On November 14, 2023 Alaunos Therapeutics, Inc. ("Alaunos" or the "Company") (Nasdaq: TCRT), reported financial results for the third quarter ended September 30, 2023 (Press release, Alaunos Therapeutics, NOV 14, 2023, View Source [SID1234637648]). As previously announced, the Company is exploring strategic alternatives with Cantor Fitzgerald & Co. as its strategic advisor. Alaunos continues to reduce spend and cost-savings measures taken to date are expected to extend its cash runway into the second quarter of 2024.

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Operational & Corporate Update

Clinical Data from TCR-T Library Phase 1/2 Trial: Eight patients were treated and evaluated in the Company’s TCR-T Library Phase 1/2 Trial. Patients with pancreatic (3), colorectal (4) and non-small cell lung cancer (1) were treated, with certain of the pancreatic and colorectal patients also having lung metastases. Overall, the trial showed the Company’s T cells were well-tolerated in all evaluable participants with no dose-limiting toxicities (DLTs) and no immune effector cell-associated neurotoxicity syndrome (ICANS) were observed. All cytokine release syndrome (CRS) events were within grades 1-3 and were self-limiting or resolved with standard clinical management and, in some cases, a single dose of tocilizumab.

One patient with non-small cell lung cancer (NSCLC) achieved an objective partial response with six months progression-free survival. Six other patients achieved best overall response of stable disease. The total overall response rate was 13% and disease control rate was 87% in evaluable patients with advanced, metastatic, refractory solid tumors (see attached figure). Disease control was measured by objective responses and stable disease. Increased secretion of interferon-gamma relative to baseline was detected in all patients’ serum post-cell transfer suggesting recognition of the tumor by the infused TCR-T cells. Persistence of TCR-T cells in peripheral blood was detected in all evaluable patients at their last follow-up, including up to six months in one patient. Infiltration of TCR-T cells into the tumor was also detected in three samples where a fresh biopsy was collected suggesting homing to the tumor microenvironment. All patients have progressed or withdrawn from the trial and long-term follow-up is ongoing for a subset of patients with no further intervention per the treatment protocol. This trial established proof-of-concept that Sleeping Beauty TCR-T cells can result in objective clinical responses and recognize established tumors in vivo.

Despite the encouraging TCR-T Library Phase 1/2 Trial data, based on the substantial cost to continue development and the current financing environment, Alaunos announced in August 2023 that it would not pursue any further development of its clinical programs.

hunTR TCR Discovery Platform Identifies Proprietary TCRs: Alaunos has discovered multiple proprietary TCRs targeting driver mutations through its hunTR TCR discovery platform. In addition to TCRs that recognize KRAS and TP53 mutations similar to those licensed from the National Cancer Institute, the Company identified additional TCRs that bind to other driver mutations and TCRs that are restricted to additional HLAs. Alaunos believes that the hunTR library has the potential to allow for the treatment of a large patient population.

Strategic Alternatives: The Company continues to explore strategic alternatives, which may include but are not limited to, an acquisition, merger, reverse merger, sale of assets, strategic partnerships, capital raises or other transactions. In connection with the strategic reprioritization, the Company has reduced its workforce by approximately 80% to date in order to streamline the organization and to maximize its cash runway.

Third Quarter Ended September 30, 2023, Financial Results

Collaboration Revenue: Collaboration revenue was $0 for the third quarter of 2023, compared to $2.9 million for the third quarter of 2022. The decrease was due to revenue earned under the Solasia License and Collaboration Agreement in 2022 that did not recur in 2023.

Research and Development Expenses: Research and development expenses were $3.7 million for the third quarter of 2023, compared to $7.9 million for the third quarter of 2022, a decrease of approximately 54%. The decrease was primarily due to lower program expenses of $0.8 million as a result of our wind-down of clinical activities, a $0.6 million decrease in employee-related expenses due to our reduced headcount, an accrual adjustment related to our de-prioritized clinical programs of $0.3 million and a $2.5 million milestone payment to MD Anderson in 2022 under the terms of our patent and technology license agreement that did not recur in 2023.

General and Administrative Expenses: General and administrative expenses were $3.6 million for the third quarter of 2023, compared to $3.3 million for the third quarter of 2022, an increase of approximately 9%. The increase was primarily due to higher consulting and professional services expenses of $0.9 million related to increased legal costs, partially offset by a $0.4 million decrease in employee-related expenses due to our reduced headcount and a $0.2 million decrease in insurance fees.

Restructuring Costs: Restructuring costs were $0.4 million for the third quarter of 2023, compared to $0 for the third quarter of 2022 due to severance expenses for terminated employees related to our strategic reprioritization announced in August 2023.

Property and Equipment and Right-of-Use Asset Impairment: Property and equipment and right-of-use asset impairment charges were $1.0 million for the third quarter of 2023, compared to $0 for the third quarter of 2022 due to changes in the intended use of our property and equipment and lease right-of-use asset following the announcement of our strategic reprioritization in August 2023.

Net Loss: Net loss was $8.5 million, or $(0.04) per share, for the third quarter of 2023, compared to a net loss of $8.9 million, or $(0.04) per share, for the third quarter in 2022.

Cash, Cash Equivalents and Restricted Cash: As of September 30, 2023, Alaunos had approximately $11.9 million in cash balances. The Company expects to have sufficient cash resources to fund operations into the second quarter of 2024 as a result of its ongoing strategic reprioritization.