Shares of Turnstone Biologics tumbled after the company said it substantially doubts its ability to continue as a going concern for the next 12 months, due to its expected operating losses and negative cash flows.
The stock fell 38% to $1.36 in after-hours trading on Wednesday. Shares ended the regular session down 3% at $2.18, putting them down 15% since the beginning of the year.
The La Jolla, Calif.-based biotechnology company’s ability to continue as a going concern is dependent on additional funding, which it intends to raise through equity offerings, debt financings and other capital sources, it said in a filing with the Securities and Exchange Commission.
“However, we may not be able to secure additional financing in a timely manner or on favorable terms, if at all,” it warned.
Turnstone in the second quarter posted a net loss of $21.3 million, or 92 cents a share, compared to a loss of $21.5 million, or $7.56 a share, in last year’s quarter. The company in its recent quarter had 23 million shares outstanding, compared to 2.8 million in the prior year.
The company ended the quarter with cash, cash equivalents and short-term investments of $62.4 million, which it expects will fund operations into next year’s third quarter.
Turnstone also reported positive initial data from a clinical trial testing a treatment for metastatic colorectal cancer.
