refer to Note 11, Commitments and Contingencies, to our condensed consolidated financial statements in this Quarterly Report.