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News Release

Molecular Templates, Inc. Reports Second Quarter 2020 Financial Results

August 6, 2020 at 4:30 PM EDT

AUSTIN, Texas, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Molecular Templates, Inc. (Nasdaq: MTEM, “Molecular Templates,” “MTEM” or “the Company”), a clinical-stage biopharmaceutical company focused on the discovery and development of proprietary targeted biologic therapeutics, engineered toxin bodies (ETBs), today reported financial results for the second quarter of 2020.

“Since our last quarterly update, we presented preclinical data at AACR on four preclinical ETB programs, provided an update on the ongoing Phase I study for MT-5111, and strengthened our balance sheet through a new debt facility and our ATM,” said Eric Poma, Ph.D., Molecular Templates’ Chief Executive and Chief Scientific Officer. “In the second half of 2020, we expect to report interim clinical data from our three MT-3724 Phase 2 studies and additional data from the MT-5111 Phase 1 study, and also file the IND for MT-6402, our PD-L1-targeted ETB with antigen seeding.”

Company Highlights, Pipeline Status, and Upcoming Milestones

Corporate

  • On May 22, 2020, MTEM announced it had secured a debt financing facility for up to $45 million from K2 HealthVentures, a healthcare-focused specialty finance company. MTEM received a first tranche of $15 million upon closing. Two subsequent tranches totaling $30 million will become available upon the achievement of certain milestones.
  • In July 2020, MTEM raised $50 million in gross proceeds from its At-The-Market Facility (ATM).

MT-3724 (CD20 ETB)

  • MTEM is currently conducting three Phase 2 studies with MT-3724 in relapsed/refractory diffuse large B-cell lymphoma (DLBCL): a monotherapy study that has the potential to be pivotal, a combination study with chemotherapy, and a combination study with lenalidomide.
  • Interim results for the study of MT-3724 in combination with lenalidomide were presented at the 25th Congress of the European Hematology Association (EHA) virtual meeting in June 2020.  This data demonstrated preliminary evidence of tolerability and efficacy with lenalidomide at standard doses and MT-3724. Among 7 evaluable subjects, 2 had CRs and 3 had PRs. While there were no permanent discontinuations due to adverse events, grade 2 capillary leak syndrome occurred at 25 mcg/kg, leading to the opening of a new cohort at 20 mcg/kg. The study now has a new schedule of therapy with MT-3724 being dosed twice rather than three times weekly for the first two cycles, and then on a weekly schedule thereafter.
  • MTEM expects to report updates on all three MT-3724 DLBCL studies in 2H20.
  • MTEM also expects to initiate Phase 2 studies for MT-3724 in follicular lymphoma and mantle cell lymphoma in 2H20.   

TAK-169 (CD38 ETB)

  • Takeda and MTEM are conducting an ongoing Phase 1 study evaluating TAK-169 in relapsed/refractory multiple myeloma.

MT-5111 (HER2 ETB)

  • MTEM is conducting a Phase 1 study of MT-5111 in HER2-positive cancers.
  • In June 2020, MTEM provided an interim update from the first three dose cohorts of the dose escalation portion of the Phase 1 study. That update noted that 10 subjects, with a median of 5 prior lines of therapy and a median of 2 prior HER2-targeting regimens, have been treated with MT-5111 (metastatic cholangiocarcinoma n=5, metastatic breast cancer n=4, metastatic gastro-esophageal junction carcinoma n=1).  Thus far, no dose limiting toxicities (DLTs) have been observed in any cohort and MT-5111 appears to be well tolerated, with no cardiotoxicity observed to date (cardiotoxicity is a known potential toxicity for HER2 targeted therapies).
  • Further to the June 2020 interim update, MTEM expects to provide an update on results from the subjects still on treatment as well as higher dose cohorts from the dose escalation portion of the Phase 1 study (including doses that are predicted to be clinically active based on preclinical data) in 4Q20.

Research

  • MTEM presented preclinical data on ETB programs targeting PD-L1, CTLA-4, SLAMF-7 and CD45 at the American Association for Cancer Research (AACR) Virtual Annual Meeting II, which took place June 22-24, 2020.
  • MTEM expects to file an investigational new drug (IND) application for MT-6402, its ETB targeting PD-L1 (with antigen seeding), in 2H20.
  • MTEM expects to file an IND application for its ETB targeting CTLA-4 in 2021.

COVID-19 Impact

  • The COVID-19 pandemic has resulted in a significant slowdown in the pace of site initiations and patient enrollment across our MT-3724 Phase 2 programs. Much like other sponsors with studies in patients with hematologic malignancies, we are working with sites to determine when a patient is suitable for each research study and to ensure the continued safety of all research participants.  
  • To date, screening and enrollment for the MT-5111 Phase 1 study has been less adversely affected than the MT-3724 studies but it is enrolling at slower pace than was projected pre-COVID-19.
  • To date, MTEM has been able to continue to work at its cGMP manufacturing facility and laboratories without interruption from COVID-19. As a result, manufacturing of product supply for clinical trials and research activities to support advancement of our preclinical pipeline (including partnered programs) have not been adversely affected by COVID-19 to date.

Financial Results

The net loss attributable to common shareholders for the second quarter of 2020 was $31.2 million, or $0.68 per basic and diluted share. This compares with a net loss attributable to common shareholders of $9.2 million, or $0.25 per basic and diluted share, for the same period in 2019.

Revenues for the second quarter of 2020 were $6.9 million, compared to $5.4 million for the same period in 2019. Revenues for the second quarter of 2020 were comprised of revenues from collaborative research and development agreements with Takeda and Vertex, as well as grant revenue from CPRIT. Total research and development expenses for the second quarter of 2020 were $30.4 million, compared with $10.2 million for the same period in 2019. Total general and administrative expenses for the second quarter of 2020 were $6.4 million, compared with $4.6 million for the same period in 2019.

As of June 30, 2020, MTEM’s cash and investments totaled $91.0 million. With the addition of $50 million in gross proceeds raised through MTEM’s ATM facility after the end of the quarter, MTEM expects to be able to fund operations into 2H22.

About Molecular Templates

Molecular Templates is a clinical-stage company focused on the discovery and development of targeted biologic therapeutics. Our proprietary drug platform technology, known as engineered toxin bodies, or ETBs, leverages the resident biology of a genetically engineered form of Shiga-like Toxin A subunit to create novel therapies with potent and differentiated mechanisms of action for cancer and other serious diseases.

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 MT-3724, MT-5111, TAK-169, and MT-6402; the expected timing of submitting various IND applications and conducting studies; the expected participation and presentation at upcoming medical conferences; the anticipated effects of the COVID-19 pandemic on the Company’s ongoing clinical studies, manufacturing and preclinical development; 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; risks from global pandemics including COVID-19; 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 Cutler
Chief Financial Officer
adam.cutler@mtem.com
862-204-4006



Molecular Templates, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)

  Three Months Ended
June 30,
  Six Months Ended
June 30,
 
  2020     2019   2020     2019  
Research and development revenue, related party $ 3,063     $ 5,211   $ 3,396     $ 11,624  
Research and development revenue, other   2,977           4,444        
Grant revenue   869       236     3,210       831  
Total revenue   6,909       5,447     11,050       12,455  
Operating expenses:                            
Research and development   30,414       10,243     51,045       18,697  
General and administrative   6,412       4,605     12,059       9,540  
Total operating expenses   36,826       14,848     63,104       28,237  
Loss from operations   29,917       9,401     52,054       15,782  
Interest and other income, net   286       543     758       1,053  
Interest and other expense, net   (360 )     (301 )   (708 )     (594 )
Loss on extinguishment of debt   (1,237 )         (1,237 )      
Change in fair value of warrant liabilities         6           2  
Loss before provision for income taxes   31,228       9,153     53,241       15,321  
Provision for income taxes             5        
Net loss   31,228       9,153     53,246       15,321  
Net loss attributable to common shareholders $ 31,228     $ 9,153   $ 53,246     $ 15,321  
Net loss per share attributable to common shareholders:                            
Basic and diluted $ 0.68     $ 0.25   $ 1.17     $ 0.42  
Weighted average number of shares used in net loss per share calculations:   45,725,481       36,819,846     45,687,278       36,779,638  
Basic and diluted                            


Molecular Templates, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

  June 30,
2020 (unaudited)
    December 31,
2019
 
ASSETS              
Current assets:              
Cash and cash equivalents $ 27,645     $ 85,451  
Marketable securities, current   63,361       39,633  
Prepaid expenses   3,347       2,318  
Grants revenue receivable   5,900       7,100  
Accounts receivable, related party   3,167       408  
In-process research and development - held for sale   4,500       4,500  
Other current assets   160       489  
Total current assets   108,080       139,899  
Marketable securities, non-current         1,510  
Operating lease right-of-use assets, non-current   9,266       9,959  
Property and equipment, net   20,224       18,158  
Other assets   4,840       4,676  
Total assets $ 142,410     $ 174,202  
LIABILITIES AND STOCKHOLDERS’ EQUITY              
Current liabilities:              
Accounts payable $ 1,660     $ 1,465  
Accrued liabilities   14,129       14,544  
Deferred revenue, current   13,284       8,511  
Deferred revenue, current, related party   5,218       8,780  
Other current liabilities, related party   5,325        
Other current liabilities   1,785       2,501  
Total current liabilities   41,401       35,801  
Deferred revenue, long-term   9,728       18,944  
Deferred revenue, long-term, related party   1,849       441  
Long-term debt, net   14,721       2,940  
Operating lease liabilities, non-current   10,771       11,682  
Other liabilities, related party   6,654        
Other liabilities   1,427       1,366  
Total liabilities   86,551       71,174  
Commitments and contingencies (Note 10)              
Stockholders’ equity              
Preferred stock, $0.001 par value:              
Authorized: 2,000,000 shares at June 30, 2020 and December 31, 2019; issued and
  outstanding: 250 shares at June 30, 2020 and December 31, 2019
         
Common stock, $0.001 par value:              
Authorized: 150,000,000 shares; issued and outstanding: 45,778,876 shares at
  June 30, 2020 and 45,589,157 shares at December 31, 2019
  46       46  
Additional paid-in capital   273,012       267,089  
Accumulated other comprehensive income   172       18  
Accumulated deficit   (217,371 )     (164,125 )
Total stockholders’ equity   55,859       103,028  
Total liabilities and stockholders’ equity $ 142,410     $ 174,202  

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Source: Molecular Templates, Inc.