TransCode Therapeutics, Inc. (NASDAQ:RNAZ) Q4 2021 Earnings Conference Call April 7, 2022 4:30 PM ET
Company Participants
Alan Freidman – Vice President, Investor Relations
Michael Dudley – Co-Founder, Chief Executive Officer, and Director
Thomas Fitzgerald – Vice President and Chief Financial Officer
Zdravka Medarova – Chief Technology Officer
Conference Call Participants
Operator
Hello, thank you for standing by and welcome to the TransCode Therapeutics Conference Call. At this time, all participants are in a listen only-mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference may be recorded. [Operator Instructions]
I would now like to hand the conference over to your speaker today, Alan Freidman, Vice President of Investor Relations. Please go ahead.
Alan Freidman
Thank you, Josh and thank you everyone for joining us. As Josh mentioned, my name is Alan Friedman, VP of Investor Relations at TransCode Therapeutics. I’ll be your host today for the call. I’ll be joined by CEO and President, Michael Dudley; CFO, Tom Fitzgerald; and CTO, Dr. Zdravka Medarova.
We a press release on March 31st summarizing our financial results in progress across the company for 2021. A copy of this release is available through our website at transcodetherapeutics.com, where you can also find a link to our current investor deck. Following the Safe Harbor statement, Michael will provide an overview of TransCode’s operational highlights after which Tom will discuss our financial results, which will be followed by Dr. Medarova, who will provide an update on a development program. Finally, Michael will offer some concluding comments and then we will open up the call for Q&A. The webcast replay of the call will be available on TransCode’s website.
I would like to remind everyone that remarks about future expectation constitutes forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. TransCode Therapeutic caution that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated. Several factors can cause actual results to differ materially from those indicated by forward-looking statements, including the impact of COVID-19 pandemic, timing and results of clinical trials and the impact of competition.
Additional information concerning factors that could cause actual results to different material from those in the forward-looking statements can be fined in our annual report on Form 10-K to the year ended December 31st, 2021, which is on filed with the SEC and available on our website. Forward-looking statements made on this conference call are as of today April 7th, 2022. TransCode Therapeutics does not intend to update any forward-looking statements to reflect events that occur after today unless required by law.
And with that, I’d like to turn the call over to Michael, President and CEO of TransCode Therapeutics. Michael, please go ahead.
Michael Dudley
Thank you, Alan and thank you all for joining us on our earnings call today. I’m happy to be on the call with our — my colleagues, Alan, Tom and Zdravka.
During 2021 and continuing into 2022, we have made considerable progress. I’m very proud of the efforts and achievements our team has made in 2021. We continue to move forward on multiple fronts as we prepare to enter the clinic with our lead therapeutic candidate. There are many genetic targets linked to cancer and metastasis in dozens of solid tumor types. Targeting these genes of interest requires different approaches, including RNA interference or RNAi, turning on the immune system using Pattern Recognition Receptors as well as gene replacement or repair using CRISPR and cancer vaccines using messenger RNA.
As the RNA oncology company, we are developing therapeutic candidates in each of these four distinct RNA approaches to treat cancer. We believe that what sets us apart and should enable the effectiveness of our approaches is that we’ve developed a proprietary system to safely deliver RNA therapeutics that have been optimized to generic targets inside tumor cells and metastases. If we achieve the results we expect in our first-in-human clinical trial, we believe it will represent a game changing breakthrough in cancer treatment. We believe our lead therapeutic candidate has tremendous potential because it targets an RNA molecule, that’s already been shown to be the driver of metastatic disease across 18 different tumor types. And that has been extensively validated in our own lab and then over 200 peer reviewed publications by others.
As indicated in our recent filing, we intend to file our eIND for our first-in-human clinical study to take place later this year. We expect that this trial will provide proof of mechanism for what we call our TTX platform. We believe that after we demonstrate delivery success in our first-in-human study, we can expose the power and potential of RNA therapeutics on oncology for the first time. And in the process, take the next steps to potentially help millions of patients around the world.
Besides our powerful science platform, we have an extensive IP portfolio, a highly experienced management team, Board of Directors and advisory group. And we have demonstrated that we are very capital efficient. Our therapeutic platform has grown considerably from a single asset to six therapeutic assets and two diagnostic assays that we are advancing.
As I mentioned, our lead therapeutic candidate TTX-MC138 is on schedule to enter the clinic this year. Our other therapeutic candidates were in various stages of development from discovery to preclinical assessment. And we’re excited about all of these candidates to treat cancer using a variety of RNA approaches.
Just last year, nearly 10 million people around the world died from cancer, more than COVID-19 to date. And this happens on an annual basis. And metastatic disease accounts for nearly 90% of those cancer deaths. Metastasis occurs when tumors — tumor cells leave the primary tumor in organ of origin and travel to other parts of the body. And even though there’s an enormous unmet need, current cancer treatments do not specifically target metastatic tumor cells, but ours does. Our lead therapeutic candidate targets an RNA molecule known as microRNA-10b, which has been proven responsible for metastatic tumor cell migration, invasion and survival of these cells in multiple tumor types.
Our preclinical studies show that TTX-MC138 inhibited microRNA-10b resulting in the regression of established metastases with no recurrence and no toxicity. TTX-MC138 has broad therapeutic potential since it targets — its target is expressed across 18 different tumor types. So, it has the potential to be a significant drug, should we achieve clinical results that mirror the results we’ve achieved in animals.
Our approach to drug development takes advantage of our rapidly expanding knowledge about the human genome, especially the knowledge about what different genes are responsible for in cancer. Armed with this knowledge, we can take advantage of the coded nature of the genome to design synthetic RNA molecules known as oligonucleotides, that correspond to generic targets of interest. Once we determine the generic code of this cancer target, we can synthesize an oligo that’s harmonized to that target. And that’s what TransCode really means to convert the code. We believe that what gives us this distinct advantage over others is the key component of our module or toolbox, our delivery system. Our proprietary delivery system can be modified to pre-designed specifications for delivery of therapeutic oligos to tumors and metastases throughout the body.
Clinically relevant delivery of oligonucleotides to tumor cells outside the liver has remained a significant challenge for decades. To put it simply, there’s been a general lack of success in direct targeting of RNAs to tumor cells. Yet the major generic targets responsible for the initiation of cancer and metastasis lies within the tumor cell. Literature of bounds in these target, which — of which are currently being pursued using monoclonal antibodies or small molecules, however most are on undruggable without an RNA approach.
Our unique strategy leverages nanoparticle that’s been successfully used for decades as an imaging agent that is known to also accumulate in metastatic sites. We have repurposed this nanoparticle to deliver RNA therapeutics. And this known delivery success is why we’re so excited about our potential.
Aside from TTX-MC138 for treatment of metastasis, two of our other therapeutic candidates also have broad potential in treatment of a variety of solid tumor types. The first is an RNAi approach to PD-L1. Our immune system utilizes T-cells, cells that are designed to help the body fight infections and other diseases, including cancer. However, cancer cells can escape T-cells by expressing a protein called PD-L1. PD-L1 works like a stop sign to inactivate T-cells. Checkpoint inhibitors like Keytruda, Tecentriq and Yervoy and others work to block PD-1 and PD-L1 expression.
However, our approach is quite different. We prevent the synthesis of PD-L1 at the cellular level altogether rather than attempt to block its function. We believe our approach has the potential to be more efficient, which could lead to earlier T-cell recognition of tumors and result in tumor cell death. We also believe we are the only company that is targeting PD-L1 using an RNAi mechanism.
We have recently started preclinical studies for this therapeutic candidate in pancreatic cancer models and animals. The results so far are very encouraging, and we expect to publish this data later this year.
Our third therapeutic candidate that we are advancing into animal studies is TTX-RIGA targeting cancer via the RIG-I pathway. A gene called the retinoic acid inducible gene, or RIG-I, is a Pattern Recognition Receptor of our innate immune system. RIG-I recognizes RNA structures like viruses that have a distinct signature and once recognized it can go to work to eradicate those viruses. RIG-I engagement can also lead to an immune response against cancer. Once the body’s immune system has been activated is theorized that it would develop immunity, rejecting tumors as foreign. Tumor rejection induced by RIG-I activation has already been reported in multiple cancer types. Our therapeutic candidate and preclinical development is intended to activate RIG-I inside tumor cells to elicit an immune response against those cancer cells.
By combining our proprietary delivery system with our therapeutic design engine, we believe we can save valuable time and capital resources as we evaluate new targets and design new cancer therapies. Once one therapeutic candidate is designed against one specific generic target, we can then determine which generic target to go after next and employ our toolbox to create and optimized therapeutic to that new target. In fact, there are dozens of relevant generic targets associated with cancer against which we could design therapeutics. So, we have the potential to develop libraries if therapeutic agents optimize against molecular targets depending on the RNA approach selected.
More importantly, allows us to conduct development in a very cause effective manner as Tom Fitzgerald, our CFO, will indicate as he walks you through our financials.
To shed more light on that, Tom, our CFO, will provide an overview of the full year financial results. Tom?
Thomas Fitzgerald
Thank you, Michael and good afternoon, everyone. I will now share some financial highlights from the year ended December 31st, 2021.
Our R&D expenses were $2.8 million for 2021, up from $284,000 in 2020. Most of the increase in R&D expense was attributable to increases in manufacturing related expenses for product candidates, to research studies we conducted and to increased R&D payroll expenses. General and administrative expenses were $3.4 million for 2021 compared to $440,000 the prior year. The increase reflects both our cost of operating as a public company and personnel expenses, which we did not have in 2020.
Our net loss for 2021 was $6.8 million or $0.81 per share compared to $2.3 million or $0.51 per share for 2020. As of December 31st, 2021, we had nearly 13 million shares of common stock outstanding, options for about 1,000,007 shares and warrants to purchase 312,500 shares. These warrants and options combined with our outstanding shares gave us a total fully diluted shares outstanding of approximately 15 million as of December 31st, 2021.
Our cash position at December 31st, 2021 was $20.8 million. This balance is expected to carry us into the first quarter of 2023. Importantly, we believe our financial position will support our planned first-in-human trial and continued development of our TTX platform, as well as our portfolio of other targeted oncology drug candidates.
Like many during COVID, we have implemented a hybrid work environment. I’m proud to say that our team continues to be very productive under this operating model. The hybrid model also removes geographic restrictions to our hiring initiatives, which gives us the ability to recruit extremely high caliber team members that otherwise might not be available. We currently have 14 employees who are primarily focused on advancing our research and development efforts, quality systems, and on business operations. We see this number expanding slightly in coming quarters, as we add additional experienced and talented individuals to help advance our mission.
I will now turn the call over to Zdravka for an update on some of our development programs. Zdravka?
Zdravka Medarova
Thank you, Tom. Good afternoon, everyone. I will start by providing a brief update on scientific progress made with each of our preclinical candidates and will finish by outlining the current state of our development program for our lead candidate TTX-MC138.
As Michael mentioned, we have six therapeutic candidates and two diagnostic assays. Our first preclinical candidate is TTX by PD-L1, a novel checkpoint inhibitor. In the past year, we have performed animal studies in a highly aggressive model of pancreatic cancer that closely mimics human disease. We have obtained evidence of efficacy in this model, similar to our earlier animal studies.
Another preclinical candidate is TTX-siLin28b. This is siRNA against Lin28b, a gene that promotes pancreatic and other gastrointestinal cancers. We have carried out laboratory studies using human cells, confirming the mechanism, linking Lin28b to pancreatic cell survival. These findings implied that by inhibiting this gene, TTX-siLin28b can have efficacy against pancreatic cancer.
Our third preclinical therapeutic candidate is TTX-RIGA. As Michael described, this is an immunomodulator that activates the immune system against cancer. We have now performed extensive mechanistic studies confirming that the unique and proprietary mechanism behind our approach is indeed effective. A publication of these studies is planned for later this year.
Our fourth and fifth therapeutic candidates are TTX-mRNA and TTX-CRISPR. Both candidates rely on the ability to deliver long coding RNAs to tumor cells unlike our other assets that incorporate short non-coding RNAs. Delivering long coding RNAs requires new chemistry for binding the RNA to the TTX platform, that is different from the chemistry for conjugating short non-coding RNAs. We have now obtained evidence that the chemistry of binding long coding RNAs to the TTX platform is indeed feasible.
Our two diagnostic candidates include a screening and a diagnostic assay for measuring microRNA abundance in patient blood. We have carried out studies using patient blood to demonstrate the capacity of these two assays to measure our microRNA-10b expression in human samples. We have also obtained results in a small cohort of patients with metastatic cancer, demonstrating that we can accurately differentiate these patients from healthy subjects based on microRNA-10b expression in blood.
I will finish by updating you on current progress with our lead therapeutic candidate TTX-MC138 for the treatment of metastatic cancer by inhibition of microRNA-10b. We have advanced our CMC program with this agent and are currently scaling up production for our clinical program. We have also developed and validated analytical protocols to support CMC development.
To support our first-in-human, eIND study, we have developed a protocol to radiolabeled the therapeutics and have completed CMC activities of the [indiscernible]. Our eIND-enabling studies are completed as scheduled and depending on the timing of FDA approval, we anticipate initiating the first-in-human trial this year. Concurrently, we have wind up IND-enabling studies to advance the agent into Phase 1 trial.
Lastly, it is important to highlight the purpose of the Phase 0 first-in-human study we plan to conduct later this year. It’s effective delivery of RNA therapeutics inside tumor cells remains an unsolved challenge. We think it is important to first prove that we can do that. No matter how effective an RNA therapeutic candidate may be, if it cannot get inside the tumor, it’ll be of no benefit.
The intent of the Phase 0 trial is to prove delivery, but also importantly to measure the concentration of drug that we can achieve in the metastatic lesions. This information is critical to be able to calculate our anticipated therapeutic dose, the dose expected to be needed to replicate our preclinical effectiveness. This knowledge will then guide our dose selection for plant 1, 2 trials, and together with the information on safety that will gather from the Phase 1 trial will effectively frame the anticipated therapeutic window of our drug candidate prior to later stage trials.
This clinical trial approach is indeed innovative, but Phase 0 trials are gaining in popularity precisely because of their capacity to gather critical information in support of later stage trials, importantly addressing the issue of delivery should open up our entire pipeline and extends the potential of our platform to target literally dozens of other generic targets that are important in cancer treatment.
Now, I will hand it back over to Michael.
Michael Dudley
Thank you, Zdravka. Appreciate it. Before I open it up to questions, I can provide just a brief recap.
We’re obviously very excited about our therapeutic candidates that we’ve created to make up of our platform. And as Dr. Medarova indicated the importance of our Phase 0 clinical trial this year is to prove not only delivery of synthetic RNAs to metastatic lesions, but also to establish a minimum dose required to achieve efficacy in patients with metastatic disease.
Current delivery systems in the RNA space are only able to deliver approximately 2% of their therapeutic cargo inside cancer cells. We have shown that our delivery system can deliver up to 98% uptake of our drug inside cancer cells. It is this for — this very reason that we’re so excited about our potential to create dozens of therapeutic candidates that could really move the needle on a positive way in helping treat patients.
So, with that, I’ll ask Josh to open up for questions.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions]
And our first question comes from Patrick Mullen with Derrick Capital [ph]. You may proceed with your question.
Unidentified Analyst
Yeah. Hi, Mike. I was just wondering if you could be any more specific on start date for the Phase 0.
Michael Dudley
Hi, Patrick. Good to hear from you. Yes, we’re still on target to file the eIND application. It’s probably going to be around the July timeframe as we indicated in our10-K recent filing. And then, depending on FDA approval, we’ve — and again, we had previously mentioned that we’re going to be conducting the study at the Termeer Center at MGH. And so — and they’re prepared to have patients ready once we have that approval.
Unidentified Analyst
And is it still expected 10 patients or so?
Michael Dudley
Yes, it is.
Unidentified Analyst
And how long will you have to follow them?
Michael Dudley
It’s a short period of time. As you know, it’s a single dose study, so we’ll evaluate the results of that single dose. Again, looking at the successful delivery of our therapeutic radiolabeled therapeutic, using a micro dose and evaluating delivery success using PET-MRI. And we can quantitate the delivery success as well, which will give us that information that Dr. Medarova talked about to quantify the specific minimum dose that will be required to achieve efficacy in our Phase 1. So, again, it’s not following the patients for long.
Unidentified Analyst
Right. So, in terms of being able to report back the results for public consumption, roughly how long will it take after the final patient is gone through?
Michael Dudley
Again, it’s — the final report, which that usually takes some of the time after the fact, but if we can lock down the trial and we might be able to report some initial findings, not too long after we complete it.
Unidentified Analyst
Alright. Thanks. Good luck.
Michael Dudley
Thanks.
Operator
Thank you. And I’m not showing any further questions at this time. I would now like to turn the call back over to Michael Dudley for any further remarks.
Michael Dudley
Thanks Josh. Appreciate it. And thanks everyone for joining. We certainly appreciate everyone’s interest and attention. And obviously, we’re excited about the potential that we have, and we continue to move forward in a real positive direction. So, we thank everyone for joining us today.
Operator
Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.
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