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113.ROC
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2024
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____________ to _____________
Commission File Number: 001-39485
TANGO THERAPEUTICS, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware |
85-1195036 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer
Identification No.) |
201 Brookline Ave., Suite 901 Boston, MA |
02215 |
(Address of principal executive offices) |
(Zip Code) |
(857) 320-4900
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common stock, par value $0.001 per share |
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TNGX |
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Nasdaq Global Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 1, 2024, the registrant had 107,417,818 shares of common stock, $0.001 par value per share, outstanding.
Table of Contents
Summary of Material Risks Associated with Our Business
Our business is subject to numerous material and other risks that you should be aware of before making an investment decision with respect to our securities. These risks are described more fully in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023. These risks include, among others, the following (which is not an exhaustive list of all such risks):
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We are a precision oncology company with a limited operating history. We have no products approved for commercial sale, have not generated any revenue from product sales and may never become profitable. Further, we face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do. |
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We have incurred significant net losses since our inception and anticipate that we will continue to incur losses for the foreseeable future. We expect our operating results to fluctuate significantly in the future as our business advances. |
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We will need to raise substantial additional funding. If we are unable to raise capital when needed or on terms acceptable to us, we would be forced to delay, reduce or eliminate some of our product development programs or commercialization efforts. Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. |
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We have never successfully completed any clinical trials and we may be unable to do so for any product candidates we develop. Certain of our programs are still in preclinical development and may never advance to clinical development. |
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Our programs are focused on the development of oncology therapeutics for patients with genetically defined or biomarker-driven cancers, which is a rapidly evolving area of science, and the approach we are taking to discover and develop drugs is novel and may never lead to approved or marketable products. |
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If we are unable to successfully validate, develop and obtain regulatory approval for screening tests and companion diagnostic tests for our product candidates that require or would commercially benefit from such tests, or experience significant delays in doing so, we may not realize the full commercial potential of these product candidates. We will also rely on third-parties for screening for biomarkers that enable patient selection for trials. |
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Clinical product development involves a lengthy and expensive process, with an uncertain outcome. Further, our current and potential future collaborations may not realize the anticipated benefits. |
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Initial, interim and top-line data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to confirmation, audit and verification procedures that could result in material changes in the final data. |
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Results from earlier preclinical studies of our programs and product candidates are not necessarily predictive of the results of later preclinical studies and clinical trials of our programs and product candidates. If we cannot replicate the results from our earlier preclinical studies of our programs and product candidates in our later preclinical studies and clinical trials, we may be unable to successfully develop, obtain regulatory approval for and commercialize our product candidates. |
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If we experience delays or difficulties in the initiation, enrollment or dosing of patients in clinical trials, the announcement of clinical trial results and our receipt of necessary regulatory approvals (if any) could be delayed or prevented. |
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Our clinical trials or those of our current or future collaborators may reveal significant adverse events not seen in our preclinical or nonclinical studies and may result in a safety profile that could inhibit regulatory approval or market acceptance of any of our product candidates. |
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Some of our product candidates modulate pathways for which there are currently no approved or effective therapies, and utilize novel binding locations, which may result in greater research and development expenses, regulatory issues that could delay or prevent approval, or discovery of unknown or unanticipated adverse effects. |
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If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for our product candidates, we will not be able to commercialize, or will be delayed in commercializing, our product candidates, and our ability to generate revenue will be materially impaired. |
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Public health crises may materially and adversely affect our business and our financial results and could cause a disruption to the development of our product candidates and the initiation and completion of clinical trials. |
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We currently rely and expect to continue to rely on third parties to conduct our clinical trials, as well as investigator-sponsored clinical trials of our product candidates (if any). If these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed. |
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We contract with third parties for the manufacture of our product candidates for preclinical development and clinical trials and expect to continue to do so for future clinical testing and commercialization (if approved). This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts. |
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We rely on a very limited number of third parties for the supply of the active pharmaceutical ingredients ("API") and drug product to be used in our product candidates (for the active pharmaceutical ingredient for all of our clinical trial products, an affiliate of WuXi AppTec is the sole source of all of such supply), and WuXi AppTec has been the subject of recently proposed Congressional legislation that, if approved, could materially restrict our ability to conduct business with, and obtain API from WuXi AppTec, and the loss of any of these suppliers, including WuXi AppTec, could significantly harm our business. |
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If we cannot obtain new patents, maintain our existing patents and protect the confidentiality and proprietary nature of our trade secrets and other intellectual property, our business and competitive position may be harmed. |
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If we are found to be infringing third party patents, we may be forced to pay damages to the patent owner and/or obtain a license to continue the manufacture, sale or development of our products. If we cannot obtain a license, we may be prevented from the manufacture, sale or development of our products or product candidates, which may adversely affect our business. |
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Development of combination therapies may present more or different challenges than development of single agent therapies. |
Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains express or implied forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as "anticipates," "continue," "could," "may," "forecasts," "expects," "intends," "plans," "potentially," "believes," "seeks," "estimates," "predict," "target," and variations of such words and similar expressions are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such statements. Such forward-looking statements are based on current expectations, estimates and projections about our industry and business, management's beliefs, and certain assumptions made by our management, and may include, but are not limited to, statements regarding:
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the initiation, timing, progress, results, and cost of our research and development programs and our current and future preclinical studies and clinical trials and combination clinical trials, including statements regarding the timing of IND filings and acceptance, active enrollment in clinical trials (including combination clinical trials), dosing in clinical trials, future plans for dose expansions, and initiation and completion of studies or clinical trials and related preparatory work, and the period during which the results of the clinical trials (including initial and final trial results) will become available (such as additional clinical data from the ongoing TNG462 clinical trial expected in 2025); |
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our ability to discover and develop product candidates efficiently (including the advancement of development candidates on the timelines identified and the ability to identify and contract with clinical trial sites and investigators to use our product candidates in trials); |
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our ability and potential (or those of third parties) to manufacture our drug product, drug substance and product candidates successfully for preclinical use, for clinical trials and on a larger scale for commercial use, if approved; |
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the ability and willingness of our third-party strategic collaborators to license and to continue research and development activities relating to our development candidates and product candidates; |
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our ability to obtain funding for our operations necessary to complete further research, development and commercialization of our product candidates (and that existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements at least into the third quarter of 2026); |
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our ability to obtain and, if approved, maintain regulatory approval of our product candidates (as well as approval of screening tests and companion diagnostic tests for our product candidates) and the potential paths to approval in the first line setting for TNG462 in combination; |
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our ability to commercialize our products, if approved; |
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the pricing and reimbursement of our product candidates, if approved; |
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the implementation of our business model, and strategic plans for our business and product candidates; |
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the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and our ability to enforce our intellectual property rights; |
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estimates of our future expenses, capital requirements, and our need for additional financing; |
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the potential benefits of strategic collaboration agreements, our ability to enter into strategic collaborations or arrangements, and our ability to attract collaborators with development, regulatory and commercialization expertise; |
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future agreements with third parties in connection with the commercialization of product candidates (if approved) and any other approved products; |
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the size and growth potential of the markets for our product candidates, and our ability to serve those markets; |
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our financial performance, including the expectation that we will continue to incur operating losses and negative cash flow; |
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the rate and degree of market acceptance of our product candidates, if approved; |
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regulatory developments in the United States and foreign countries, including product approval requirements and pricing regulations by U.S. regulators (such as Centers for Medicare & Medicaid Services) and foreign regulatory authorities; |
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our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately; |
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our ability (or the ability of third parties with whom we contract) to produce our products or product candidates with advantages in turnaround times or manufacturing cost; |
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our ability to deliver the deep, sustained target inhibition necessary to optimize tumor response and clinical benefit as a result of the unique ability of synthetic lethal targeting to spare normal cells, as well as the success of competing therapies that are or may become available; |
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our ability to attract and retain key scientific or management personnel; |
|
|
|
|
|
• |
|
the impact of laws and regulations; |
|
|
|
|
|
• |
|
developments relating to our competitors and industry; |
|
|
|
|
|
• |
|
the effect of public health crises on our business operations, including but not limited to our preclinical studies and clinical trials and any future studies or trials; |
|
|
|
|
|
• |
|
the expected benefits of the use of our drugs in patients as single agents and/or in combination, including our belief that TNG260 could be among the first oncology molecules to leverage the benefits of genetically-based patient selection (STK11-mutation) with checkpoint inhibitor therapy; and |
|
|
|
|
|
• |
|
other risks and uncertainties, including those identified in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 - in both cases, see section titled “Risk Factors.” |
The forward-looking statements contained in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 and Part II, Item 1A of this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. There may be additional risks that we currently consider immaterial or which are unknown. It is not possible to predict or identify all such risks. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
USE OF DEFINED TERMS IN THIS QUARTERLY REPORT ON FORM 10-Q
Unless the context otherwise requires in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, we use the following defined terms:
i.“the Company”, “we”, “our” and “us” mean Tango Therapeutics, Inc. and its wholly-owned subsidiaries;
ii.“Business Combination” means the merger of BCTG Merger Sub Inc. with and into Tango Therapeutics, Inc. (now known as Tango Therapeutics Sub, Inc.) on August 10, 2021, with Tango Therapeutics, Inc. as the surviving company in the merger as a wholly-owned subsidiary of BCTG Acquisition Corp. (now known as Tango Therapeutics, Inc.);
iii.“CoREST” means Co-repressor of Repressor Element-1 Silencing Transcription;
iv.“Gilead” means Gilead Sciences, Inc.;
v.“GBM” means glioblastoma;
vi.“HRD+” means homologous recombination deficient;
vii.“MTA” means methylthioadenosine;
viii.“MTAP” means methylthioadenosine phosphorylase;
ix.“NSCLC” means non-small cell lung cancer;
x.“PRMT5” means protein arginine methyltransferase 5;
xi.“Quarterly Report” means this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024;
xii.“SDMA” means symmetric di-methylation of specific arginine
xiii.“STK11” means serine-threonine kinase 11; and
xiv.“USP1” means ubiquitin-specific protease 1.
Corporate Information
We were formerly known as BCTG Acquisition Corp. (“BCTG”) and were incorporated in Delaware in May 2020 as a special purpose acquisition company, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination. On August 10, 2021, we consummated the merger pursuant to the Agreement and Plan of Merger, dated as of April 13, 2021, by and among BCTG, BCTG Merger Sub Inc. and Tango Therapeutics Sub, Inc. Upon the consummation of the merger, we changed our name to Tango Therapeutics, Inc.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available through the “Investors” portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”). We also make available, free of charge on our website, the reports filed with the SEC by our executive officers, directors and 10% stockholders pursuant to Section 16 under the Exchange Act as soon as reasonably practicable after copies of those filings are provided to us by those persons. Accordingly, investors should monitor such portions of the Company’s website, in addition to following the Company’s press releases, SEC filings and public conference calls and webcasts (if any). Information on our website is not to be deemed to be incorporated by reference in, and is not part of, this Quarterly Report on Form 10-Q or any of our other securities filings, unless specifically incorporated herein by reference, and should not be relied upon in making a decision as to whether or not to purchase our common stock. Our filings with the SEC may be accessed through the SEC’s Interactive Data Electronic Applications system at http://www.sec.gov. All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.
Further, the Company intends to use its website at http://www.tangotx.com as a means of disclosing material non-public information and for complying with its disclosure obligations under the SEC Regulation FD. Such disclosures will be included on the Company’s website under the heading “Investors.” Accordingly, investors should monitor such portions of the Company’s website, in addition to following the Company’s press releases, SEC filings and public conference calls and webcasts (if any). The information contained on, or that may be accessed through, the website is not part of, and is not incorporated into, this Quarterly Report on Form 10-Q.
Our principal executive office is located at 201 Brookline Avenue, Suite 901, Boston, Massachusetts 02215.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
TANGO THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
September 30,
2024 |
|
|
December 31,
2023 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
53,148 |
|
|
$ |
66,385 |
|
Marketable securities |
|
|
240,130 |
|
|
|
270,500 |
|
Restricted cash |
|
|
— |
|
|
|
856 |
|
Prepaid expenses and other current assets |
|
|
7,537 |
|
|
|
8,797 |
|
Total current assets |
|
|
300,815 |
|
|
|
346,538 |
|
Property and equipment, net |
|
|
8,590 |
|
|
|
9,908 |
|
Operating lease right-of-use assets |
|
|
40,430 |
|
|
|
43,508 |
|
Restricted cash, net of current portion |
|
|
2,567 |
|
|
|
2,567 |
|
Other assets |
|
|
13 |
|
|
|
46 |
|
Total assets |
|
$ |
352,415 |
|
|
$ |
402,567 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
4,112 |
|
|
$ |
2,785 |
|
Accrued expenses and other current liabilities |
|
|
15,006 |
|
|
|
15,401 |
|
Operating lease liabilities |
|
|
2,863 |
|
|
|
2,082 |
|
Deferred revenue |
|
|
15,602 |
|
|
|
25,670 |
|
Total current liabilities |
|
|
37,583 |
|
|
|
45,938 |
|
Operating lease liabilities, net of current portion |
|
|
34,763 |
|
|
|
36,838 |
|
Deferred revenue, net of current portion |
|
|
50,899 |
|
|
|
66,683 |
|
Total liabilities |
|
|
123,245 |
|
|
|
149,459 |
|
Commitments and contingencies (Note 7) |
|
|
|
|
|
|
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares
issued and outstanding as of September 30, 2024 and December 31, 2023, respectively |
|
|
— |
|
|
|
— |
|
Stockholders' equity: |
|
|
|
|
|
|
Common stock, $0.001 par value; 200,000,000 shares
authorized at September 30, 2024 and December 31, 2023, respectively;
107,414,636 and 102,202,759 shares issued and outstanding as of
September 30, 2024 and December 31, 2023, respectively |
|
|
107 |
|
|
|
102 |
|
Additional paid-in capital |
|
|
692,201 |
|
|
|
624,076 |
|
Accumulated other comprehensive income |
|
|
750 |
|
|
|
186 |
|
Accumulated deficit |
|
|
(463,888 |
) |
|
|
(371,256 |
) |
Total stockholders’ equity |
|
|
229,170 |
|
|
|
253,108 |
|
Total liabilities and stockholders’ equity |
|
$ |
352,415 |
|
|
$ |
402,567 |
|
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
TANGO THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Collaboration revenue |
|
$ |
11,607 |
|
|
$ |
10,732 |
|
|
$ |
25,852 |
|
|
$ |
26,096 |
|
License revenue |
|
|
— |
|
|
|
— |
|
|
|
12,100 |
|
|
|
5,000 |
|
Total revenue |
|
|
11,607 |
|
|
|
10,732 |
|
|
|
37,952 |
|
|
|
31,096 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
33,263 |
|
|
|
27,149 |
|
|
|
109,981 |
|
|
|
83,859 |
|
General and administrative |
|
|
11,222 |
|
|
|
9,209 |
|
|
|
32,656 |
|
|
|
26,397 |
|
Total operating expenses |
|
|
44,485 |
|
|
|
36,358 |
|
|
|
142,637 |
|
|
|
110,256 |
|
Loss from operations |
|
|
(32,878 |
) |
|
|
(25,626 |
) |
|
|
(104,685 |
) |
|
|
(79,160 |
) |
Other income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
1,809 |
|
|
|
1,872 |
|
|
|
6,077 |
|
|
|
4,383 |
|
Other income, net |
|
|
1,956 |
|
|
|
1,514 |
|
|
|
6,135 |
|
|
|
3,883 |
|
Total other income, net |
|
|
3,765 |
|
|
|
3,386 |
|
|
|
12,212 |
|
|
|
8,266 |
|
Loss before income taxes |
|
|
(29,113 |
) |
|
|
(22,240 |
) |
|
|
(92,473 |
) |
|
|
(70,894 |
) |
Provision for income taxes |
|
|
(54 |
) |
|
|
(23 |
) |
|
|
(159 |
) |
|
|
(87 |
) |
Net loss |
|
$ |
(29,167 |
) |
|
$ |
(22,263 |
) |
|
$ |
(92,632 |
) |
|
$ |
(70,981 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share – basic and diluted |
|
$ |
(0.27 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.85 |
) |
|
$ |
(0.78 |
) |
Weighted average number of common shares outstanding – basic and diluted |
|
|
108,507,390 |
|
|
|
97,033,273 |
|
|
|
108,990,011 |
|
|
|
91,268,133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(29,167 |
) |
|
$ |
(22,263 |
) |
|
|
(92,632 |
) |
|
|
(70,981 |
) |
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on marketable securities |
|
|
1,084 |
|
|
|
836 |
|
|
|
564 |
|
|
|
3,024 |
|
Comprehensive loss |
|
$ |
(28,083 |
) |
|
$ |
(21,427 |
) |
|
$ |
(92,068 |
) |
|
$ |
(67,957 |
) |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
TANGO THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Accumulated
Other |
|
|
|
|
|
Total |
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
(Loss) Income |
|
|
Deficit |
|
|
Equity |
|
Balance at December 31, 2023 |
|
|
102,202,759 |
|
|
$ |
102 |
|
|
$ |
624,076 |
|
|
$ |
186 |
|
|
$ |
(371,256 |
) |
|
$ |
253,108 |
|
Issuance of common stock under stock plans |
|
|
526,826 |
|
|
|
1 |
|
|
|
1,258 |
|
|
|
— |
|
|
|
— |
|
|
|
1,259 |
|
At-the-market offerings, net of issuance costs |
|
|
4,001,200 |
|
|
|
4 |
|
|
|
41,719 |
|
|
|
— |
|
|
|
— |
|
|
|
41,723 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
6,719 |
|
|
|
— |
|
|
|
— |
|
|
|
6,719 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(443 |
) |
|
|
— |
|
|
|
(443 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(37,914 |
) |
|
|
(37,914 |
) |
Balance at March 31, 2024 |
|
|
106,730,785 |
|
|
$ |
107 |
|
|
$ |
673,772 |
|
|
$ |
(257 |
) |
|
$ |
(409,170 |
) |
|
$ |
264,452 |
|
Issuance of common stock under stock plans |
|
|
313,455 |
|
|
|
— |
|
|
|
1,311 |
|
|
|
— |
|
|
|
— |
|
|
|
1,311 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
7,538 |
|
|
|
— |
|
|
|
— |
|
|
|
7,538 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(77 |
) |
|
|
— |
|
|
|
(77 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,551 |
) |
|
|
(25,551 |
) |
Balance at June 30, 2024 |
|
|
107,044,240 |
|
|
$ |
107 |
|
|
$ |
682,621 |
|
|
$ |
(334 |
) |
|
$ |
(434,721 |
) |
|
$ |
247,673 |
|
Issuance of common stock under stock plans |
|
|
370,396 |
|
|
|
— |
|
|
|
2,402 |
|
|
|
— |
|
|
|
— |
|
|
|
2,402 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
7,178 |
|
|
|
— |
|
|
|
— |
|
|
|
7,178 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,084 |
|
|
|
— |
|
|
|
1,084 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(29,167 |
) |
|
|
(29,167 |
) |
Balance at September 30, 2024 |
|
|
107,414,636 |
|
|
$ |
107 |
|
|
$ |
692,201 |
|
|
$ |
750 |
|
|
$ |
(463,888 |
) |
|
$ |
229,170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Accumulated
Other |
|
|
|
|
|
Total |
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Loss |
|
|
Deficit |
|
|
Equity |
|
Balance at December 31, 2022 |
|
|
88,179,374 |
|
|
$ |
88 |
|
|
$ |
522,605 |
|
|
$ |
(3,705 |
) |
|
$ |
(269,512 |
) |
|
$ |
249,476 |
|
Issuance of common stock under stock plans |
|
|
30,590 |
|
|
|
— |
|
|
|
73 |
|
|
|
— |
|
|
|
— |
|
|
|
73 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
4,219 |
|
|
|
— |
|
|
|
— |
|
|
|
4,219 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,504 |
|
|
|
— |
|
|
|
1,504 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(28,008 |
) |
|
|
(28,008 |
) |
Balance at March 31, 2023 |
|
|
88,209,964 |
|
|
$ |
88 |
|
|
$ |
526,897 |
|
|
$ |
(2,201 |
) |
|
$ |
(297,520 |
) |
|
$ |
227,264 |
|
Issuance of common stock under stock plans |
|
|
252,880 |
|
|
|
— |
|
|
|
586 |
|
|
|
— |
|
|
|
— |
|
|
|
586 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
5,121 |
|
|
|
— |
|
|
|
— |
|
|
|
5,121 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
684 |
|
|
|
— |
|
|
|
684 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(20,710 |
) |
|
|
(20,710 |
) |
Balance at June 30, 2023 |
|
|
88,462,844 |
|
|
$ |
88 |
|
|
$ |
532,604 |
|
|
$ |
(1,517 |
) |
|
$ |
(318,230 |
) |
|
$ |
212,945 |
|
Issuance of common stock under stock plans |
|
|
187,639 |
|
|
|
— |
|
|
|
441 |
|
|
|
— |
|
|
|
— |
|
|
|
441 |
|
Issuance of common stock from private placement financing, net |
|
|
13,196,671 |
|
|
|
14 |
|
|
|
79,762 |
|
|
|
— |
|
|
|
— |
|
|
|
79,776 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
4,860 |
|
|
|
— |
|
|
|
— |
|
|
|
4,860 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
836 |
|
|
|
— |
|
|
|
836 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(22,263 |
) |
|
|
(22,263 |
) |
Balance at September 30, 2023 |
|
|
101,847,154 |
|
|
$ |
102 |
|
|
$ |
617,667 |
|
|
$ |
(681 |
) |
|
$ |
(340,493 |
) |
|
$ |
276,595 |
|
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
TANGO THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2024 |
|
|
2023 |
|
Cash flows from operating activities |
|
|
|
|
|
|
Net loss |
|
$ |
(92,632 |
) |
|
$ |
(70,981 |
) |
Adjustments to reconcile net loss to net cash from
operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
1,879 |
|
|
|
1,798 |
|
Noncash operating lease expense |
|
|
2,791 |
|
|
|
2,692 |
|
Stock-based compensation |
|
|
21,435 |
|
|
|
14,200 |
|
Accretion on marketable securities |
|
|
(3,761 |
) |
|
|
(1,030 |
) |
Other, net |
|
|
33 |
|
|
|
22 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
— |
|
|
|
2,000 |
|
Prepaid expenses and other current assets |
|
|
1,259 |
|
|
|
(3,582 |
) |
Other long-term assets |
|
|
34 |
|
|
|
(42 |
) |
Accounts payable |
|
|
1,323 |
|
|
|
(1,617 |
) |
Accrued expenses and other liabilities |
|
|
(357 |
) |
|
|
(6,026 |
) |
Operating lease liabilities |
|
|
(1,006 |
) |
|
|
(1,853 |
) |
Deferred revenue |
|
|
(25,852 |
) |
|
|
(26,096 |
) |
Net cash used in operating activities |
|
|
(94,854 |
) |
|
|
(90,515 |
) |
Cash flows from investing activities |
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(630 |
) |
|
|
(1,300 |
) |
Sales and maturities of marketable securities |
|
|
243,035 |
|
|
|
268,423 |
|
Purchases of marketable securities |
|
|
(208,339 |
) |
|
|
(259,549 |
) |
Net cash provided by investing activities |
|
|
34,066 |
|
|
|
7,574 |
|
Cash flows from financing activities |
|
|
|
|
|
|
Proceeds from at-the-market offerings, net of issuance costs |
|
|
41,723 |
|
|
|
— |
|
Proceeds from issuance of common stock and pre-funded warrants, net of issuance costs |
|
|
— |
|
|
|
79,839 |
|
Proceeds from issuance of common stock upon exercise of stock options and purchase of shares under ESPP |
|
|
4,972 |
|
|
|
1,100 |
|
Net cash provided by financing activities |
|
|
46,695 |
|
|
|
80,939 |
|
Net change in cash, cash equivalents and restricted cash |
|
|
(14,093 |
) |
|
|
(2,002 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
|
69,808 |
|
|
|
63,958 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
55,715 |
|
|
$ |
61,956 |
|
Supplemental cash flow information: |
|
|
|
|
|
|
Cash paid for leases |
|
$ |
3,731 |
|
|
$ |
4,116 |
|
Supplemental disclosure of noncash investing and financing activity: |
|
|
|
|
|
|
Revaluation of right-of-use asset and lease liability upon lease remeasurement |
|
$ |
497 |
|
|
$ |
(228 |
) |
Financing offering costs included in accounts payable and accrued expenses |
|
$ |
— |
|
|
$ |
63 |
|
Capital expenditures included in accounts payable and accrued expenses |
|
$ |
3 |
|
|
$ |
— |
|
Operating lease liabilities from obtaining right-of-use assets |
|
$ |
210 |
|
|
$ |
— |
|
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
TANGO THERAPEUTICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.Nature of the Business and Basis of Presentation
Tango Therapeutics, Inc. is a precision oncology company committed to the discovery and development of novel drugs in defined patient populations with high unmet medical need.
Tango Therapeutics, Inc. (together with its consolidated subsidiaries, Tango or the Company), formerly known as BCTG Acquisition Corp. (BCTG), was incorporated in Delaware on May 21, 2020. BCTG was a special purpose acquisition company (SPAC) formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination.
At-the-Market Stock Offering
In September 2022, the Company entered into a sales agreement (the Sales Agreement) with Jefferies LLC (Jefferies), which permitted the Company to sell from time to time, at its option, up to an aggregate of $100.0 million of shares of its common stock through Jefferies, as sales agent. Sales of the common stock, if any, will be made by methods deemed to be "at-the-market" stock offerings. The Sales Agreement will terminate upon the earliest of: (a) the sale of $100.0 million of shares of the Company's common stock or (b) the termination of the Sales Agreement by the Company or Jefferies.
In January 2024, the Company sold 4,001,200 shares of common stock under this program for gross proceeds of $43.0 million.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The accompanying unaudited condensed consolidated financial statements reflect the operations of Tango and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. The functional and reporting currency of the Company and its subsidiaries is the U.S. dollar.
In the opinion of management, all adjustments necessary for a fair statement of the financial information, which are of a normal and recurring nature, have been made for the interim periods reported. Results of operations for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results for the year ending December 31, 2024, any other interim periods, or any future year or period. The unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023 have been prepared on the same basis as and should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on March 18, 2024.
2.Summary of Significant Accounting Policies
There have been no significant changes from the significant accounting policies disclosed in Note 2, Summary of Significant Accounting Policies, of the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, except as described below.
Use of Estimates
The preparation of consolidated financial statements requires that the Company make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosures. Significant estimates and assumptions made in the consolidated financial statements include, but are not limited to, the revenue recognized from collaboration agreements, the valuation of stock-based awards and the accrual for research and development expenses. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. As of the date of issuance of these consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update estimates, judgments or revise the carrying value of any assets or liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful lives of each asset. Estimated useful lives are periodically assessed to determine if changes are appropriate. The estimated useful lives of the Company’s property and equipment are as follows:
|
|
|
Asset |
|
Estimated useful life |
Computer equipment |
|
3 years |
Computer software |
|
3 years |
Furniture and fixtures |
|
5 years |
Laboratory equipment |
|
5 years |
Leasehold improvements |
|
Shorter of remaining lease term or 10 years |
The Company reviews long-lived assets, such as property and equipment, for impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. If indicators of impairment are present, the assets are tested for recoverability by comparing the carrying amount of the assets to the related estimated future undiscounted cash flows that the assets are expected to generate. If the expected cash flows are less than the carrying value of the asset group, then the asset group is considered to be impaired and its carrying value is written down to fair value, based on the related estimated discounted future cash flows. To date, no such impairment losses have been recorded.
Costs for assets not yet placed into service are capitalized as construction-in-progress and depreciated or amortized in accordance with the above useful lives once placed into service. Upon retirement or sale, the related cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations. Repairs and maintenance costs are expensed as incurred.
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on its consolidated financial statements and disclosures.
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The standard is intended to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Upon adoption, the standard should be applied retrospectively to all prior periods presented in the financial statements. The Company is evaluating the potential impact of this adoption on the consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The standard is intended to enhance the existing income tax disclosures to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The standard is effective for annual periods beginning after December 15, 2024. Upon adoption, the standard should be applied on a prospective basis, although retrospective application is permitted. Early adoption is permitted. The Company is evaluating the potential impact of this adoption on the consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." The standard is intended to require more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is evaluating the potential impact of this adoption on the consolidated financial statements and related disclosures.
3.Collaboration Agreements
In October 2018, the Company entered into a Research Collaboration and License Agreement (the 2018 Gilead Agreement) with Gilead Sciences, Inc. (Gilead). Pursuant to the terms of the 2018 Gilead Agreement, the Company received an initial upfront payment of $50.0 million. Gilead had the option to obtain exclusive, worldwide licenses to develop and commercialize up to five validated programs (Gilead Program License).
In August 2020, the Company and Gilead entered into an Amended Research Collaboration and License Agreement (the Gilead Agreement), which superseded and replaced the 2018 Gilead Agreement. The Gilead Agreement represents a continuation of the initial target discovery and validation research and development efforts begun under the 2018 Gilead Agreement. Under the Gilead Agreement:
•The Company received upfront, non-refundable consideration of $125.0 million from Gilead upon execution of the Gilead Agreement in 2020;
•The term of the 2018 Gilead Agreement ended on the date the Gilead Agreement was executed. The Gilead Agreement has a research term of seven years;
•Gilead expanded its option to license up to 15 programs for which Gilead may obtain exclusive, worldwide licenses to develop and commercialize therapies, subject to applicable license fees;
•Prior to exercising its option to license a program, Gilead may “extend” such program, in which case Gilead will pay research option-extension fees and the Company will continue to collaborate with Gilead to discover and develop programs, potentially through early clinical development;
•Gilead has the option to “reserve” a target during which Gilead may: (i) license the target, (ii) “extend” the target, or (iii) decline the target, during the designated reserve target period. If, during the reserve target period Tango elects to work on the reserved target, Tango will retain full rights to the target program and Gilead receives a right of first negotiation in connection with any future partnering or licensing of such target by Tango, if any; and
•For up to five programs licensed by Gilead, the Company has the option to co-develop and co-promote the lead product in the U.S., subject to certain exceptions, and is eligible to receive tiered royalties in the first decile on ex-U.S. sales.
The Company is eligible to receive up to $410.0 million per program in license, research option-extension, and clinical, regulatory, and commercial milestones and royalties on future sales of commercialized products, if any.
In August 2020, Gilead also made an equity investment of $20.0 million into the Company as a participant in the Company’s Series B-1 preferred stock offering. At the time of the original investment, including as of the September 30, 2024 balance sheet date, and based on current ownership of common stock, Gilead is not considered to be a related party to the Company.
Accounting for the Gilead Collaboration
The Gilead Agreement is accounted for under ASC 606. The Company identified a single combined performance obligation under the Gilead Agreement consisting of the research services and continued participation on the joint steering committee during the research term. For research option-extension fees, the Company determined that the additional goods and services relating to the continued research services were not distinct from the early-stage research services already promised to Gilead under the on-going research plan. Consideration pertaining to each of the research option-extensions is paid to the Company in equal quarterly installment payments over an agreed upon payment schedule. The research option-extension consideration are added to the transaction price under the Gilead Agreement. License fees are recognized as revenue immediately as the Company has no continued involvement in the advancement of the program, Gilead can benefit from the license on its own, and the license is separately identifiable from the research services.
Gilead Revenue Recognized
The total transaction price allocated to the combined performance obligation under the Gilead Agreement was $199.0 million at September 30, 2024. The total transaction price was comprised of the $50.0 million upfront payment pursuant to the 2018 Gilead Agreement, the $125.0 million upfront payment pursuant to the Gilead Agreement, and $24.0 million in payment pursuant to research option-extension fees in December 2020 and in September 2021. During the three months ended September 30, 2024 and 2023, the Company recognized $11.6 million and $10.7 million, respectively, and during the nine months ended September 30, 2024 and 2023, the Company recognized $25.9 million and $26.1 million, respectively, of collaboration revenue associated with the Gilead agreements based on performance completed during each period.
The Company reevaluates the transaction price and the total estimated costs expected to be incurred to satisfy the performance obligations at the end of each reporting period and as uncertain events, such as changes to the expected timing and cost of certain research and development activities that the Company is responsible for, are resolved or other changes in circumstances occur. As of September 30, 2024 and December 31, 2023, the Company had short-term deferred revenue of $15.6 million and $25.7 million, respectively, and long-term deferred revenue of $50.9 million and $66.7 million, respectively, related to the Gilead collaboration. The remaining long-term deferred revenue is expected to be recognized proportionally to the completed obligations over an expected remaining contractual term of approximately 2.9 years.
In June 2024, Gilead licensed a drug discovery program for a $12.0 million license fee. The $12.0 million license fee was recognized as revenue in the second quarter of 2024 as the Company has no continued involvement in the advancement of the program, Gilead can benefit from the license on its own, and the license is separately identifiable from the research services.
Amounts due to the Company that have not yet been received are recorded as accounts receivable and amounts received that have not yet been recognized as revenue are recorded as deferred revenue on the Company’s condensed consolidated balance sheets.
Costs incurred pursuant to the Gilead Agreement and the 2018 Gilead Agreement are recorded as research and development expense.
4.Fair Value Measurements
The following tables present information about the Company’s financial assets measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Market Value Measurements
as of September 30, 2024 |
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
|
|
(in thousands) |
|
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
11,145 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
11,145 |
|
Marketable debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury bills |
|
|
— |
|
|
|
230,562 |
|
|
|
— |
|
|
|
230,562 |
|
U.S. government agency bonds |
|
|
— |
|
|
|
9,568 |
|
|
|
— |
|
|
|
9,568 |
|
Total assets |
|
$ |
11,145 |
|
|
$ |
240,130 |
|
|
$ |
— |
|
|
$ |
251,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Market Value Measurements
as of December 31, 2023 |
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
|
|
(in thousands) |
|
Cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
14,361 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14,361 |
|
U.S. Treasury bills |
|
|
— |
|
|
|
4,710 |
|
|
|
— |
|
|
|
4,710 |
|
Marketable debt securities |
|
|
|
|
|
|
|
|
|