Tango Therapeutics, Inc. (TNGX) Bundle
Understanding Tango Therapeutics, Inc. (TNGX) Revenue Streams
Understanding Tango Therapeutics, Inc.’s Revenue Streams
The company primarily generates revenue from collaboration and licensing agreements. The key revenue sources are:
- Collaboration Revenue: $25.9 million for the nine months ended September 30, 2024, compared to $26.1 million for the same period in 2023.
- License Revenue: $12.1 million for the nine months ended September 30, 2024, compared to $5.0 million for the same period in 2023.
Year-over-Year Revenue Growth Rate
The company experienced a total revenue increase from:
- 2023 Total Revenue: $31.1 million
- 2024 Total Revenue: $38.0 million
- Percentage Increase: 22.06%
Contribution of Different Business Segments to Overall Revenue
| Revenue Source | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) | Change (in thousands) |
|---|---|---|---|
| Collaboration Revenue | $25,852 | $26,096 | $(244) |
| License Revenue | $12,100 | $5,000 | $7,100 |
| Total Revenue | $37,952 | $31,096 | $6,856 |
Analysis of Significant Changes in Revenue Streams
Notable changes include:
- The license revenue increased significantly due to a new licensing agreement with Gilead for $12 million in the second quarter of 2024.
- The collaboration revenue decreased slightly due to lower recognized research costs associated with the Gilead collaboration.
Overall, the company is positioned to grow its revenue streams as it continues to engage in licensing and collaboration agreements while developing its product candidates.
A Deep Dive into Tango Therapeutics, Inc. (TNGX) Profitability
A Deep Dive into Tango Therapeutics, Inc. Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the total revenue was $37.95 million, and total operating expenses were $142.64 million. The gross profit margin can be calculated as follows:
| Metric | Value |
|---|---|
| Total Revenue | $37.95 million |
| Total Operating Expenses | $142.64 million |
| Gross Profit | - $104.69 million |
| Gross Profit Margin | -276.4% |
Operating Profit Margin: The loss from operations for the nine months ended September 30, 2024, was $104.69 million, leading to an operating profit margin of:
| Metric | Value |
|---|---|
| Loss from Operations | $104.69 million |
| Operating Profit Margin | -276.4% |
Net Profit Margin: The net loss for the same period was $92.63 million, resulting in a net profit margin of:
| Metric | Value |
|---|---|
| Net Loss | $92.63 million |
| Net Profit Margin | -243.4% |
Trends in Profitability Over Time
Comparing the nine months ended September 30, 2024, to the same period in 2023, the following trends can be observed:
| Year | Total Revenue | Net Loss | Operating Profit Margin | Net Profit Margin |
|---|---|---|---|---|
| 2024 | $37.95 million | $92.63 million | -276.4% | -243.4% |
| 2023 | $31.10 million | $70.98 million | -254.4% | -228.5% |
Comparison of Profitability Ratios with Industry Averages
The average net profit margin for the biotechnology industry is typically around -20% to -30%. The company's net profit margin of -243.4% significantly underperforms the industry average, indicating challenges in managing costs relative to revenue generation.
Analysis of Operational Efficiency
In terms of operational efficiency, the following metrics are notable:
- Research and Development Expenses for the nine months ended September 30, 2024: $110.0 million
- General and Administrative Expenses for the same period: $32.66 million
- Total Operating Expenses for the nine months ended September 30, 2024: $142.64 million
- Interest Income for the nine months ended September 30, 2024: $6.08 million
The increase in operating expenses year-over-year highlights a need for improved cost management strategies:
| Expense Type | 2024 | 2023 |
|---|---|---|
| Research and Development | $110.0 million | $83.9 million |
| General and Administrative | $32.66 million | $26.4 million |
| Total Operating Expenses | $142.64 million | $110.26 million |
Debt vs. Equity: How Tango Therapeutics, Inc. (TNGX) Finances Its Growth
Debt vs. Equity: How Tango Therapeutics, Inc. Finances Its Growth
The financial structure of Tango Therapeutics, Inc. is an essential aspect of its operations and growth strategy. As of September 30, 2024, the company maintains a balance between debt and equity financing, reflecting its strategic approach toward funding its initiatives.
Overview of the Company's Debt Levels
As of September 30, 2024, Tango Therapeutics reported total liabilities of $123.2 million, which includes both current and long-term obligations. The breakdown of current liabilities is as follows:
| Type of Liability | Amount (in thousands) |
|---|---|
| Accounts Payable | $4,112 |
| Accrued Expenses | $15,006 |
| Operating Lease Liabilities | $2,863 |
| Deferred Revenue | $15,602 |
| Total Current Liabilities | $37,583 |
The company does not report significant long-term debt, which positions it favorably in terms of financial flexibility.
Debt-to-Equity Ratio and Comparison to Industry Standards
Tango Therapeutics' debt-to-equity ratio as of September 30, 2024, can be calculated as follows:
| Metric | Amount |
|---|---|
| Total Liabilities | $123,245,000 |
| Stockholders' Equity | $229,170,000 |
| Debt-to-Equity Ratio | 0.54 |
This ratio is below the industry average of approximately 0.75 for biotechnology firms, indicating a conservative approach to leverage.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
As of the latest financial disclosures, Tango Therapeutics has not engaged in any recent debt issuances or refinancing activities. The company has primarily financed its operations through equity offerings and collaborations, notably with Gilead Sciences.
How the Company Balances Between Debt Financing and Equity Funding
Tango Therapeutics has adopted a strategy focused on equity financing, complemented by collaboration agreements. Since inception, the company has raised an aggregate of $166.9 million through equity financing and $237.1 million from its collaboration with Gilead. This approach minimizes debt-related obligations while maximizing available capital for research and development.
The funding sources as of September 30, 2024, are summarized below:
| Funding Source | Amount (in millions) |
|---|---|
| Preferred Shares | $166.9 |
| Business Combination and Financing Transactions | $342.1 |
| Private Placement (August 2023) | $80.0 |
| At-the-Market Offerings | $43.0 |
| Collaboration with Gilead | $237.1 |
This diversified funding strategy allows Tango Therapeutics to maintain a robust financial position while pursuing its growth objectives without the immediate pressure of debt repayment.
Assessing Tango Therapeutics, Inc. (TNGX) Liquidity
Assessing Tango Therapeutics, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current assets totaled $293.3 million, while current liabilities were $37.6 million, resulting in a current ratio of approximately 7.80.
Quick Ratio: The quick assets (cash and cash equivalents, marketable securities) were $293.3 million, with the same current liabilities of $37.6 million, yielding a quick ratio of 7.80.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, stood at $255.7 million as of September 30, 2024. This reflects an increase from $247.9 million at the end of 2023, indicating improving liquidity over the period.
Cash Flow Statements Overview
The cash flows for the nine months ended September 30, 2024, were as follows:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Net cash used in operating activities | $(94,854) | $(90,515) | $(4,339) |
| Net cash provided by investing activities | $34,066 | $7,574 | $26,492 |
| Net cash provided by financing activities | $46,695 | $80,939 | $(34,244) |
| Net decrease in cash and cash equivalents | $(14,093) | $(2,002) | $(12,091) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents along with marketable securities amounted to $293.3 million. This is anticipated to cover operational expenses and capital expenditures through the third quarter of 2026, showing strong liquidity support for ongoing activities.
However, the net cash used in operating activities has increased, highlighting a potential concern regarding the sustainability of cash flow from operations in the near future. The substantial net losses of $92.6 million for the nine months ended September 30, 2024, as compared to $71.0 million in the same period of 2023, further emphasize the need for careful monitoring of cash flow management.
Contractual Obligations
The following table summarizes the contractual obligations as of September 30, 2024:
| Contractual Obligation Type | Total (in thousands) | Less than 1 Year (in thousands) | 1 – 3 Years (in thousands) | 3 – 5 Years (in thousands) | More than 5 Years (in thousands) |
|---|---|---|---|---|---|
| Operating lease commitments | $51,973 | $5,732 | $11,640 | $12,349 | $22,252 |
Is Tango Therapeutics, Inc. (TNGX) Overvalued or Undervalued?
Valuation Analysis
As of November 1, 2024, the stock price of Tango Therapeutics, Inc. (TNGX) is $10.25. Over the past 12 months, the stock has experienced a high of $15.00 and a low of $8.00. The stock price trend indicates a -15% change from the previous year.
Price-to-Earnings (P/E) Ratio
The P/E ratio is currently N/A due to negative earnings. The net loss for the nine months ended September 30, 2024, was $92.632 million, resulting in a loss per share of $0.85. This is a slight increase from a loss of $0.78 per share for the same period in 2023.
Price-to-Book (P/B) Ratio
The book value per share is calculated as total stockholders' equity of $229.170 million divided by the number of shares outstanding (107.415 million), yielding a P/B ratio of approximately 1.07.
Enterprise Value-to-EBITDA (EV/EBITDA)
As of September 30, 2024, the EBITDA is estimated at negative due to the operational loss, making the EV/EBITDA ratio also N/A. The enterprise value is calculated using the formula: market capitalization plus total debt minus cash. With cash and cash equivalents at $53.148 million, total liabilities at $123.245 million, and market cap calculated from current stock price, the enterprise value remains complex due to negative EBITDA.
Dividend Yield and Payout Ratios
Currently, the company does not pay any dividends, resulting in a dividend yield of 0%.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a Hold rating on TNGX, with price targets ranging from $9.00 to $12.00. The average target price suggests limited upside potential based on current valuation metrics.
| Metric | Value |
|---|---|
| Current Stock Price | $10.25 |
| 12-Month High | $15.00 |
| 12-Month Low | $8.00 |
| P/E Ratio | N/A |
| P/B Ratio | 1.07 |
| EV/EBITDA | N/A |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Tango Therapeutics, Inc. (TNGX)
Key Risks Facing Tango Therapeutics, Inc.
The financial health of Tango Therapeutics, Inc. is influenced by various internal and external risk factors that could impact its operations and strategic goals. Understanding these risks is crucial for investors considering the company's future prospects.
Industry Competition
The biotechnology sector is highly competitive, with numerous companies pursuing similar therapeutic targets. As of September 30, 2024, Tango Therapeutics reported a net loss of $92.6 million compared to $71.0 million for the same period in the previous year, indicating increasing operational pressures. The company is competing not only with established firms but also with emerging biotech companies that could impact its market share and pricing strategies.
Regulatory Changes
Regulatory risks are significant in the pharmaceutical industry. Tango has not yet commercialized any product and does not expect to generate revenue from product sales for several years. The company must navigate complex regulatory environments to gain approval for its therapies. The potential for regulatory changes, including new legislation or amendments to existing laws, could delay product development and increase costs. As of September 30, 2024, Tango's accumulated deficit stood at $463.9 million, reflecting the financial burden of compliance and development processes.
Market Conditions
Market volatility can significantly affect funding availability and investor sentiment. Tango Therapeutics has raised approximately $166.9 million from preferred shares and $342.1 million from business combinations and financing transactions since inception. However, unfavorable market conditions could hinder future fundraising efforts, which are crucial as the company anticipates continued net losses.
Operational Risks
Operational risks include challenges in advancing clinical trials and managing research and development costs. For the nine months ended September 30, 2024, Tango reported research and development expenses of $110.0 million, up from $83.9 million in the same period of 2023. This increase reflects the costs associated with advancing clinical and preclinical programs, which could escalate further if trials do not yield expected results.
Financial Risks
Financial risks encompass liquidity and capital resource management. As of September 30, 2024, Tango had cash and cash equivalents of $293.3 million, which is projected to fund operations until at least the third quarter of 2026. However, should expenses exceed projections or revenue generation be delayed, the need for additional funding could arise sooner than anticipated.
Strategic Risks
Strategic risks involve the company's ability to execute its growth strategy effectively. Tango has entered into collaboration agreements, including one with Gilead Sciences, which has provided $132.5 million in recognized collaboration revenue to date. However, failure to establish or maintain strategic partnerships could limit growth opportunities and revenue streams.
Mitigation Strategies
Tango has implemented several strategies to mitigate risks, including maintaining a robust pipeline of product candidates and fostering strategic partnerships to enhance its market position. The company is also focusing on cost management to ensure operational efficiency.
| Risk Factor | Description | Current Impact |
|---|---|---|
| Industry Competition | High competition in biotechnology sector affecting market share. | Net loss of $92.6 million in 2024. |
| Regulatory Changes | Complex regulatory environment impacting approval timelines. | Accumulated deficit of $463.9 million. |
| Market Conditions | Volatility affecting funding and investor sentiment. | Raised $166.9 million from preferred shares. |
| Operational Risks | Challenges in clinical trials and R&D management. | R&D expenses increased to $110.0 million. |
| Financial Risks | Liquidity management and funding requirements. | Cash and cash equivalents of $293.3 million. |
| Strategic Risks | Execution of growth strategy and maintaining partnerships. | Collaboration revenue of $132.5 million recognized. |
Future Growth Prospects for Tango Therapeutics, Inc. (TNGX)
Future Growth Prospects for Tango Therapeutics, Inc.
Analysis of Key Growth Drivers
The company is positioned to capitalize on several key growth drivers in the biotechnology sector:
- Product Innovations: The advancement of TNG462 and other preclinical programs is expected to drive growth. Research and development expenses increased to $109.9 million for the nine months ended September 30, 2024, compared to $83.9 million for the same period in 2023.
- Market Expansions: The licensing agreement with Gilead Sciences, which includes potential milestone payments, positions the company to expand its market presence. License revenue rose to $12.1 million in the nine months ended September 30, 2024, up from $5.0 million in the same period last year.
- Acquisitions: Future acquisitions may enhance the company's portfolio and drive growth, although no specific acquisitions have been reported recently.
Future Revenue Growth Projections and Earnings Estimates
The company anticipates continued revenue growth driven by collaborations and licensing agreements. Total revenue for the nine months ended September 30, 2024, was $37.9 million, compared to $31.1 million for the same period in 2023. With ongoing collaborations and new licensing deals, future revenue is projected to increase significantly, contingent upon successful clinical trials and regulatory approvals.
Strategic Initiatives or Partnerships
Strategic partnerships are critical for future growth. The collaboration with Gilead, which has generated $132.5 million in collaboration revenue to date, continues to be a cornerstone of the company's strategy. Additionally, the recent licensing agreement with Sesame Therapeutics could yield up to $25.9 million in potential future milestone payments.
Competitive Advantages
The company possesses several competitive advantages that position it for growth:
- Strong Pipeline: The focus on innovative therapies targeting specific cancer types enhances its market position.
- Robust Funding: As of September 30, 2024, the company had $293.3 million in cash, cash equivalents, and marketable securities, providing a strong financial foundation to support its growth initiatives.
- Experienced Management: The management team's expertise in drug development and commercialization is a significant asset for navigating the complexities of the biotech industry.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Collaboration Revenue | $11.6 million | $10.7 million | $0.9 million |
| License Revenue | $12.1 million | $5.0 million | $7.1 million |
| Total Revenue | $37.9 million | $31.1 million | $6.8 million |
| R&D Expenses | $109.9 million | $83.9 million | $26.0 million |
| Net Loss | $92.6 million | $71.0 million | $21.6 million |
Tango Therapeutics, Inc. (TNGX) DCF Excel Template
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Updated on 16 Nov 2024
Resources:
- Tango Therapeutics, Inc. (TNGX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Tango Therapeutics, Inc. (TNGX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Tango Therapeutics, Inc. (TNGX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.