TransCode Therapeutics, Inc. (RNAZ) Earnings Call Transcript

Hello. This is Craig Bassford with RedChip Companies. Thank you for joining today's event with TransCode Therapeutics, which trades on the NASDAQ under the ticker RNAZ. Joining us today is Philippe Calais Chairman and CEO of TransCode, Zdravka Medarova, Co-Founder and Chief Scientific Officer; and John Tattory, the interim CFO. We will begin with a brief presentation in a moment and then we will open the event to your questions. Welcome to everyone joining us today on X, YouTube, LinkedIn and other social media platforms. [Operator Instructions] Before we begin, please allow me to read the safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results, along with other statements about the future expectations, beliefs, goals, plans or prospects expressed by management constitute forward-looking statements. Any statements that are not historical facts should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties. Philippe, please go ahead.

Great. Thank you very much, and hello, everybody. It's a pleasure to have the opportunity to describe our company today. And let's jump in right away into the company overview. We really describe ourselves as a rare small cap company with 3 near-term catalysts. First of all, we have a very strong degree with some Harvard founders, and he is one of them. She will be talking later on. From Mass General and Harvard Medical School. The company was founded in 2016. It became public in 2021 and has a fairly good financial profile so far with no long-term debt and we are basically pioneering approaches that are complementary and that aim at redefining the boundaries of advanced cancer. We have 3 key pillars there, the first of which is the RNA-targeted therapeutics that is prioritized. Then we have vaccine immunotherapy product that mobilize the immune system and then we have also immuno-oncolytic agents that directly target tumors. We will focus primarily on the prioritized asset, which are the RNA therapeutics. If we look at our focus, we are targeting an area that is marked by right in our very strong medical need in the sense that the advanced disease in cancer is the major source of death and reducing significantly the survival of the patient. You have some graphs here highlighting in different diseases, prostate, female color female breast, colorectal, lung and melanoma cancer, doing the fiber relative survival that is significantly reduced as patients are moving into the advanced stages of cancer. This is not only just a major have burden for the patient, but it's also for society and also for the health care system. If we look at the organization, we are a small company. We have 12 employees. All of them are experts into their own field. And we also surrounded by a very strong consulting group of experts that are basically a handful of them that are specialized in their own area, whether this is on the clinical side, on the strategic side or on translational science. Our Board of Directors is comprised of people who have demonstrated strong experience in developing and being successful with exits in the biotech sector and our Scientific Advisory Board is comprised of one of the co-founders who was working with [indiscernible] She is also the Chair of the Scientific Advisory Board, but we have people like [ Keyla Frank's ] like who are well-known leaders in the field of oncology. So very, very strong team there. If we look at our pipeline, this is a fairly busy slide. But as I said earlier on, we have prioritized the

I'm terribly sorry. I'm not seeing the slides being advanced.

Oh, because I see them, sorry. I have them advancing, sorry about that. So how can I resolve that? No, I guess you see the pipeline now, Victor?

Right now, we're seeing innovative and differentiated pipeline, yes.

So that's the pipeline.

And if you could move it into presentation mode so that we don't see all the...

That's what I have in front of me yes. But you don't have that. Do you?

I'm not seeing that, right? Okay. Just continue that way. It's okay.

All right. Well, I'm sorry about that. Sorry, everyone for that. So we're going to try to go around that. So as I said earlier on, we have prioritized TTX-MC138 for the development. We have the cancer vaccine that I mentioned early on. We have a number of additional programs that are at a preclinical stage. And with this, I'm going to turn to Z, who is going to describe TTX-MC138. And do you see right now the cover page for the -- for TTX-MC138?

No, we do not.

So there's a real problem there. I don't know. Because as soon as I move into a presentation, then it seems to be stuck.

Please don't be in presentation and just click on the slides on the -- your little left hand, that would be the way to solve it.

All right. Z it's all yours.

So as Philippe mentioned, our lead candidate is TTX-MC138. This is a drug that we originally conceived of and designed the Massachusetts General Hospital. The whole idea was to design a drug that's going to be broadly applicable to metastatic cancers, irrespective of where these tumors originated, whether they're pancreatic, breast, lung, liver cancer, et cetera. So we looked for a molecule that is critical to the development of metastases from all of these cancers. And we identified the target micro [indiscernible] 10B such molecule that was originally described by Bob Weinberg, a scientist at MIT. To inhibit this target, we designed [ antagomir ] Tacoma, which is an antisense molecule, an oligonucleotide molecule that binds to microRNA 10B through Watson Creek base bearing and inhibit it -- in order to deliver this [ antagomir ] we also conjugated it to a platform, which now we call TDX. It's an iron oxide nanoparticle, which we redesigned to make it optimal for delivery to tumors and metastasis. These particles were originally developed as contrast agents for MRI. But in our case, they were significantly redesigned for the delivery of nucleic acids. Currently, this drug is in a Phase IIa trial and we'll present more details to you in the coming slides. Next slide. So in terms of the clinical development plan for TTX-MC138, we've made quite a bit of progress. We started with a Phase I trial -- this is a trial in which we injected a microdose, a miniscule dose of the drug, radio labeled with copper 64 and image the delivery of the drug by PET MRI, which is an approach that will allow us to see the biodistribution of the drug in the body of a human patient. We enrolled a patient with metastatic breast cancer and as we will show in the coming slides, we confirm delivery to clinical metastases in this patient. We also completed a Phase Ia trial with the main endpoint being the safety of this drug in patients with various advanced solid tumors. We are currently enrolling patients in a Phase III trial, and we'll speak more about that trial in the coming slides. We're hoping that at the end of the Phase IIa trial, we have sufficient information to then initiate our randomized Phase II trial, which, if successful, could be pivotal and lead to FDA approval. These are the results from the Phase 0 trial that I already mentioned. In this trial, we enrolled a patient with breast cancer, metastatic to bone, lungs and liver. The image on the left is the pre-dose image. The lesions are highlighted by the arrows. So you can see the bone, lung and liver metastases in that patient. On the right is an image obtained 3 hours after dosing with the drug. And what you can see from these images is that indeed, the drug does accumulate in these metastatic lesions. In addition to accumulation of the drug in metastatic regions, we also showed that the drug is well tolerated, which is not surprising given that it was injected at the micro dose. But this study was important because it allowed us to see what is the bioavailability of this drug. In a human patient, this drug was shown to be delivered to metastases in animal models and were shown to also be highly effective in these animal models, leading to complete regressions of metastatic disease in these animals. So as a first step towards translating this drug in humans, we needed to show that indeed, it accumulates in clinical metastases, and we accomplished that through this Phase I trial. Next slide. In the Phase Ia trial, as I mentioned, the primary endpoint was safety with exploratory endpoints of pharmacokinetics and also preliminary clinical activity. The important conclusion from the Phase IIa trial, which tested 4 different doses of this drug ranging between 0.8 and 4.8 milligrams per kilogram was that the drug was very safe we had only 3 infusion-related reactions in 2 of the patients that were treated with this drug. This is seen in 16 different patients that received around 86 doses of the drug. In terms of clinical activity, the median duration, which in this case, equated to progression-free survival was 5 months with the longest duration being 15 doses as of the last public disclosure of our data. We currently still have 3 patients on study as of December 2025. The reason this is important is because these are very heavily pretreated patients that typically once they fail this therapy go on to periodic care. So these are patients that have failed all other therapies, including other clinical trials with experimental therapeutics than enter our trial. So the fact that we're seeing a median progression-free survival of 5 months with some patients lasting for 15 months or longer is a meaningful readout indicating that indeed the drug is clinically active in these patients. This is a list of the different tumor types that were represented in our trial. You can see that we have a wide variety of cancer types. We have pancreatic cancer, we have breast cancer. We have 3 patients with colorectal denocarcinoma, we have a patient with uterine cancer, kidney cancer and thyroid cancer. So a wide array of patients and as mentioned, with respect to the previous slide, there was quite a meaningful increase in progression-free survival in all of these patients relative to what 1 would expect typically in a Phase Ia trial. We met the primary endpoint of safety across all 4 dose 2.8 and 4.8 milligrams per kilogram. We had three, as I mentioned, 3 infusion-related reactions of which 1 qualified as an SAE and 2 were grade 2. So this indicates that the drug was indeed found to be very safe in that Phase I trial. Next slide. And this is a more detailed list of this adverse event frequency and nature that was observed in this trial. One thing that I needed to remind you is that most of these adverse events were found to not be drug-related. As I mentioned earlier, the only drug-related adverse events were 3 infusion-related reactions. In terms of the exploratory endpoint of determining drug pharmacokinetics, these are a couple of graphs that show 2 things. The first thing, the graph on the left shows that the terminal half-life of the drug is about 24 hours. The drug has biphasic clearance with initial rapid clearance followed by a second slow phase of clearance. This is pretty typical for these sorts of drugs. And in this case, reflects accumulation of the drug in tissue. As it leaves the blood and enters the interstitium of various tissues. The graph on the right represents drug exposure or AUC as a function of dose and the main point of this graph is that there's a super proportional relationship between dose and drug exposure, meaning that if you increase the dose twofold, you get a more than twofold increase in drug bioavailability in the blood of the patients. Next slide. These are the preliminary clinical activity data that we obtained. If you look at the graph on the bottom right, that shows the progression-free survival in all of the evaluable patients, irrespective of dose and you can see that the progression-free survival is quite high. It's found to be 71%. The swimmers plot on the top right then breaks down these by individual patients. And what you can see is that a proportion of the patients actually stayed on treatment for 6 months or more and that a large number of the patients, actually, all but 2 of the patients were qualified to have stable disease viruses criteria. That constitutes over 80% of the patients that had stable disease. So what that indicates is that the drug indeed has a very powerful cytostatic effect and it stabilizes disease in a large proportion of the patients, irrespective of the cancer type that they have. This is a highlight of the patient with thyroid cancer, which was an interesting case study in that patient -- the levels of thyroglobulin increased throughout disease progression which is [ darglobinin ] is a biomarker of residual disease. This patient had lung metastases from thyroid cancer. What we saw though was that by cycle 6 of treatment with this drug. [indiscernible] levels went down to undetectable. That patient then was put on a treatment holiday and you could see the [indiscernible] levels rose again, but began to drop off again as we initiate treatment. So this is, at this point, a preliminary indicator of the powerful effect that the drug has on the levels of this tumor biomarker presumably by putting the cells into dormant stasis. The Phase IIa trial was designed to evaluate the effect of the drug in patients with colorectal adenocarcinoma. These were patients -- these are patients that have been treated successfully through surgery and adjuvant chemotherapy and our free of detectable disease. However, these patients become ctDNA positive. ctDNA is a tumor marker found in the blood of these patients, which is highly predictive of radiographic recurrence within 12 months. In excess of 80% of patients that have no evidence of visible disease in their body, but our ctDNA positive will actually become radiographically disease positive within 12 months of becoming ctDNA positive. So that's a very high-risk population of CRC patients, which we are enrolling in our Phase II trial, they are being treated with TTX-MC138. The idea is that we're either going to eliminate or reduce the levels of ctDNA in their blood and most importantly, delay or completely prevent radiographic recurrence in these patients, and these are the endpoints of the trial. This trial is done in collaboration with Quantum Leap. This is an academic partner that we have, which has multiple clinical sites throughout the country. We've listed some of these sites in the table on the right. Using Quantum Leap leverages the established clinical network that they have and is a very efficient and rapid way to progress through this trial by having access to the wide array of clinical sites that they have. I already alluded to this in the earlier slide. We will select patients or we are selecting patients that are ctDNA positive that have undergone therapy with curative intent. The plan is to enroll 45 patients to treat them with the RP2D established in the Phase Ia trial. We will treat these patients for up to 12 cycles and then monitor ctDNA to see if we're reducing or eliminating ctDNA as a tumor marker from their blood. And importantly, if we are also delaying or preventing disease recurrence. A few words about the delivery vehicle that we're using in this trial. That's a platform, which we call TTX. We have both in our academic life and currently as TransCode, use this platform to deliver more than simply nucleic acids. It's a highly versatile platform that could be used to deliver peptides, small molecules, tetramers, small proteins, radionuclides, as I mentioned, with respect to the Phase 0 trial. So it's a platform that is potentially quite broad and could be partnered out for the delivery of various payloads to tumors and metastases.

All right. Thank you very much. So let's have a quick look at the finance -- and first of all start with the recent corporate development. As a reminder, we acquired [ Polinoma ] last October. That's almost a year ago, that's 11 months ago. And we had at the same time, an investment from CK license of $25 million in order to prioritize the funding of the Phase IIa study. In the first quarter of 26, we licensed the immuno [indiscernible] portfolio from English immuno-oncolytic and in the second quarter, we entered into an agreement with Yorkville for a 20 million CPA. So these are the major corporate development over the last year. And that allows us to move into the capital structure, and I will turn to John to comment on that.

Sure. Thank you, Philippe. As of our last reporting of actual results as of June 30, at the time, we had approximately 1 million common shares outstanding and a market cap of $6.3 million. Importantly, what's happened since then as a result of a shareholder approval. The all Series A, Series B and Series C preferred stock has been converted into common shares. And so on a pro forma basis, we would have had approximately 17 million common shares outstanding as of June. And based on the latest share price, we had a pro forma market cap of about $28 million. We have no debt. The company has no debt on the balance sheet. And on a pro forma basis, we had $13.1 million as of June. That is $8.4 million of reported cash and $4.75 million of proceeds from the July 2026 convertible note transaction.

Thanks a lot, so if we move into the investment thesis, and that will be the last couple of slides that will be presented we are basically building an innovative and differentiated oncology company that aims at meaningfully improving the treatment of advanced cancer. So feeling really a gap in the armamentarium against cancer with different treatment modalities. Our strategic focus is to have to develop a balanced and scalable portfolio. This is what I call the 3 shots on goal and with some near-term clinical value creation and platform-driven innovation. From that, because of the limited funds, we have prioritized TTX-MC138 clinical development with a number of catalysts that will happen in the next 18 months. surrounding the completion of the Phase IIa study. And we have a pipeline that is really built for differentiation and scale because the other products are of a different nature. [ SeviProlymet ] is an antigen vaccine that targets melanoma. It's, in fact, in some respect, it came under the light recently with the announcement of the positive results of the Moderna Merck study. So that is really very exciting. And also the development of our TTX proprietary delivery engine that could be a very good candidate for partnering, in particular, outside of oncology. And finally, the development of our engineered adenovirus oncolytic program that has a very strong immunogenicity and targets bladder cancer. So all of this can only happen with quite a lot of capital an organizational discipline in terms of execution. And the recent transaction were structured in order to avoid some heavy upfront financial commitment and also, we are working on improving the communication for the company. And I think today's webcast is a good example of that. What are the near-term catalysts and knowing that each of them has the potential to be a good inflection point. In the second quarter, we announced the initiation of the Phase II way. In the third quarter, we are looking for announcing the enrollment update. Last quarter, we will be looking towards the end of the quarter at the preliminary results of the first patients that entered the study in the first half of next year, we will have some initial results that will be of -- no, sorry, the final results of the Phase I that will be announced at a major oncology conference, and we will have an enrollment completion announcement for the Phase IIa. Second half in we will complete the Phase IIa study and have a preliminary readout and also, in parallel, we will have some announcements regarding some preclinical assets we are working on writing up, and they should be getting closer to IND. So basically, what TransCode has to offer today is really an exposure to a fully differentiated platform that is built around the 3 shots on goal that I mentioned earlier on. And we have, today, as you have seen, a valuation that remains let's say, modest to use the best possible term relative to the breadth of our pipeline and the advancement of the program because let's not forget that -- we have a Phase III RED program. We have a Phase II ongoing right now. So we believe that TransCode is really targeted for investors who seek exposure to technology with multiple inflection points in the near future. With this, we are completing our corporate presentation, and we will be very happy to answer any questions.

[Operator Instructions] Philippe and team, what is the expected time line for an initial data readout from the Phase IIa PREI SPY colorectal trial -- and would that be an interim or a full data set?

We are looking at an announcement, as I mentioned previously in the slide towards the end of this year, beginning of next year with the first patients that will have entered the trial and will have a few month exposure. We can certainly identify some trends very early in the process because the biomarker that we are using from Natera, which is ctDNA, is being done on a monthly basis. So that will allow us to monitor the level of positivity of that test. And then the -- once we have fully enrolled all the patients, we are looking at an initial readout of the final results by the end of '27.

Thank you, Philippe. Are there any additional indications? For example, glioblastoma given the preclinical publication where TransCode plans to file an IND or begin dosing in the near term. I will turn to Z to answer that one.

Yes. We're actively working towards advancing this drug in glioblastoma in collaboration with Henry Ford and Michigan State University. We are working towards a clinical trial to try to answer the question -- the main question, which is delivery to glioblastoma tumors. So there are plans to advance this asset into glioblastoma.