TCR² Therapeutics Reports Third Quarter 2019 Financial Results and Provides Corporate Update

Nov 12, 2019

CAMBRIDGE, Mass., Nov. 12, 2019 (GLOBE NEWSWIRE) -- TCR2Therapeutics Inc. (Nasdaq: TCRR), a clinical-stage immunotherapy company developing the next generation of novel T cell therapies for patients suffering from cancer, today announced financial results for the third quarter ended September 30, 2019 and provided a corporate update.

“We continued to make clinical progress in the third quarter of 2019 and are positioned to deliver data for our two lead programs next year with interim updates anticipated from the ongoing Phase 1 portion of the TC-210 trial and the upcoming Phase 1 portion of the TC-110 trial," said Garry Menzel, Ph.D., President and Chief Executive Officer of TCR2 Therapeutics. "2020 represents an important period for the Company in establishing TRuC-T Cells as a viable therapeutic option for cancer patients. We look forward to providing updates not only on TC-210 and TC-110 but also on additional targets and enhancements designed to combat the harsh tumor microenvironment.”

Recent Developments

  • TCR2 expanded the executive team with the appointment of Angela Justice, Ph.D., as its first Chief People Officer. In her new role, Dr. Justice will be responsible for leading all aspects of TCR2’s human resources function including further development of the Company’s commitment to a performance-driven culture of innovation and Human Capital strategy. 

Anticipated Milestones

  • TCR2 anticipates an interim update of the Phase 1 portion of the TC-210 Phase 1/2 clinical trial for patients with mesothelin-expressing solid tumors in 1H20.
  • TCR2 anticipates an interim update of the upcoming Phase 1 portion of the TC-110 Phase 1/2 clinical trial for patients with CD19+ non-Hodgkin lymphoma or adult acute lymphoblastic leukemia in 2H20.
  • TCR2 remains on track to be operational at its manufacturing facility in Stevenage, UK, by year end.

Financial Highlights

  • Cash Position: TCR2 ended the third quarter of 2019 with $169.0 million in cash, cash equivalents, and investments compared to $123.2 million as of December 31, 2018. Net cash used in operations was $31.0 million in the first nine months of 2019 compared to $12.3 million in the first nine months of 2018. TCR2 projects net cash use of $45-50 million in 2019.
     
  • R&D Expenses: Research and development expenses were $11.4 million for the third quarter of 2019 compared to $5.4 million for the third quarter of 2018. The increase in R&D expenses is primarily related to increase in headcount, activities related to the Phase 1/2 clinical trial of the Company’s lead solid tumor product candidate, TC-210, and activities related to the IND submission of the Company’s lead hematologic cancer product candidate, TC-110.
     
  • G&A Expenses: General and administrative expenses were $3.5 million for the third quarter of 2019 compared to $1.7 million for the third quarter of 2018. The increase in general and administrative expenses was primarily due to an increase in personnel costs and costs associated with operations as a public company.
     
  • Net loss: Net loss was $13.8 million for the third quarter of 2019 compared to $6.4 million for the third quarter of 2018, driven predominantly by increased R&D expense in the quarter.

Upcoming Events

TCR2 Therapeutics management are scheduled to participate at the following upcoming conferences.

  • Jefferies 2019 London Healthcare Conference: Garry E. Menzel, Ph.D., President and Chief Executive Officer of TCR2 Therapeutics, will present on Wednesday, November 20, 2019 at 11:20AM GMT in London, UK.
  • The 31st Annual Piper Jaffray Healthcare Conference: M. Ian Somaiya, Chief Financial Officer of TCR2 Therapeutics, will present on Wednesday, December 4, 2019 at 9:30AM ET in New York, NY.

About TCR2 Therapeutics

TCR2 Therapeutics Inc. is a clinical-stage immunotherapy company developing the next generation of novel T cell therapies for patients suffering from cancer. TCR2’s proprietary T cell receptor (TCR) Fusion Construct T cells (TRuCTM-T cells) specifically recognize and kill cancer cells by harnessing signaling from the entire TCR, independent of human leukocyte antigens (HLA). In preclinical studies, TRuC-T cells have demonstrated superior anti-tumor activity compared to chimeric antigen receptor T cells (CAR-T cells), while exhibiting lower levels of cytokine release. The Company’s lead TRuC-T cell product candidate, TC-210, is currently being studied in a Phase 1/2 clinical trial to treat patients with mesothelin-positive non-small cell lung cancer (NSCLC), ovarian cancer, malignant pleural/peritoneal mesothelioma, and cholangiocarcinoma. For more information about TCR2, please visit www.tcr2.com.

Forward-looking Statements

This press release contains forward-looking statements and information within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. The use of words such as "may," "will," "could", "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "projects," "seeks," "endeavor," "potential," "continue" or the negative of such words or other similar expressions can be used to identify forward-looking statements. These forward-looking statements include, but are not limited to, express or implied statements regarding anticipated timing of updates from TCR2’s ongoing Phase 1 portion of the TC-210 clinical trial in 1H20, the upcoming Phase 1 portion of the TC-110 clinical trial in 2H20, and additional targets and platform enhancements, and TCR2’s expectations with respect to its manufacturing capabilities, and financial resources.

The expressed or implied forward-looking statements included in this press release are only predictions and are subject to a number of risks, uncertainties and assumptions, including, without limitation: uncertainties inherent in clinical studies and in the availability and timing of data from ongoing clinical studies; whether interim results from a clinical trial will be predictive of the final results of the trial; whether results from preclinical studies or earlier clinical studies will be predictive of the results of future trials; the expected timing of submissions for regulatory approval or review by governmental authorities, including review under accelerated approval processes; orphan drug designation eligibility; regulatory approvals to conduct trials or to market products; TCR2’s ability to maintain sufficient manufacturing capabilities to support its research, development and commercialization efforts, whether TCR2's cash resources will be sufficient to fund TCR2's foreseeable and unforeseeable operating expenses and capital expenditure requirements; and other risks set forth under the caption "Risk Factors" in TCR2’s most recent Annual Report on Form 10-K, most recent Quarterly Report on Form 10-Q and its other filings with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although TCR2 believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur.

Moreover, except as required by law, neither TCR2 nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements included in this press release. Any forward-looking statement included in this press release speaks only as of the date on which it was made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Investor and Media Contact:

Carl Mauch
Director, Investor Relations and Corporate Communications
(617) 949-5667
carl.mauch@tcr2.com


TCR2 THERAPEUTICS INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)

  September 30, 2019     December 31, 2018  
Assets              
Current assets              
Cash and cash equivalents $ 49,317     $ 47,674  
Investments   111,688       75,493  
Prepaid expenses and other current assets   5,612       2,326  
Total current assets   166,617       125,493  
               
Property and equipment, net   4,463       1,638  
Investments, non-current   8,014       -  
Restricted cash   417       290  
Deferred offering costs   -       2,012  
Total assets $ 179,511     $ 129,433  
               
Liabilities, redeemable convertible preferred stock and stockholders equity (deficit)              
Accounts payable $ 3,621     $ 2,663  
Accrued expenses and other current liabilities   4,262       2,802  
Total current liabilities   7,883       5,465  
               
Other liabilities   474       434  
Total liabilities   8,357       5,899  
               
Redeemable convertible preferred stock              
Series A preferred stock, $0.0001 par value; no shares and 45,000,000 authorized at September 30, 2019 and December 31, 2018; no shares and 44,500,001 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively.   -       72,980  
Series B preferred stock, $0.0001 par value; no shares and 62,500,000 authorized, issued, and outstanding at September 30, 2019 and December 31, 2018, respectively.   -       136,250  
Total redeemable convertible preferred stock   -       209,230  
               
Stockholders’ equity (deficit)              
Preferred stock, $0.0001 par value. 10,000,000 shares and no shares authorized, no shares issued or outstanding at September 30, 2019 and December 31, 2018, respectively.   -       -  
Common stock, $0.0001 par value; 150,000,000 and 20,988,730 shares authorized at September 30, 2019 and December 31, 2018, respectively; 24,033,032 and 914,602 shares issued at September 30, 2019 and December 31, 2018, respectively; 23,944,083 and 726,990 shares outstanding at September 30, 2019 and December 31, 2018, respectively.   2       -  
Additional paid-in capital   340,686       -  
Accumulated other comprehensive income (loss)   230       (106 )
Accumulated deficit   (169,764 )     (85,590 )
Total stockholders’ equity (deficit)   171,154       (85,696 )
Total liabilities, redeemable preferred stock and stockholders’ equity (deficit) $ 179,511     $ 129,433  


TCR2 THERAPEUTICS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except share and per share data)

  For the Three Months
Ended September 30,
    For the Nine Months
Ended September 30,
 
  2019     2018     2019     2018  
Operating expenses                              
Research and development $ 11,374     $ 5,386     $ 28,096     $ 13,454  
General and administrative   3,522       1,704       9,715       4,558  
Total operating expenses   14,896       7,090       37,811       18,012  
Loss from operations   (14,896 )     (7,090 )     (37,811 )     (18,012 )
                               
Interest income, net   1,090       702       3,039       1,451  
Net loss   (13,806 )     (6,388 )     (34,772 )     (16,561 )
                               
Accretion of redeemable convertible preferred stock to redemption value   -       (11,590 )     (49,900 )     (33,568 )
Net loss attributable to common stockholders $ (13,806 )   $ (17,978 )   $ (84,672 )   $ (50,129 )
                               
Per share information                              
Net loss per share of common stock, basic and diluted $ (0.58 )   $ (27.25 )   $ (4.21 )   $ (83.83 )
                               
Weighted average shares outstanding, basic and diluted   23,874,593       659,840       20,125,955       597,964  


TCR2 THERAPEUTICS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)

  For the Nine Months Ended September 30,  
  2019     2018  
Operating activities:              
Net loss $ (34,772 )   $ (16,561 )
Adjustments to reconcile net loss to cash used in operating activities:              
Depreciation and amortization   558       303  
Stock-based compensation expense   4,597       1,290  
Accretion on short-term investments   (280 )     (183 )
Changes in operating assets and liabilities:              
Prepaid expenses and other current assets   (3,335 )     500  
Accounts payable   489       568  
Accrued expenses and other liabilities   1,697       1,775  
Cash used in operating activities   (31,046 )     (12,308 )
               
Investing activities:              
Purchase of investments   (126,534 )     (36,039 )
Proceeds from sale or maturity of investments   82,990       12,990  
Purchases of equipment   (3,060 )     (938 )
Cash used in investing activities   (46,604 )     (23,987 )
               
Financing activities:              
Proceeds from the sale of Series B preferred stock, net of issuance costs   -       124,830  
Proceeds from initial public offering, net of issuance costs   79,121       -  
Proceeds from the exercise of stock options   299       218  
Deferred offering costs   -       (792 )
Cash provided by financing activities   79,420       124,256  
               
Net increase in cash, cash equivalents, and restricted cash   1,770       87,961  
Cash, cash equivalents, and restricted cash at beginning of year   47,964       20,101  
Cash, cash equivalents, and restricted cash at end of period $ 49,734     $ 108,062  

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Source: TCR2 Therapeutics

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