trda-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 10-Q

____________________________


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

For the quarterly period ended March 31, 2024


o			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: 001-40969

____________________________

ENTRADA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

____________________________


Delaware			81-3983399
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

One Design Center Place
Suite 17-500
Boston, MA			02210
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s telephone number, including area code: (857) 520-9158

_________________

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 $0.0001 per share

TRDA

The 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 x No o

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 x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of April 30, 2024, the registrant had 33,758,976 shares of common stock, $0.0001 par value per share, outstanding.

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TABLE OF CONTENTS


		Page
Part I	Financial Information

Item 1.	Financial Statements (Unaudited)	8

	Condensed Consolidated Balance Sheets	8

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	9

	Condensed Consolidated Statements of Stockholders’ Equity	10

	Condensed Consolidated Statements of Cash Flows	11

	Notes to Condensed Consolidated Financial Statements	12

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33

Item 4.	Controls and Procedures	33

Part II	Other Information

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	95

Item 3.	Defaults Upon Senior Securities	95

Item 4.	Mine Safety Disclosures	95

Item 5.	Other Information	95

Item 6.	Exhibits	97

Signatures		98

We own various U.S. federal trademark applications and unregistered trademarks, including our company name and logo, that we use in connection with the operation of our business. This Quarterly Report on Form 10-Q ("Quarterly Report") may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this Quarterly Report is not intended to, and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this Quarterly Report may appear without the ®, TM or SM symbols, but the omission of such references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner of these trademarks, service marks and trade names will not assert, to the fullest extent under applicable law, its rights.

From time to time, we may use our website or our LinkedIn profile at www.linkedin.com/company/entradatx to distribute material information. Our financial and other material information is routinely posted to and accessible on the Investors Relations section of our website, available at www.entradatx.com. Investors are encouraged to review the Investors Relations section of our website because we may post material information on that site that is not otherwise disseminated by us. Information that is contained in and can be accessed through our website or our LinkedIn profile is not incorporated into, and does not form a part of, this Quarterly Report.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q ("Quarterly Report") contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are based on our management’s belief and assumptions and on information currently available to our management. These statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

•the initiation, timing, progress, results and costs of conducting our research and development programs, our current and future preclinical studies, and our current and future clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our current and future programs;

•the ability of our preclinical studies and clinical trials to demonstrate safety and efficacy of our therapeutic candidates, and other positive results;

•the beneficial characteristics, and the potential safety, efficacy and therapeutic effects of our therapeutic candidates;

•the timing, scope and likelihood of regulatory filings and approvals, including timing of any Investigational New Drug application ("IND") and final U.S. Food and Drug Administration ("FDA") or foreign equivalent approval of our current therapeutic candidates or any future therapeutic candidates;

•the timing or content of any update regarding our regulatory filings;

•the ability to leverage our proprietary EEV platform ("EEV Platform") to efficiently develop additional therapeutic candidates, including by applying learnings from one program to other programs and from one indication to our other indications;

•our estimates of the number of patients that we will enroll and our ability to initiate, recruit and enroll patients in and conduct and successfully complete clinical trials at the pace that we project;

•the costs of manufacturing and our ability to scale-up our manufacturing and processing approaches to appropriately address our anticipated commercial needs, which will require significant resources;

•our ability to establish or maintain collaborations or strategic relationships and the ability and willingness of our third-party strategic collaborators to undertake research and development activities relating to our current or future therapeutic candidates and discovery programs;

•our expectations regarding the potential benefits of the partnership, licensing and/or collaboration arrangements and other strategic arrangements and transactions we have entered into or may enter into in the future;

•the potential benefits of our technologies and programs, including those with strategic partners;

•our ability to obtain funding for our operations necessary to complete further development and commercialization of our therapeutic candidates;

•our ability to take advantage of expedited regulatory pathways for our therapeutic candidates;

•our ability to obtain and maintain regulatory approval of our therapeutic candidates;

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

•the scope of protection we are able to establish and maintain for intellectual property rights covering our therapeutic candidates and other therapeutic candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property;

•rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

•the period over which we estimate our available financial resources, together with ongoing research support and the anticipated receipt of a milestone payment for the milestone achieved in the first quarter of 2024 under the Vertex Agreement will enable us to fund the Company’s current and future operating expenses and capital expenditure requirements;

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•our financial performance and estimates of our future expenses, revenues, capital requirements, use of our cash reserves, and our needs for additional financing;

•future agreements with third parties in connection with the development and commercialization of our therapeutic candidates and any other approved product;

•the rate and degree of market acceptance and the size and growth potential of the markets for our therapeutic candidates, and our ability to serve those markets;

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

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

•our competitive position and the success of competing therapies that are or may become available;

•our need for and ability to attract and retain key scientific, management and other personnel and to identify, hire and retain additional qualified professionals;

•our expectations regarding the period during which we will remain an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act");

•our anticipated use of our existing resources;

•the expected timing, progress and success of our collaboration with Vertex Pharmaceuticals Incorporated ("Vertex"), including any future payments we may receive under our collaboration and license agreements, as well as our ability to identify and enter into future license agreements and collaborations;

•our beliefs and expectations regarding milestone, royalty or other payments that could be due to third parties under existing agreements;

•the impact of global economic and political developments on our business, including rising inflation and capital market disruptions, the current conflicts in Ukraine and the Middle East, economic sanctions and economic slowdowns or recessions that may result from such developments which could harm our research and development efforts as well as the value of our common stock and our ability to access capital markets; and

•other risks and uncertainties, including those listed under the caption “Risk Factors.”

In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “seek,” “predict,” “future,” “project,” “potential,” “continue,” “target,” "contemplate," "possible," "can," or the negative of these terms or other comparable terminology, and similar expressions, although not all forward-looking statements contain these identifying words. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Quarterly Report. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed with the Securities and Exchange Commission (the "SEC") thereto completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

The forward-looking statements in this Quarterly Report represent our views as of the date of this Quarterly Report. We do not undertake any obligation to publicly update any forward-looking statement except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report.

This Quarterly Report also contains estimates, projections and other information concerning our industry, our business and the markets for our product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from our own internal estimates and research as well as from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. All of the market data used in this Quarterly Report involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunities for our product candidates include several key assumptions based on our

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industry knowledge, industry publications, third-party research, and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.

This Quarterly Report contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed as exhibits to this Quarterly Report. Unless the context otherwise requires, reference in this Quarterly Report to the terms “Entrada,” “Entrada Therapeutics,” “the Company,” “we,” “us,” “our,” and similar designations refer to Entrada Therapeutics, Inc. and, where appropriate, our wholly-owned subsidiary.

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SUMMARY OF MATERIAL AND OTHER RISKS ASSOCIATED WITH OUR BUSINESS

Our business is subject to numerous risks and uncertainties and are subject to change based on various factors, including those highlighted in the section entitled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q ("Quarterly Report"). These risks include, but are not limited to, the following:

•We have a limited operating history, have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future. We may never generate any revenue from product sales or become profitable or, if we achieve profitability, we may not be able to sustain it.

•We will require additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our development programs, commercialization efforts or other operations.

•We are early in our development efforts and as a result it will be years before we commercialize a therapeutic candidate, if ever. If we are unable to identify and advance therapeutic candidates through preclinical studies and/or clinical trials, obtain marketing approval and ultimately commercialize them, or experience significant delays in doing so, our business will be materially harmed.

•The U.S. Food and Drug Administration ("FDA") has placed the Investigational New Drug application ("IND") for ENTR-601-44 for the potential treatment of Duchenne muscular dystrophy on clinical hold. Should our response to the clinical hold in the United States not be satisfactory to the FDA, the clinical hold may not be lifted on a timely basis, or at all.

•Our business is highly dependent on the clinical advancement of our programs and modalities and is especially dependent on the success of our lead Endosomal Escape Vehicle ("EEV") therapeutic candidates, ENTR-601-44, ENTR-601-45, ENTR-601-50 and our partnered candidate VX-670. Delay or failure to advance programs or modalities, including ENTR-601-44, ENTR-601-45, ENTR-601-50 and VX-670 could adversely impact our business.

•Our EEV therapeutic candidates are based on a novel therapeutic approach, which makes it difficult to predict the time and cost of development and of subsequently obtaining regulatory approval, if at all.

•Preclinical and clinical development involves a lengthy and expensive process with an uncertain outcome, and the results of preclinical studies are not necessarily predictive of the results of later preclinical studies and any clinical trials of our therapeutic candidates. We have not completed the testing of any of our therapeutic candidates in clinical trials and our therapeutic candidates may not have favorable results in clinical trials, if any, or receive regulatory approval on a timely basis, if at all.

•Substantial delays in the commencement of our planned clinical trials or the enrollment or completion of our current or planned clinical trials, or failure to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities could prevent us from commercializing any therapeutic candidates we determine to develop on a timely basis, if at all.

•Our approach to the discovery and development of therapeutic candidates based on our EEV platform ("EEV Platform") is unproven, and we do not know whether we will be able to develop any products of commercial value, or if competing technological approaches will limit the commercial value of our therapeutic candidates or render our EEV Platform obsolete.

•We rely, and expect to continue to rely, on third parties to conduct some or all aspects of our product manufacturing, research and preclinical and clinical testing, and these third parties may not perform satisfactorily or, dedicate adequate resources to meet our needs, or may be unable to acquire the necessary supplies to perform successfully.

•We have and may in the future enter into collaborations, licenses and other similar arrangements with third parties for the research, development and commercialization of certain of the therapeutic candidates we may develop, including our collaboration with Vertex Pharmaceuticals Incorporated ("Vertex"). If any such arrangements are not successful, we may not be able to capitalize on the market potential of those therapeutic candidates.

•We face significant competition, and if our competitors develop technologies or therapeutic candidates more rapidly than we do or their technologies are more effective, our business and our ability to develop and successfully commercialize products may be adversely affected.

•We expect to expand our development and regulatory capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

•While we will attempt to diversify our risks by developing one or more programs in each modality, there are risks that are unique to each modality and risks that are applicable across modalities. These risks may impair our ability

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to advance one or more of our programs in clinical development, obtain regulatory approval, or ultimately commercialize our programs, or cause us to experience significant delays in doing so, any of which may materially harm our business.

•If we or our collaborators are unable to obtain and maintain patent protection for our EEV Platform, therapeutic development programs and other proprietary technologies we develop, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our therapeutic programs and other proprietary technologies we may develop may be adversely affected.

•Our future success depends on our ability to retain key employees and to attract, retain and motivate qualified personnel.

•The market price of our common stock may be volatile, and investors could lose all or part of their investment.

•Volatility in capital markets may affect our ability to access new capital, which may harm our liquidity, limit our ability to grow our business, pursue acquisitions or improve our operating infrastructure and restrict our ability to compete in our markets.

•Unstable market and economic conditions may have adverse consequences for our business, financial condition and stock price.

The material and other risks summarized above should be read together with the text of the full risk factors and in the other information set forth in this Quarterly Report, including our condensed consolidated financial statements and the related notes, as well as in other documents that we file with the Securities and Exchange Commission (the "SEC"). If any such material and other risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks summarized above or described in full are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations.

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PART I —FINANCIAL INFORMATION

Item 1. Financial Statements

ENTRADA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(unaudited)


	March 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	68,436	$	67,602
Marketable securities	258,978		284,367
Collaboration receivable	77,514		5,878
Prepaid expenses and other current assets	9,244		11,924
Total current assets	414,172		369,771
Property and equipment, net	11,002		11,191
Restricted cash	3,950		3,950
Right-of-use assets, operating leases	78,958		81,490
Other non-current assets	2,762		2,790
Total assets	$	510,844	$	469,192
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,527	$	3,277
Accrued expenses and other current liabilities	8,792		11,325
Income taxes payable	5,855		4,024
Operating lease obligations, current portion	8,301		7,909
Deferred revenue, current portion	148,463		132,261
Total current liabilities	173,938		158,796
Operating lease obligations, net of current portion	58,131		60,321
Deferred revenue, net of current portion	9,408		7,715
Total liabilities	241,477		226,832
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, par value $0.0001; 150,000,000 shares authorized; 33,625,117 shares issued and 33,604,053 shares outstanding as of March 31, 2024 and 33,461,771 shares issued and 33,437,296 shares outstanding as of December 31, 2023	3		3
Additional paid‑in capital	441,084		437,132
Accumulated other comprehensive (loss) income	(246)		195
Accumulated deficit	(171,474)		(194,970)
Total stockholders’ equity	269,367		242,360
Total liabilities and stockholders’ equity	$	510,844	$	469,192

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

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ENTRADA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except share and per share amounts)

(unaudited)


	Three Months Ended March 31,
	2024		2023
Collaboration revenue	$	59,120	$	25,260
Operating expenses:
Research and development	28,608		23,102
General and administrative	9,399		7,938
Total operating expenses	38,007		31,040
Income (loss) from operations	21,113		(5,780)
Other income:
Interest and other income	4,214		2,657
Total other income	4,214		2,657
Income (loss) before provision for income taxes	25,327		(3,123)
Provision for income taxes	(1,831)		(3,551)
Net income (loss)	$	23,496	$	(6,674)
Net income (loss) per share, basic	$	0.70	$	(0.21)
Net income (loss) per share, diluted	$	0.68	$	(0.21)
Weighted‑average common shares outstanding, basic	33,497,072		32,374,299
Weighted‑average common shares outstanding, diluted	34,790,925		32,374,299
Other comprehensive (loss) income:
Unrealized (loss) gain on marketable securities	(441)		1,415
Total other comprehensive (loss) income	(441)		1,415
Total comprehensive income (loss)	$	23,055	$	(5,259)

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

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ENTRADA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(unaudited)


	Common Stock			Additional Paid‑in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balances at December 31, 2022	31,394,767	$	3	$	402,893	$	(2,057)	$	(188,285)	$	212,554
Issuance of common stock upon exercise of stock options	18,344	—		129		—		—		129

SEC Form 10-Q filed by Entrada Therapeutics Inc.