Molecular Templates, Inc. (Nasdaq: MTEM, “Molecular” or
“Molecular Templates”), a clinical-stage oncology company focused
on the discovery and development of the company’s proprietary
engineered toxin bodies (ETBs), which are differentiated, targeted,
biologic therapeutics for cancer, today reported financial results
for the third quarter of 2018. As of September 30, 2018,
Molecular’s cash and cash equivalents totaled $78.7 million,
this does not include $30 million received from Takeda in October
2018. Molecular’s current cash balance is expected to fund
operations into 1H 2021.
“Our recently announced CD38 collaboration with
Takeda enables the development of TAK-169, the most potent ETB we
have created with our platform to date. Importantly, the upfront
payment from Takeda and the equity financing that we closed in
September provide the funding to allow us to generate clinical data
from multiple pipeline candidates throughout 2019 and beyond,” said
Eric Poma, Ph.D., Molecular Templates’ Chief Executive and
Scientific Officer. “In 2019, our lead program MT-3724 will be in
multiple Phase II studies and we expect to start clinical trials
for three additional ETBs targeting CD38, HER2, and PD-L1.”
Company Highlights and Upcoming
Milestones
Corporate
- On September 19, 2018, Molecular announced an agreement with
Takeda for the joint development of CD38-targeted ETBs for the
treatment of multiple myeloma. TAK-169, the lead development
candidate, is a CD38-targeted ETB that resulted from a previous
discovery collaboration between the two companies. Under the terms
of the agreement, Takeda made an upfront payment of $30 million and
Molecular is eligible to receive development, regulatory and
commercial milestone payments of up to $632.5 million if Molecular
exercises its co-development option or $337.5 million if Molecular
does not exercise or opts out of its co-development option. Takeda
has also agreed to pay royalties on the sales of the commercial
products developed through the collaboration. The royalty
percentages would range from low double-digits to low twenties if
Molecular exercises its option to co-develop, and from high-single
digits to low teens if Molecular does not exercise its option to
co-develop. Molecular and Takeda will share equally in the
development costs.
- On September 18, 2018, Molecular entered into a Cancer Research
Grant Contract with the Cancer Prevention and Research Institute of
Texas (CPRIT), in connection with a grant of approximately $15.2
million awarded by CPRIT to Molecular in November 2016 to fund
research of a cancer therapy involving a CD38 targeting ETB
(MT-4019). Molecular may also use such funds to develop a
replacement CD38 targeting ETB, with or without a partner and
expects to use this grant to fund development of TAK-169.
- On September 25, 2018, Molecular announced the closing of an
underwritten public offering of its common stock, which generated
gross proceeds of approximately $52 million.
TAK-169
- Following the announcement of the CD38 joint development
agreement in September, Takeda and Molecular are conducting IND
enabling studies for TAK-169, which is expected to enter the clinic
for the treatment of multiple myeloma in 2019.
MT-3724
- Molecular expects to begin enrollment in 4Q18 for a Phase II
combination study with MT-3724 and chemotherapy in earlier lines of
diffuse large B-cell lymphoma (DLBCL).
- In 1Q19 Molecular expects to start a Phase II monotherapy
study, which has the potential to be a pivotal study.
- Molecular expects to initiate a second Phase II combination
study with MT-3724 and Revlimid® (lenalidomide) in earlier lines of
DLBCL in 1Q19.
Research
- Molecular expects to file an IND application for an ETB
targeting HER2 in 1Q19.
- Molecular expects to file an IND application for an ETB
targeting PD-L1 (with antigen seeding) in 2H19.
- Several other ETB candidates are in pre-clinical development,
targeting both solid and hematological cancers.
Takeda Multi-Target Collaboration
- Takeda and Molecular are conducting lead optimization for ETBs
against two undisclosed targets selected by Takeda under the
collaboration. Should Takeda exercise its option to license ETBs
for both targets, Molecular would receive $25 million and would be
eligible to receive up to $547 million in milestone payments and
tiered royalties on sales.
Financial Results
The net loss attributable to common shareholders
for the third quarter of 2018 was $5.2 million, or ($0.19) per
basic and diluted share. This compares with a net loss attributable
to common shareholders of $11.1 million, or ($0.62) per basic
and diluted share, for the same period in 2017.
Revenues for the third quarter of 2018
were $6.8 million, compared to $0.6 million for the same
period in 2017. Revenues for the third quarter of 2018 were
comprised of grant revenue from the Cancer Prevention
& Research Institute of Texas, and revenues from collaborative
research and development agreements. Total research and development
expenses for the third quarter of 2018 were $8.3 million,
compared with $2.5 million for the same period in 2017.
Total general and administrative expenses for the third quarter of
2018 were $3.5 million, compared with $4.0
million for the same period in 2017.
The net loss attributable to common shareholders
for the nine months ended September 30, 2018 was $23.7
million, or ($0.87) per basic and diluted share. This compares with
a net loss attributable to common shareholders of $17.2
million, or ($2.75) per basic and diluted share, for the same
period in 2017.
Revenues for the nine months ended September 30,
2018 were $8.6 million, compared to $2.6 million for the same
period in 2017. Revenues for the nine months ended September
30, 2018 were comprised of grant revenue from the Cancer
Prevention & Research Institute of Texas, and revenues from
collaborative research and development agreements. Total research
and development expenses for the nine months ended September 30,
2018 were $22.6 million, compared with $4.8
million for the same period in 2017. Total general and
administrative expenses for the nine months ended September 30,
2018 were $10.2 million, compared with $8.2
million for the same period in 2017.
About Molecular
TemplatesMolecular Templates is a clinical-stage
oncology company focused on the discovery and development of
differentiated, targeted, biologic therapeutics for cancer. We
believe our proprietary biologic drug platform technology, referred
to as engineered toxin bodies, or ETBs, provides a differentiated
mechanism of action that may address some of the limitations
associated with currently available cancer therapeutics. ETBs
utilize a genetically engineered form of Shiga-like Toxin A
subunit, or SLTA, a ribosome inactivating bacterial protein, that
can be targeted to specifically destroy cancer cells.
Additional information about Molecular Templates can be
obtained at http://www.mtem.com.
Forward-Looking Statements This
press release contains forward-looking statements for purposes of
the Private Securities Litigation Reform Act of 1995 (the
“Act”). Molecular Templates disclaims any intent or obligation
to update these forward-looking statements, and claims the
protection of the Act’s Safe Harbor for forward-looking statements.
All statements, other than statements of historical facts,
included in this press release regarding strategy, future
operations, future financial position, future revenue, projected
expenses, prospects, plans and objectives of management are
forward-looking statements. In addition, when or if used in this
press release, the words “may,” “could,” “should,” “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “plan,” “predict” and
similar expressions and their variants, as they relate
to Molecular Templates may identify forward-looking
statements. Examples of such statements include, but are not
limited to, statements relating to the development of the Company’s
lead program, MT-3724; the expected timing of submitting various
IND applications and initiating studies; and the Company’s belief
that its proprietary biologic drug platform technology, or ETBs,
provides for a differentiated mechanism of action that may address
some of the limitations associated with currently available cancer
therapeutics.
Forward-looking statements are not guarantees of
future performance and involve risks and uncertainties. Actual
events or results may differ materially from those discussed in the
forward-looking statements as a result of various factors
including, but not limited to, the uncertainties inherent in the
preclinical and clinical development process; whether the Company’s
cash resources will be sufficient to fund its continuing operations
for the periods and/or trials anticipated; the ability of the
Company to protect its intellectual property rights; and
legislative, regulatory, political and economic developments, as
well as those risks identified under the heading “Risk Factors” in
the Company’s filings with the SEC. Any forward-looking statements
contained in this press release speak only as of the date hereof,
and the Company specifically disclaims any obligation to update any
forward-looking statement, whether because of new information,
future events or otherwise.
Contact:Adam CutlerChief Financial
Officeradam.cutler@mtem.com862-204-4006
Molecular Templates, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except share and per
share data)(unaudited)
|
10-QThree Months
EndedSeptember 30, |
|
|
10-QNine Months
EndedSeptember 30, |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
Research
and development revenue |
$ |
2,031 |
|
|
$ |
648 |
|
|
$ |
3,206 |
|
|
$ |
2,408 |
|
Grant
revenue |
|
4,721 |
|
|
|
— |
|
|
|
5,395 |
|
|
|
167 |
|
Total
revenue |
|
6,752 |
|
|
|
648 |
|
|
|
8,601 |
|
|
|
2,575 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
8,290 |
|
|
|
2,522 |
|
|
|
22,640 |
|
|
|
4,829 |
|
General
and administrative |
|
3,538 |
|
|
|
3,996 |
|
|
|
10,165 |
|
|
|
8,233 |
|
Total
operating expenses |
|
11,828 |
|
|
|
6,518 |
|
|
|
32,805 |
|
|
|
13,062 |
|
Loss
from operations |
|
5,076 |
|
|
|
5,870 |
|
|
|
24,204 |
|
|
|
10,487 |
|
Interest
and other income, net |
|
107 |
|
|
|
1 |
|
|
|
307 |
|
|
|
2 |
|
Interest
expense |
|
(279 |
) |
|
|
(107 |
) |
|
|
(672 |
) |
|
|
(752 |
) |
Change
in fair value of warrant liabilities |
|
4 |
|
|
|
(272 |
) |
|
|
916 |
|
|
|
(269 |
) |
Loss on
conversion of notes |
|
— |
|
|
|
(4,719 |
) |
|
|
— |
|
|
|
(4,719 |
) |
Net
loss |
|
5,244 |
|
|
|
10,967 |
|
|
|
23,653 |
|
|
|
16,225 |
|
Deemed
dividends on preferred stock |
|
— |
|
|
|
(138 |
) |
|
|
— |
|
|
|
(958 |
) |
Net loss
attributable to common shareholders |
$ |
5,244 |
|
|
$ |
11,105 |
|
|
$ |
23,653 |
|
|
$ |
17,183 |
|
Net loss
per share attributable to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
$ |
0.19 |
|
|
$ |
0.62 |
|
|
$ |
0.87 |
|
|
$ |
2.75 |
|
Weighted
average number of shares used in net loss per share
calculations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
27,680,307 |
|
|
|
17,925,585 |
|
|
|
27,246,667 |
|
|
|
6,241,947 |
|
|
Molecular Templates, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS(in
thousands, except share and per share data)
|
September 30,2018
(unaudited) |
|
|
December 31,2017 |
ASSETS |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
78,744 |
|
|
$ |
58,910 |
Prepaid
expenses |
|
2,535 |
|
|
|
1,485 |
Accounts
receivable from related party |
|
31,163 |
|
|
|
— |
Other
current assets |
|
4,385 |
|
|
|
19 |
Total
current assets |
|
116,827 |
|
|
|
60,414 |
Property
and equipment, net |
|
7,165 |
|
|
|
1,952 |
In-process research and development |
|
26,623 |
|
|
|
26,623 |
Other
assets |
|
1,345 |
|
|
|
1,402 |
Total
assets |
$ |
151,960 |
|
|
$ |
90,391 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
$ |
1,630 |
|
|
$ |
2,517 |
Accrued
liabilities |
|
6,595 |
|
|
|
2,690 |
Current
portion of long-term debt |
|
— |
|
|
|
2,400 |
Deferred
revenue |
|
33,400 |
|
|
|
2,765 |
Other
current liabilities |
|
106 |
|
|
|
70 |
Total
current liabilities |
|
41,731 |
|
|
|
10,442 |
Warrant
liabilities |
|
38 |
|
|
|
954 |
Long-term debt, net |
|
3,155 |
|
|
|
1,078 |
Other
liabilities |
|
844 |
|
|
|
628 |
Total
liabilities |
|
45,768 |
|
|
|
13,102 |
Total
stockholders’ equity |
|
106,192 |
|
|
|
77,289 |
Total
liabilities and stockholders’ equity |
$ |
151,960 |
|
|
$ |
90,391 |
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