Compass Therapeutics, Inc. — 2021 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2021; filed March 18, 2022. Compass is a clinical-stage oncology biopharmaceutical company developing antibody-based therapeutics. Its principal candidates are CTX-009, CTX-471 and CTX-8371. The common stock trades on Nasdaq Capital Market under CMPX, beginning November 2, 2021.
Financial performance and position
| Metric | 2021 | 2020 | Change |
|---|---|---|---|
| Product revenue | $0 | $0 | No product revenue since inception |
| Research and development expense | $20.3 million | $14.9 million | +$5.4 million |
| General and administrative expense | $10.9 million | $12.9 million | -$2.0 million |
| In-process R&D expense | $50.6 million | $0 | Primarily CTX-009 acquisition accounting |
| Total operating expenses | $81.9 million | $27.8 million | +$54.1 million |
| Net loss | $82.2 million | $29.5 million | Loss increased $52.7 million |
| Net loss per share | $1.31 | $0.96 | Basic and diluted |
| Cash used in operating activities | $19.7 million | $26.8 million | Use decreased $7.1 million |
| Cash and cash equivalents at year-end | $144.5 million | $47.1 million | +$97.4 million |
Gross proceeds from equity financings totaled approximately $329.0 million through December 31, 2021. The November and December 2021 follow-on offering generated approximately $136.5 million of gross proceeds and $128.0 million of net proceeds. Cash equivalents included approximately $130.0 million in money market funds.
Debt was eliminated during 2021. The Company repaid approximately $9.4 million under its Pacific Western Bank credit facility and terminated the facility. Year-end liabilities were $13.7 million, including $4.0 million of operating lease obligations and $8.8 million of accrued expenses.
Accumulated deficit was $233.6 million at December 31, 2021. Management expects existing cash to fund operating expenses and capital expenditures into the second half of 2024, but states that additional financing will be required to complete development and pursue commercialization.
Material changes from 2020
- Research and development expense increased primarily because of a $6.0 million CTX-009 milestone payment and increased program activity.
- In June 2021, Compass acquired TRIGR Therapeutics for 10.3 million shares valued at approximately $50.3 million, plus approximately $0.3 million of transaction costs. The transaction was accounted for as an asset acquisition, and the acquired CTX-009 in-process R&D was expensed.
- CTX-009 became a principal development program. A $6.0 million milestone payable to ABL Bio was accrued following completion of the Phase 1 trial.
- General and administrative expense declined because 2020 included nonrecurring public-company transition and higher facility costs.
- The Company moved into a Boston office and laboratory facility and adopted new lease accounting, recording a $4.1 million operating lease right-of-use asset at year-end.
- Shares outstanding increased substantially through the TRIGR acquisition and the follow-on public offering. Approximately 100.8 million shares were outstanding at December 31, 2021.
Pipeline, outlook and management commentary
- CTX-009: A DLL4 x VEGF-A bispecific antibody. In a Phase 1 monotherapy study at projected efficacious doses, the reported ORR was 18.8% and CBR was 68.8% among 16 evaluable patients. In a 17-patient combination study, reported ORR was 23.5% and CBR was 76.5%; in four biliary tract cancer patients, confirmed ORR was 50% with reported median duration of response of 9.7 months.
- A Phase 2a CTX-009 plus paclitaxel study in biliary tract cancer reported preliminary ORR of 29% among 17 evaluable patients and CBR of 100%. These are interim, early-stage data and remain subject to confirmation in larger studies.
- The FDA cleared the CTX-009 IND in January 2022. Management planned to open U.S. sites in the second quarter of 2022 and begin U.S. dosing in the third quarter of 2022. Management targeted a Phase 2/3 program and potential BLA filing in 2024, subject to regulatory feedback, clinical results, manufacturing supply and available cash.
- CTX-471: A CD137 agonist antibody. The Phase 1a dose-escalation study enrolled 19 patients, established 0.6 mg/kg as the maximum tolerated dose and reported no complete or partial responses. As of February 25, 2022, the Phase 1b expansion had enrolled 49 patients, with 38 evaluable; reported preliminary ORR was 8% and CBR was 58%.
- Management expected to complete the CTX-471 Phase 1b expansion in the first half of 2022 and was considering combination therapy with a checkpoint inhibitor, small-cell lung cancer maintenance therapy or post-checkpoint salvage monotherapy.
- CTX-8371: A PD-1 x PD-L1 bispecific antibody. IND-enabling studies were progressing, but manufacturing delays and supply-chain challenges at Fujifilm Diosynth delayed the GMP campaign. Management targeted an FDA IND submission in the first quarter of 2023.
Key risks, contingencies and unusual items
- The Company has no approved products, no product sales revenue and a history of significant losses. Profitability may never be achieved.
- Clinical development is lengthy, costly and uncertain. Early-stage or interim results may not predict later-stage outcomes, and small open-label studies may be subject to bias and limited statistical reliability.
- Additional capital will be needed. Future financings may dilute existing stockholders, impose debt covenants or require the Company to relinquish rights to products or technologies.
- Regulatory approval is uncertain. The proposed CTX-009 BLA timeline and accelerated-approval strategy remain preliminary and have not been fully agreed with regulators, particularly for colorectal cancer.
- The Company relies on CROs and third-party manufacturers. CTX-8371 manufacturing delays have already affected the expected IND timeline, and additional supply, quality or manufacturing failures could delay development.
- Reported clinical safety issues included hypertension with CTX-009, chemotherapy-associated cytopenias, a Grade 5 pneumonia in the preliminary Phase 2a safety table, and thrombocytopenia-related dose-limiting toxicity with CTX-471.
- COVID-19 may continue to affect patient enrollment, clinical sites, suppliers, manufacturing and regulatory activities.
- Material contractual commitments included $6.0 million of probable CTX-009 milestone payments, $4.4 million of operating lease payments, and $1.2 million of manufacturing commitments. The table excludes uncertain future milestones and royalties.
- The Company reported no material litigation and stated that disclosure controls and internal control over financial reporting were effective. The auditor did not provide an internal-control attestation because the Company is an emerging growth company.
Most important facts for investors to verify
- Whether the reported CTX-009 biliary tract cancer activity is confirmed and sustained in the global Phase 2 program.
- Timing, design and regulatory acceptance of the planned CTX-009 Phase 2/3 studies and potential 2024 BLA filing.
- Final CTX-471 Phase 1b data, including response durability and thrombocytopenia risk.
- Whether CTX-8371 manufacturing issues are resolved and whether the targeted first-quarter 2023 IND submission remains achievable.
- Cash burn, updated runway assumptions and the timing and terms of any future financing.
- Outstanding ABL Bio, Adimab and TRIGR-related milestone obligations, royalties and earnouts.
- Potential dilution from approximately 5.3 million outstanding options, restricted stock units and unvested restricted shares at year-end 2021.