Stoke Therapeutics (NASDAQ: NASDAQ: STOK ) develops RNA-based treatments for severe neurological and ophthalmic disorders. Although the stock is volatile, its unique strategy for restoring protein expression in haploinsufficient diseases makes it a possible long-term winner. Its lead candidate, zorevunersen, is nearingI have a strong inclination towards high-growth companies, often treading in sectors poised for exponential expansion. My expertise lies in understanding and investing in disruptive technologi ...

Company Overview - Stoke Therapeutics, Inc. (STOK) shares increased by 9.4% to close at $12.60, supported by higher trading volume compared to normal sessions, and a 4.5% gain over the past four weeks indicates positive market sentiment [1][2] Regulatory Developments - The company achieved alignment with global regulatory agencies, including the FDA, European Medicines Agency, and Japan's Pharmaceuticals and Medical Devices Agency, regarding the phase III EMPEROR study design for zorevunersen, aimed at treating Dravet syndrome [2] Clinical Trial Details - The EMPEROR study will evaluate two loading doses of zorevunersen (70mg) followed by two maintenance doses of 45mg over 52 weeks in children and adolescents aged 2 to less than 18 years with Dravet syndrome, compared to a sham treatment [2] Financial Expectations - The company is projected to report a quarterly loss of $0.51 per share, reflecting a year-over-year increase of 15%, while revenues are expected to reach $3.88 million, marking a 38.4% increase from the previous year [3] Earnings Estimate Revisions - The consensus EPS estimate for the upcoming quarter has been revised 2.7% higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [4] Industry Context - Stoke Therapeutics operates within the Zacks Medical - Biomedical and Genetics industry, where another company, Anika Therapeutics (ANIK), also showed positive performance with a 3.2% increase in stock price [4]

Massachusett-based Stoke Therapeutics (STOK) is making rapid progress with the development of zorevunersen (STK-001), its investigational candidate for treating Dravet syndrome, a severe and progressive genetic epilepsy.Zorevunersen is a novel proprietary antisense oligonucleotide with the potential to become the first disease-modifying therapy to address the genetic cause of Dravet syndrome.The FDA granted a Breakthrough Therapy designation to zorevunersen for treating Dravet syndrome in December 2024.In t ...

Group 1 - The stock price of Stoke Therapeutics, Inc. (STOK) has recently experienced a bearish trend, losing 14.8% over the past week, but a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1] - The hammer chart pattern indicates a possible bottom formation, signaling that selling pressure may be exhausting, which could lead to a reversal in the stock's price trend [2] - There has been a positive trend in earnings estimate revisions for STOK, with a 3.3% increase in the consensus EPS estimate for the current year over the last 30 days, indicating bullish sentiment among analysts [3] Group 2 - STOK holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [3] - The Zacks Rank serves as a timing indicator, suggesting that the company's prospects are improving, further supporting the potential for a turnaround in STOK's stock price [3]

Core Viewpoint - Stoke Therapeutics, Inc. (STOK) has shown a significant price increase of 16.4% over the past four weeks, with a mean price target of $22.14 indicating a potential upside of 66.8% from the current price of $13.27 [1] Price Target Analysis - The average price target consists of seven estimates ranging from a low of $14 to a high of $35, with a standard deviation of $7.38, suggesting variability in analyst predictions [2] - The lowest estimate indicates a 5.5% increase, while the highest suggests a 163.8% upside, highlighting the range of potential outcomes [2] Analyst Consensus and Earnings Estimates - Analysts are increasingly optimistic about STOK's earnings prospects, as indicated by a positive trend in earnings estimate revisions, which historically correlates with stock price movements [4][9] - The Zacks Consensus Estimate for the current year has risen by 3.1% over the past month, with four estimates increasing and no negative revisions [10] Zacks Rank and Investment Potential - STOK holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting strong potential for upside [11]

Financial Performance - Total revenue for the three months ended September 30, 2024, was $4.894 million, an increase of 48% compared to $3.308 million for the same period in 2023[12]. - The net loss for the three months ended September 30, 2024, was $26.430 million, compared to a net loss of $24.542 million for the same period in 2023[12]. - The company reported a comprehensive loss of $26.249 million for the three months ended September 30, 2024, compared to a comprehensive loss of $24.310 million in the same period of 2023[12]. - For the nine months ended September 30, 2024, the net loss was $78.5 million, slightly higher than the $77.7 million loss for the same period in 2023, indicating a year-over-year increase of about 1.0%[52]. - The company incurred net losses of $26.4 million and $24.5 million for the three months ended September 30, 2024 and 2023, respectively, and $78.5 million and $77.7 million for the nine months ended September 30, 2024 and 2023, respectively[125]. Operating Expenses - Total operating expenses for the three months ended September 30, 2024, were $34.897 million, up 14% from $30.542 million in the prior year[12]. - Research and development expenses for the three months ended September 30, 2024, were $22.2 million, up 4.6% from $20.3 million in the same period of 2023[65]. - General and administrative expenses increased to $12.7 million for the three months ended September 30, 2024, compared to $10.3 million for the same period in 2023, representing a 23.3% increase[66]. - Research and development expenses for the nine months ended September 30, 2024, were $65.710 million, an increase from $60.453 million in the prior year[12]. - General and administrative expenses for the nine months ended September 30, 2024, were $36.0 million, compared to $30.7 million for the same period in 2023, reflecting a 17.1% increase[72]. Cash and Liquidity - Cash and cash equivalents decreased to $150.016 million as of September 30, 2024, from $191.442 million at the end of 2023[10]. - The company had cash, cash equivalents, and marketable securities totaling $269.2 million as of September 30, 2024, up from $201.4 million as of December 31, 2023[50]. - The company expects existing cash resources to fund operations at least until the end of 2025[74]. - The company had cash, cash equivalents, and restricted cash of $150,585,000 at the end of the reporting period, down from $192,011,000 at the beginning of the period[15]. - The company experienced a net cash used in operating activities of $63,658,000 for the nine months ended September 30, 2024, compared to $60,418,000 for the same period in 2023[15]. Stockholder Equity and Shares - The company had total stockholders' equity of $232.113 million as of September 30, 2024, up from $159.565 million at the end of 2023[10]. - The weighted-average common shares outstanding for the three months ended September 30, 2024, were 56,341,074, compared to 44,266,017 for the same period in 2023[12]. - The total number of common stock shares outstanding increased to 52,941,191 as of September 30, 2024, from 39,439,575 as of December 31, 2022[13]. - The company granted options to purchase 729,300 shares of common stock during the three months ended September 30, 2024[42]. - As of September 30, 2024, there was $35.1 million of unrecognized compensation cost related to unvested stock options[43]. Collaboration and Milestones - The Company is eligible to receive up to $907.5 million in potential milestone payments from the collaboration with Acadia Pharmaceuticals[39]. - The Company received an upfront payment of $60 million from Acadia Pharmaceuticals as part of the license and collaboration agreement[39]. - As of September 30, 2024, the Company had $39.9 million in upfront consideration associated with the Acadia agreement relating to unsatisfied or partially unsatisfied performance obligations[40]. - The company entered into a collaboration agreement with Acadia Pharmaceuticals, receiving an upfront payment of $60.0 million and is eligible for up to $907.5 million in potential milestone payments[56]. Regulatory and Clinical Development - The company is developing zorevunersen for Dravet syndrome, with ongoing studies and plans for a regulatory update on Phase 3 registrational plans in the second half of 2024[53]. - The company has submitted an investigational new drug application for its lead product candidate, zorevunersen, and began dosing patients in a Phase 1/2a study in August 2020[99]. - The FDA previously placed a partial clinical hold on certain doses of zorevunersen pending additional preclinical testing[102]. - The company has received regulatory authorization for its Clinical Trial Authorization application for STK-002 in April 2023, although patient enrollment and dosing have not yet commenced[99]. - The company is currently evaluating zorevunersen in human clinical trials, with ongoing assessments of safety and efficacy[102]. Risks and Challenges - The company is subject to risks typical of early-stage biotechnology firms, including competition and the need for significant capital for product development[18]. - The company faces significant risks in obtaining regulatory approvals, which may delay or prevent product commercialization[107]. - The company may face challenges in establishing sales for its product candidates due to ethical, social, and legal concerns surrounding genetic treatments[116]. - The company is exposed to product liability risks related to clinical trials, which could result in substantial liabilities and impact commercialization efforts[166]. - The company may face limitations on utilizing its net operating loss carryforwards due to ownership changes[127]. Intellectual Property - The company relies on intellectual property protection for its proprietary technologies and product candidates, including TANGO, zorevunersen, and STK-002, which are critical for commercial success[130]. - The patenting process is described as expensive and time-consuming, with potential challenges in securing and maintaining patent protection across relevant markets[130]. - The company holds multiple issued U.S. and foreign patents covering zorevunersen and STK-002, but there is uncertainty regarding the adequacy of these protections against competitors[133]. - The company may need to redesign technology or obtain additional licenses to advance research or commercialization, which could be costly and time-consuming[130]. - The company may face disputes regarding the scope of rights under licensing agreements, which could impair its ability to commercialize product candidates[132]. Market and Economic Conditions - Global economic conditions, including potential recessions and banking instability, could adversely affect the company's financial condition and operational capabilities[159]. - The company anticipates pricing pressures due to increasing efforts by governmental and third-party payors to cap healthcare costs, which may limit coverage and reimbursement for new products[119]. - The market price of the company's stock may be volatile, influenced by various factors including clinical trial results and regulatory developments[167]. - The company is classified as an "emerging growth company" and a "smaller reporting company," with total annual gross revenue expected to remain below $1.235 billion until at least December 31, 2024[168]. - The company has never declared or paid cash dividends on its capital stock, with capital appreciation being the sole source of gain for investors in the foreseeable future[173].

Company Performance - Stoke Therapeutics reported a quarterly loss of $0.47 per share, better than the Zacks Consensus Estimate of a loss of $0.52, and an improvement from a loss of $0.55 per share a year ago, representing an earnings surprise of 9.62% [1] - The company posted revenues of $4.89 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 41.65%, compared to revenues of $3.31 million in the same quarter last year [2] - Over the last four quarters, Stoke Therapeutics has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - Stoke Therapeutics shares have increased approximately 149.1% since the beginning of the year, significantly outperforming the S&P 500's gain of 19.8% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.56 on revenues of $2.96 million, and for the current fiscal year, it is -$2.10 on revenues of $14.82 million [7] Industry Outlook - The Medical - Biomedical and Genetics industry, to which Stoke Therapeutics belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Financial Performance - Revenue recognized for the three months ended September 30, 2024, was $4.9 million, a 48.5% increase from $3.3 million in the same period in 2023[5] - Year-to-date revenue for the nine months ended September 30, 2024, was $13.9 million, compared to $6.0 million for the same period in 2023, representing a 131.7% increase[6] - Revenue for Q3 2024 was $4.894 million, up 48% from $3.308 million in Q3 2023[13] - Total other income for Q3 2024 was $3.573 million, up from $2.692 million in Q3 2023, a 33% increase[13] Net Loss - Net loss for the three months ended September 30, 2024, was $26.4 million, or $0.47 per share, compared to a net loss of $24.5 million, or $0.55 per share, for the same period in 2023[5] - Year-to-date net loss for the nine months ended September 30, 2024, was $78.5 million, or $1.48 per share, compared to a net loss of $77.7 million, or $1.78 per share, for the same period in 2023[6] - Net loss for Q3 2024 was $26.430 million, slightly higher than the $24.542 million loss in Q3 2023[13] - The company reported a net loss of $78.499 million for the nine months ended September 30, 2024, compared to $77.741 million for the same period in 2023[13] Expenses - Research and development expenses for the three months ended September 30, 2024, were $22.2 million, up from $20.3 million in the same period in 2023[5] - General and administrative expenses for the three months ended September 30, 2024, were $12.7 million, compared to $10.3 million for the same period in 2023[5] - Total operating expenses increased to $34.897 million in Q3 2024 from $30.542 million in Q3 2023, representing a 14% rise[13] - Research and development expenses rose to $22.205 million in Q3 2024, compared to $20.271 million in Q3 2023, a 9% increase[13] Share Information - Net loss per share improved to $(0.47) in Q3 2024 from $(0.55) in Q3 2023[13] - Weighted-average common shares outstanding increased to 56,341,074 in Q3 2024 from 44,266,017 in Q3 2023[13] Cash and Securities - As of September 30, 2024, the company had $269.2 million in cash, cash equivalents, and marketable securities[1] - The unrealized gain on marketable securities was $181,000 in Q3 2024, down from $232,000 in Q3 2023[13] Clinical Developments - The FDA has removed the Partial Clinical Hold on zorevunersen, allowing the company to proceed with its clinical studies[3] - The company plans to provide an update on Phase 3 registrational plans for zorevunersen by year-end 2024[4] - The company will present new data at the American Epilepsy Society meeting in December 2024, including data from patients treated with initial 70mg doses followed by 45mg maintenance dosing[2]

your_photo/iStock via Getty Images I covered Stoke Therapeutics (NASDAQ:STOK) thrice in the last few years. If you read those articles, you will see I have held divergent views about this company over the years. First, I held the view that STOK was overvalued when it had a market cap of $1.88bn - the stock is down 73% since then; then, 3 years later, I thought it was undervalued when it had a market cap of $364mn, and the stock is up 64% since then; but in my last article, after it produced unsatisfactory d ...

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, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |------------------------------------------------------------------------------------------------|-----------------------------------| | For the transition period from | __________ ...