Announces strategic reprioritization to focus on clinical development of MT-6402, MT-8421, and MT-0169, and preclinical activities related to BMS collaboration, and related workforce reduction
AUSTIN, Texas, March 30, 2023 (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, 2022. MTEM also announced a strategic reprioritization and corresponding reduction in workforce, in order to focus on its core clinical development programs and extend its financial runway.
Strategic Reprioritization and Cost-Saving Measures
On March 29, 2023, the Board of Directors of MTEM approved a strategic reprioritization and corresponding reduction in workforce, designed to focus on the clinical development programs for MT-6402 (PD-L1), MT-8421 (CTLA-4), and MT-0169 (CD38), and preclinical activities related to MTEM’s collaboration with Bristol Myers Squibb. This restructuring will reduce MTEM’s workforce by approximately 50%, result in the cessation of the MT-5111 (HER2) clinical development program, and focus the majority of MTEM’s preclinical efforts around activities related to the Bristol Myers Squibb collaboration.
Eric Poma, PhD., Chief Executive and Chief Scientific Officer of MTEM, stated: “These cost-savings measures are a difficult, but necessary, step for MTEM to take in order to continue pursuing the development of these promising programs. We thank all our employees who have worked so hard to bring these programs this far, and we will continue this important work with our refocused strategy and available resources.” Dr. Poma added, “We have now seen evidence of monotherapy clinical activity with MT-6402 through two separate mechanisms of action unique to immuno-oncology: the alteration of tumor immunophenotype and the dismantling of the tumor microenvironment (‘TME’). We recently announced the FDA’s acceptance of our Investigational New Drug Application (‘IND’) for MT-8421, a new approach to CTLA-4 that we believe can potently deplete Tregs in the TME without driving immune-related adverse events (‘irAEs’). We look forward to providing further updates on our MT-6402, MT-8421 and MT-0169 programs throughout 2023.”
Company Highlights
MT-6402 (PD-L1-targeting ETB with Antigen Seeding Technology)
Highlights from the on-going Phase I study include:
MT-8421 (CTLA-4 ETB)
MT-0169 (CD38 ETB)
Key Milestones for 2023
Conferences
Financial Results
The net loss attributable to common shareholders for the fourth quarter of 2022 was $22.0 million, or $0.39 per basic and diluted share. This compares with a net loss attributable to common shareholders of $10.2 million, or $0.18 per basic and diluted share, for the same period in 2021.
Revenues for the fourth quarter of 2022 were $2.6 million, compared to $18.0 million for the same period in 2021. Revenues for the fourth quarter of 2022 were comprised of revenues from collaborative research and development agreements with Bristol Myers Squibb.
Total research and development expenses for the fourth quarter of 2022 were $17.6 million, compared with $19.3 million for the same period in 2021. Total general and administrative expenses for the fourth quarter of 2022 were $6.1 million, compared with $7.9 million for the same period in 2021.
As of December 31, 2022, MTEM’s cash and investments totaled $61.0 million, including borrowings of $35.0 million under its K2 Loan and Security Agreement whose scheduled maturity date for repayment is June 1, 2024, subject to continued compliance with the financial covenant and solvency requirements therein. MTEM is currently in compliance with such covenant and requirements, and expects to continue to be in compliance into the fourth quarter of 2023. Any default of the financial covenant or solvency requirements would potentially trigger accelerated repayment. Subject to MTEM’s continued compliance with the K2 Loan and Security Agreement, MTEM anticipates a cash runway into the second quarter of 2024.
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 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 regarding the Company’s continued compliance with the financial covenant and solvency requirements in the K2 Loan and Security Agreement, the Company’s cash runway, the safety or potential efficacy of Molecular Templates’ drug or biologic candidates; Molecular Templates’ belief that its proprietary biologic drug platform technology, or ETBs, provides for a differentiated mechanism of action for cancer; and the prospects for continued clinical development and regulatory approval. 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: whether the Company can realize the anticipated cost-savings of its restructuring, whether the Company is successful at raising additional capital, whether beyond 2023 the Company is able to negotiate an amendment to the financial covenant or solvency requirements or otherwise amend the K2 Loan and Security Agreement (to the extent needed), the uncertainties inherent in the preclinical and clinical development process, including the fact that interim results may not be indicative of future results; Molecular Templates’ ability to timely enroll patients in its clinical trials; the ability of Molecular Templates’ 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 Molecular Templates’ filings 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:
Dr. Grace Kim
Head of Investor Relations
grace.kim@mtem.com
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, |
|||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Research and development revenue, related party | $ | — | $ | — | $ | — | $ | 13,136 | ||||||||
Research and development revenue, other | 2,611 | 17,964 | 19,754 | 25,561 | ||||||||||||
Total revenue | 2,611 | 17,964 | 19,754 | 38,697 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 17,590 | 19,337 | 82,425 | 84,665 | ||||||||||||
General and administrative | 6,080 | 7,928 | 26,200 | 34,106 | ||||||||||||
Total operating expenses | 23,670 | 27,265 | 108,625 | 118,771 | ||||||||||||
Loss from operations | 21,059 | 9,301 | 88,871 | 80,074 | ||||||||||||
Interest and other income, net | 425 | 126 | 988 | 434 | ||||||||||||
Interest and other expense, net | (1,388 | ) | (1,068 | ) | (4,782 | ) | (3,369 | ) | ||||||||
Loss before provision for income taxes | 22,022 | 10,243 | 92,665 | 83,009 | ||||||||||||
Provision for income taxes | 27 | — | 53 | — | ||||||||||||
Net loss attributable to common shareholders | $ | 22,049 | $ | 10,243 | $ | 92,718 | $ | 83,009 | ||||||||
Net loss per share attributable to common shareholders: | ||||||||||||||||
Basic and diluted | $ | 0.39 | $ | 0.18 | $ | 1.65 | $ | 1.50 | ||||||||
Weighted average number of shares used in net loss per share calculations: | ||||||||||||||||
Basic and diluted | 56,351,647 | 56,305,049 | 56,334,456 | 55,297,798 | ||||||||||||
Molecular Templates, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
December 31, 2022 |
December 31, 2021 |
|||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 32,190 | $ | 24,983 | ||||
Marketable securities, current | 28,859 | 118,061 | ||||||
Prepaid expenses | 3,459 | 3,917 | ||||||
Other current assets | 3,790 | 1,254 | ||||||
Total current assets | 68,298 | 148,215 | ||||||
Marketable securities, non-current | — | 8,986 | ||||||
Operating lease right-of-use assets | 11,132 | 8,608 | ||||||
Property and equipment, net | 14,632 | 19,309 | ||||||
Other assets | 3,486 | 7,244 | ||||||
Total assets | $ | 97,548 | $ | 192,362 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 504 | $ | 1,612 | ||||
Accrued liabilities | 8,823 | 9,515 | ||||||
Deferred revenue, current | 45,573 | 32,937 | ||||||
Other current liabilities | 2,182 | 2,606 | ||||||
Total current liabilities | 57,082 | 46,670 | ||||||
Deferred revenue, long-term | 5,904 | 33,350 | ||||||
Long-term debt, net of current portion | 36,168 | 35,491 | ||||||
Operating lease liabilities | 12,231 | 9,564 | ||||||
Other liabilities | 1,295 | 1,625 | ||||||
Total liabilities | 112,680 | 126,700 | ||||||
Commitments and contingencies (Note 10) | ||||||||
Stockholders’ equity | ||||||||
Preferred stock, $0.001 par value: | ||||||||
Authorized: 2,000,000 shares at December 31, 2022 and December 31, 2021; issued and outstanding: 250 shares at December 31, 2022 and December 31, 2021 |
— | — | ||||||
Common stock, $0.001 par value: | ||||||||
Authorized: 150,000,000 shares at December 31, 2022 and December 31, 2021; issued and outstanding: 56,351,647 December 31, 2022 and 56,305,049 shares at December 31, 2021 |
56 | 56 | ||||||
Additional paid-in capital | 429,646 | 417,704 | ||||||
Accumulated other comprehensive loss | (66 | ) | (48 | ) | ||||
Accumulated deficit | (444,768 | ) | (352,050 | ) | ||||
Total stockholders’ (deficit) equity | (15,132 | ) | 65,662 | |||||
Total liabilities and stockholders’ (deficit) equity | $ | 97,548 | $ | 192,362 |
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