SEC Filing | Tango Therapeutics, Inc

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10-Q

usROC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐	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)


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:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.001 per share

TNGX

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.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

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 August 2, 2022, the registrant had 88,041,404 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29

PART II.	OTHER INFORMATION	30

Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	79
Item 3.	Defaults Upon Senior Securities	79
Item 4.	Mine Safety Disclosures	79
Item 5.	Other Information	79
Item 6.	Exhibits	79
Signatures		80

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. These risks are described more fully in the section of this Quarterly Report on Form 10-Q entitled “Risk Factors.” These risks include, among others, the following:


	•		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.


	•		We have incurred significant net losses since our inception and anticipate that we will continue to incur losses for the foreseeable future.


	•		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.


	•		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.


	•		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.


	•		If we are unable to successfully validate, develop and obtain regulatory approval for 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.


	•		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.


	•		Interim, top-line, and initial 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.


	•		Results from early 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.


	•		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.


	•		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.


	•		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.


	•		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.


	•		The COVID-19 pandemic, or a similar pandemic, epidemic, or outbreak of an infectious disease, 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.


	•		We expect 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.


	•		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.


	•		The third parties upon whom we rely for the supply of the active pharmaceutical ingredients and drug product to be used in our product candidates are our sole source of supply, and the loss of any of these suppliers could significantly harm our business.


	•		If we are unable to obtain and maintain patent and other intellectual property protection for our technology and product candidates or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully commercialize our technology and drugs may be impaired.


	•		We may be subject to damages or settlement costs resulting from claims that we or our employees have violated the intellectual property rights of third parties, or are in breach of our agreements.

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:


	•		the initiation, timing, progress, results, and cost of our research and development programs and our current and future preclinical studies and clinical trials, including statements regarding the timing of IND filings, active enrollment in clinical trials, 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;


	•		our ability to discover and develop product candidates efficiently (including the advancement of development candidates on the timelines identified);


	•		our ability and the potential to manufacture our drug substances and product candidates successfully for preclinical use, for clinical trials and on a larger scale for commercial use, if approved;


	•		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;


	•		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 second half of 2024);


	•		our ability to obtain and, if approved, maintain regulatory approval of our product candidates;

iii


	•		our ability to commercialize our products, if approved;


	•		the pricing and reimbursement of our product candidates, if approved;


	•		the implementation of our business model, and strategic plans for our business and product candidates;


	•		the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates;


	•		estimates of our future expenses, capital requirements, and our need for additional financing;


	•		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;


	•		future agreements with third parties in connection with the commercialization of product candidates (if approved) and any other approved products;


	•		the size and growth potential of the markets for our product candidates, and our ability to serve those markets;


	•		our financial performance, including the expectation that we will continue to incur operating losses and negative cash flow;


	•		the rate and degree of market acceptance of our product candidates;


	•		regulatory developments in the United States and foreign countries;


	•		our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;


	•		our ability to produce our products or product candidates with advantages in turnaround times or manufacturing cost;


	•		the success of competing therapies that are or may become available;


	•		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 the on-going COVID-19 pandemic, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations, including but not limited to our preclinical studies and clinical trials and any future studies or trials; and


	•		other risks and uncertainties, including those listed in this Quarterly Report on Form 10-Q under the section titled “Risk Factors.”

The forward-looking statements contained in 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 II, Item 1A of this Quarterly Report on Form 10-Q. 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. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak and there may be additional risks that we 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.

Corporate Information and Corporate Website

We were formerly known as BCTG Acquisition Corp. (“BCTG”) and were incorporated in Delaware 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. 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 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.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

TANGO THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)


	June 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	104,582		$	142,745
Marketable securities		311,774			342,510
Accounts receivable		2,000			2,000
Restricted cash		567			567
Prepaid expenses and other current assets		17,162			4,516
Total current assets		436,085			492,338
Property and equipment, net		8,359			4,832
Operating lease right-of-use assets		520			1,254
Restricted cash, net of current portion		3,423			1,712
Other assets		12			19
Total assets	$	448,399		$	500,155
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,693		$	3,226
Accrued expenses and other current liabilities		14,161			9,887
Operating lease liabilities		629			1,503
Deferred revenue		28,200			26,022
Income tax payable		1			52
Total current liabilities		44,684			40,690
Operating lease liabilities, net of current portion		—			—
Deferred revenue, net of current portion		105,011			114,718
Other long-term liabilities		—			—
Total liabilities		149,695			155,408
Commitments and contingencies (Note 8)
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		—			—
Stockholders' equity:
Common stock, $0.001 par value; 200,000,000 shares authorized at June 30, 2022 and December 31, 2021; 87,997,949 and 87,598,184 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		88			88
Additional paid-in capital		514,365			506,760
Accumulated other comprehensive loss		(4,347	)		(765	)
Accumulated deficit		(211,402	)		(161,336	)
Total stockholders’ equity		298,704			344,747
Total liabilities and stockholders’ equity	$	448,399		$	500,155

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 data)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Collaboration revenue	$	5,771		$	7,153		$	11,529		$	13,539
License revenue		-			11,000			-			11,000
Total revenue	$	5,771		$	18,153		$	11,529		$	24,539
Operating expenses:
Research and development		23,741			19,079			48,071			34,079
General and administrative		7,232			3,630			14,039			7,097
Total operating expenses		30,973			22,709			62,110			41,176
Loss from operations		(25,202	)		(4,556	)		(50,581	)		(16,637	)
Other income (expense):
Interest income		297			104			515			208
Other income (expense), net		50			(62	)		3			(117	)
Total other income, net		347			42			518			91
Loss before income taxes		(24,855	)		(4,514	)		(50,063	)		(16,546	)
(Provision for) benefit from income taxes		(3	)		21			(3	)		(53	)
Net loss	$	(24,858	)	$	(4,493	)	$	(50,066	)	$	(16,599	)

Net loss per common share – basic and diluted	$	(0.28	)	$	(0.09	)	$	(0.57	)	$	(0.37	)
Weighted average number of common shares outstanding – basic and diluted		87,839,804			48,524,511			87,775,440			45,088,434

Net loss		(24,858	)		(4,493	)		(50,066	)		(16,599	)
Other comprehensive loss:
Unrealized loss on marketable securities		(937	)		(30	)		(3,582	)		(15	)
Comprehensive loss	$	(25,795	)	$	(4,523	)	$	(53,648	)	$	(16,614	)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

TANGO THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED

STOCK AND STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(Unaudited)


					Additional			Accumulated Other						Total
	Common Stock				Paid-in			Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital			Loss			Deficit			Equity
Balance at December 31, 2021		87,598,184	$	88	$	506,760		$	(765	)	$	(161,336	)	$	344,747
Exercise of stock options		111,315		—		265			—			—			265
Stock based compensation expense		—		—		3,205			—			—			3,205
Business combination and PIPE financing, issuance costs		—		—		(8	)		—			—			(8	)
Other comprehensive loss		—		—		—			(2,645	)		—			(2,645	)
Net loss		—		—		—			—			(25,208	)		(25,208	)
Balance at March 31, 2022		87,709,499	$	88	$	510,222		$	(3,410	)	$	(186,544	)	$	320,356
Issuance of common stock from exercise of options and employee stock purchase plan		288,450		—		718			—			—			718
Stock based compensation expense		—		—		3,425			—			—			3,425
Other comprehensive loss		—		—		—			(937	)		—			(937	)
Net loss		—		—		—			—			(24,858	)		(24,858	)
Balance at June 30, 2022		87,997,949	$	88	$	514,365		$	(4,347	)	$	(211,402	)	$	298,704


											Additional		Accumulated Other					Total
	Series B						Common Stock				Paid-in		Comprehensive		Accumulated			Stockholders’
	Shares			Amount			Shares		Amount		Capital		Income		Deficit			Equity
Balance at December 31, 2020		—		$	—			40,372,133	$	40	$	141,644	$	17	$	(103,101	)	$	38,600
Issuance of Series B redeemable convertible preferred stock, net of issuance costs of $0.1 million		22,686,025			29,990			—		—		—		—		—			—
Retroactive application of recapitalization		(22,686,025	)		(29,990	)		7,706,861		8		29,982		—		—			29,990
Exercise of stock options		—			—			304,080		1		439		—		—			440
Vesting of restricted common stock awards		—			—			—		—		2		—		—			2
Stock based compensation expense		—			—			—		—		950		—		—			950
Other comprehensive income		—			—			—		—		—		15		—			15
Net loss		—			—			—		—		—		—		(12,106	)		(12,106	)
Balance at March 31, 2021		—		$	—			48,383,074	$	49	$	173,017	$	32	$	(115,207	)	$	57,891
Exercise of stock options		—			—			210,748		—		324		—		—			324
Vesting of restricted common stock awards		—			—			—	<