Molecular Templates, Inc. Reports Fourth Quarter 2023 Financial Results and Business Update
- Positive clinical data for MT-6402 and MT-8421 showcasing durable single-agent activity and potent Treg clearance, respectively.
- Recent $9.5 million private placement to support ongoing clinical programs.
- Company anticipates a cash runway into Q2 2024 after the second closing of the July 2023 Private Placement.
- Termination of collaboration agreement with Bristol-Myers Squibb to reduce costs.
- Financial results for Q4 2023 show a net loss of $3.9 million, with revenues of $7.0 million and cash equivalents of $11.5 million as of December 31, 2023.
- None.
Insights
Analysis of Clinical Trial Progress: The reported outcomes for MT-6402 and MT-8421 are noteworthy in the oncology drug development space. MT-6402's ability to activate T-cells and potentially remodel the tumor microenvironment could represent a significant advancement in treating PD-L1+ head and neck cancer. The extended duration of monotherapy activity and the lack of severe drug-related toxicities are promising signs for its efficacy and safety profile. Similarly, MT-8421's Treg depletion mechanism is an innovative approach in immuno-oncology. These developments could attract interest from larger pharmaceutical companies seeking to enhance their oncology pipelines through acquisitions or partnerships.
Implications for Stakeholders: For investors, these clinical advancements suggest potential future value inflection points, such as successful phase trials or regulatory approvals. However, the termination of the collaboration with Bristol-Myers Squibb raises concerns about the company's ability to attract and maintain strategic partnerships, which are often important for clinical and commercial success in the biopharmaceutical industry.
Financial Health Assessment: The reported reduction in net loss from $22.0 million in Q4 2022 to $3.9 million in Q4 2023 reflects a significant improvement in the company's financial management. The increase in revenue, primarily from collaborative research and development agreements, is a positive indicator of the company's ability to monetize its R&D efforts. However, the cash runway into Q2 2024, extended to Q4 2024 after the recent private placement, suggests a limited financial buffer, highlighting the need for careful cash management or additional capital raising to support ongoing clinical programs.
Market Impact: The financial results, combined with the clinical data, could influence the company's stock performance. While the clinical progress may provide a positive outlook, the short-term cash runway and the need for further funding could weigh on investor sentiment. The stock issuance at a price equal to the closing price on March 27, 2024, indicates a neutral market sentiment at the time of the transaction, neither undervaluing nor overvaluing the company's prospects.
Competitive Landscape and Strategic Positioning: The discontinuation of the phase 1 study for MT-0169 due to slow patient enrollment underscores the competitive nature of the multiple myeloma market. It also reflects the challenges small biopharmaceutical companies face when competing with larger entities that have recently obtained approvals for new treatments. Conversely, the focus on novel therapies such as MT-6402 and MT-8421 may offer a strategic advantage by targeting unmet medical needs in oncology. These therapies' unique mechanisms could differentiate them from existing treatments and provide leverage in potential future licensing discussions or market positioning.
Long-term Outlook: The company's pivot towards solid tumors with high unmet medical needs and the strategic reduction of costs following the termination of the BMS collaboration agreement may be viewed as a realignment of resources towards more promising areas. This could be a prudent move to maximize the impact of its R&D investments and improve long-term sustainability.
AUSTIN, Texas, March 29, 2024 (GLOBE NEWSWIRE) -- Molecular Templates, Inc. (Nasdaq: MTEM, “Molecular Templates,” or “MTEM”), a clinical-stage biopharmaceutical company focused on the discovery and development of proprietary targeted biologic therapeutics, engineered toxin bodies (“ETBs”), to create novel therapies with potent differentiated mechanisms of action for cancer, today reported financial results for the fourth quarter and full year ended December 31, 2023.
Company Highlights
- Durable single agent activity observed with MT-6402, a PD-L1 targeting direct-cell kill agent, in heavily pre-treated patients with low PD-L1+ head and neck cancer who had progressed on multiple prior therapies including checkpoint and EGFR antibodies.
- Enrollment is on-going in the dose escalation study with MT-8421, a novel CTLA-4 targeting agent designed to potently deplete Tregs in the tumor environment. Unique pharmacodynamic effects demonstrating potent Treg clearance and IL-2 increases observed in patients.
- Recently completed
$9.5 million private placement supports continued funding of clinical stage programs.
Eric Poma, PhD., Chief Executive and Chief Scientific Officer of MTEM, stated, “We are very excited to see objective responses in heavily pre-treated, checkpoint-experienced head and neck cancer patients, a setting with high unmet medical need, with MT-6402. We are seeing evidence of monotherapy activity of long duration and in patients refractory to checkpoint therapy through a novel mechanism of tumor microenvironment remodeling. We believe these data demonstrate a new and potentially best-in-class approach to targeting the PD-1-PD-L1 axis.” Dr. Poma further added, “MT-8421 is currently in dose escalation as a novel direct cell-kill approach targeting CTLA-4 to potently deplete Tregs in the tumor microenvironment. Through the first dose cohort, we are already seeing promising and differentiate pharmacodynamic effects including dramatic Treg depletion in patients.”
MT-6402 (PD-L1 ETB)
- MT-6402 was designed to activate T-cells through direct cell-kill of immunosuppressive PD-L1+ immune cells resulting in a remodeling of the tumor microenvironment.
- In addition, MT-6402 can deliver and induce the presentation of an MHC class I CMV antigen on tumor cells for pre-existing CD8 T-cell recognition and destruction in HLA-A*02/CMV+ patients with high PD-L1 expression on their tumors.
- Compelling signal of monotherapy activity with MT-6402 at higher doses in relapsed or refractory head and neck cancer (R-R HNSCC) with dose expansion study planned in low PD-L1+ R-R HNSCC patients.
- 10 patients with R-R HNSCC in dose escalation
- Patients dosed at 63, 83 (MTD), or 100 mcg/kg; median # of prior treatments of greater than 3
- 2 patients currently in responses; 1 patient (63 mcg/kg) has a confirmed PR with
70% reduction in tumor volume at cycle 18 (1 cycle = 4 weeks) - 1 patient (83 mcg/kg) has an uPR(
37% reduction) at cycle 8 w/ reductions of3% ,9% , and15% across three previous cycles; the patient is on therapy in cycle 9 - 2 patients (one uPR and one
15% reduction) came off therapy for Gr1 hs-Trop elevation; guidelines now revised to allow patients to continue therapy despite advent of Gr1 hs-Trop elevation. In all instances, Gr1 hs-Trop elevations were asymptomatic and without evidence of cardiac changes. Similar troponin changes are observed in patients receiving checkpoint inhibitors. - No gr 4 or gr 5 drug-related toxicities were observed
- Patients with responses/tumor reduction had low PD-L1
- Dose expansion is on-going in patients with high PD-L1+ tumors.
MT-8421 (CTLA-4 ETB)
- MT-8421, along with MT-6402, represents our unique approach to immuno-oncology based on remodeling the tumor microenvironment through the elimination of immunosuppressive cells and activation of CD8 T-cells.
- MT-8421 is designed to potently destroy CTLA-4+ Tregs via enzymatic ribosome destruction but does not have activity against low CTLA-4 expressing peripheral Tregs.
- Two of the three patients enrolled in the first cohort remain on study in cycle 5. Both patients show evidence of Treg clearance and T-cell activation. Enrollment is on-going in the second cohort of 48 mcg/kg for the phase I study of MT-8421.
MT-0169 (CD38 ETB)
- MT-0169 is designed to destroy CD38+ tumor cells through internalization of CD38 and cell destruction via a novel mechanism of action (enzymatic ribosomal destruction and immunogenic cell death).
- A phase 1 study in patients with relapsed or refractory multiple myeloma was closed on Dec 2023 due to slow patient enrollment in the wake of multiple new approvals in myeloma. This study enrolled 14 patients and no drug-related Grade 4 or 5 adverse events have been observed. One patient with IgA myeloma who was quad-refractory was treated at 5 mcg/kg and had a stringent Complete Response for 16 cycles (1 cycle = 4 weeks) before discontinuing treatment for progression of disease.
- MTEM is evaluating plans to initiate an investigator sponsored study to evaluate MT-0169 in relapsed or refractory CD38+ AML patients.
Second Closing of July 2023 Private Placement
On March 28, 2024, the Company and certain institutional and accredited investors (the “March 2024 Purchasers”) entered into an Amended and Restated July 2023 Purchase Agreement pursuant to which the Company will issue common stock, prefunded warrants, and common warrants with an aggregate purchase price of
Key Milestones for 2024
- Clinical data on MT-6402 expansion cohorts in low and high PD-L1+ HNSCC patients
- Clinical data from dose escalation study for MT-8421 Treg depleting agent in solid tumors
Bristol-Myers Squibb Collaboration Agreement
On March 13, 2024, Bristol-Myers Squibb notified the Company that following a corporate portfolio prioritization process, it does not intend to continue the research collaboration it entered into with the Company pursuant to the BMS Collaboration Agreement and would be terminating the BMS Collaboration Agreement in its entirety. The termination will be effective on June 13, 2024, or 90 days following the Company’s receipt of Bristol-Myers Squibb’s written notice of termination. MTEM plans to reduce costs related to the Collaboration Agreement.
Conferences
MTEM will present an abstract, “First-in-human, dose escalation and expansion study of MT-6402, a novel engineered toxin body (ETB) targeting PD-L1, in patients with PD-L1 expressing relapsed/refractory advanced solid tumors: Interim Data”, Tuesday, April 9, 2024, 9am – 12:30pm ET (Section 48, Poster #19, Abstract #CT191), at the American Association for Cancer Research (“AACR”) Annual Meeting taking place in San Diego, CA.
Financial Results
The net loss attributable to common shareholders for the fourth quarter of 2023 was
Revenues for the fourth quarter of 2023 were
Total research and development expenses for the fourth quarter of 2023 were
As of December 31, 2023, MTEM’s unrestricted cash and cash equivalents totaled
For more details on MTEM’s financial results for 2023, refer to Form 10-K filed with the SEC.
| Molecular Templates, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (unaudited) | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Research and development revenue | $ | 6,639 | $ | 2,611 | $ | 52,625 | $ | 19,754 | |||||||
| Grant revenue | 377 | — | 4,681 | — | |||||||||||
| Total revenue | 7,016 | 2,611 | 57,306 | 19,754 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 8,796 | 17,590 | 48,875 | 82,425 | |||||||||||
| General and administrative | 3,591 | 6,080 | 18,897 | 26,200 | |||||||||||
| Total operating expenses | 12,387 | 23,670 | 67,772 | 108,625 | |||||||||||
| Loss from operations | 5,371 | 21,059 | 10,466 | 88,871 | |||||||||||
| Interest and other income, net | 178 | 425 | 1,208 | 988 | |||||||||||
| Interest and other expense, net | (39 | ) | (1,351 | ) | (2,654 | ) | (4,716 | ) | |||||||
| Gain on extinguishment of debt | — | — | 1,795 | — | |||||||||||
| Change in valuation of contingent value right | 1,273 | — | 2,457 | — | |||||||||||
| Loss on disposal of property and equipment | — | (37 | ) | (475 | ) | (66 | ) | ||||||||
| Loss before provision (benefit) for income taxes | 3,959 | 22,022 | 8,135 | 92,665 | |||||||||||
| Provision (benefit) for income taxes | (11 | ) | 27 | (11 | ) | 53 | |||||||||
| Net loss attributable to common shareholders | $ | 3,948 | $ | 22,049 | $ | 8,124 | $ | 92,718 | |||||||
| Net loss per share attributable to common shareholders: | |||||||||||||||
| Basic and diluted | $ | 0.73 | $ | 5.87 | $ | 1.80 | $ | 24.69 | |||||||
| Weighted average number of shares used in net loss per share calculations: | |||||||||||||||
| Basic and diluted | 5,374,268 | 3,756,711 | 4,501,206 | 3,755,564 | |||||||||||
| Molecular Templates, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) | ||||||||||
| December 31, 2023 | December 31, 2022 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 11,523 | $ | 32,190 | ||||||
| Marketable securities, current | — | 28,859 | ||||||||
| Prepaid expenses | 2,195 | 3,459 | ||||||||
| Grants revenue receivable | 250 | — | ||||||||
| Other current assets | 2,804 | 3,790 | ||||||||
| Total current assets | 16,772 | 68,298 | ||||||||
| Operating lease right-of-use assets | 9,161 | 11,132 | ||||||||
| Property and equipment, net | 7,393 | 14,632 | ||||||||
| Other assets | 2,057 | 3,486 | ||||||||
| Total assets | $ | 35,383 | $ | 97,548 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT) | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 1,523 | $ | 504 | ||||||
| Accrued liabilities | 4,279 | 8,823 | ||||||||
| Deferred revenue, current | 9,031 | 45,573 | ||||||||
| Other current liabilities | 2,488 | 2,182 | ||||||||
| Total current liabilities | 17,321 | 57,082 | ||||||||
| Deferred revenue, long-term | — | 5,904 | ||||||||
| Long-term debt, net of current portion | — | 36,168 | ||||||||
| Operating lease liabilities, long term portion | 9,742 | 12,231 | ||||||||
| Contingent value right liability | 2,702 | — | ||||||||
| Other liabilities | 1,406 | 1,295 | ||||||||
| Total liabilities | 31,171 | 112,680 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders’ equity/(deficit) | ||||||||||
| Preferred stock, | ||||||||||
| Authorized: 2,000,000 shares as of December 31, 2023 and 2022; Issued and outstanding: 250 shares as of December 31, 2023 and 2022 | — | — | ||||||||
| Common stock, | ||||||||||
| Authorized: 150,000,000 shares as of December 31, 2023 and 2022; Issued and outstanding: 5,374,268 shares as of December 31, 2023 and 3,756,711 shares as of December 31, 20221 | 5 | 4 | ||||||||
| Additional paid-in capital1 | 457,099 | 429,698 | ||||||||
| Accumulated other comprehensive loss | — | (66 | ) | |||||||
| Accumulated deficit | (452,892 | ) | (444,768 | ) | ||||||
| Total stockholders’ equity/(deficit) | 4,212 | (15,132 | ) | |||||||
| Total liabilities and stockholders’ equity/(deficit) | $ | 35,383 | $ | 97,548 | ||||||
1. Prior period amounts have been retrospectively adjusted for the 1-for-15 reverse stock split that was effective August 11, 2023.
About Molecular Templates
Molecular Templates is a clinical-stage biopharmaceutical 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.
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, including, but not limited to those regarding strategy, future operations, the Company’s ability to execute on its objectives, prospects, plans, future clinical development of the Company’s product candidates, any implication that the preliminary results, interim results, or the results of earlier clinical trials or ongoing clinical trials will be representative of the results of future or later clinical trials or final results, the potential benefits, safety or efficacy and any evaluations or judgements regarding the Company’s product candidates, [the results of any strategic process which are inherently uncertain at the present time] and future execution of corporate goals. In addition, when or if used in this press release, the words “may,” “could,” “should,” “continue”, “anticipate,” “potential”, “believe,” “estimate,” “appears”, “expect,” “intend,” “plan,” “predict” and similar expressions and their variants, as they relate to Molecular Templates may identify forward-looking statements. 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 following: the continued availability of financing on commercially reasonable terms, whether Molecular Templates’ cash resources will be sufficient to fund its continuing operations; the results of MTEM’s ongoing clinical studies and the ability to effectively operate MTEM, and those risks identified under the heading “Risk Factors” in Molecular Templates’ filings with the Securities and Exchange Commission (the “SEC”), including its Form 10-K for the year ended December 31, 2023 and any subsequent reports filed with the SEC. Any forward-looking statements contained in this press release speak only as of the date hereof, and Molecular Templates specifically disclaims any obligation to update any forward-looking statement, whether because of new information, future events or otherwise.
Contacts:
grace.kim@mtem.com
FAQ
What were the financial results reported by Molecular Templates, Inc. for Q4 2023?
What positive clinical data was highlighted by the company regarding MT-6402?
What recent funding activity did Molecular Templates, Inc. engage in?
What major event occurred regarding a collaboration agreement with Bristol-Myers Squibb?
What is the company's cash runway expectation following the recent private placement?
