CytomX Therapeutics, Inc. — Q3 2021 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2021. Unaudited financial statements. CytomX is a clinical-stage oncology biopharmaceutical company developing antibody-based therapeutics using its Probody platform; it has no products approved for sale.
Financial performance and position
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $17.6 million | $17.8 million | $49.8 million | $84.0 million |
| Research and development expense | $29.1 million | $24.0 million | $77.6 million | $90.9 million |
| General and administrative expense | $11.1 million | $8.6 million | $29.7 million | $26.9 million |
| Operating loss | $22.6 million | $14.9 million | $57.5 million | $33.8 million |
| Net loss | $22.6 million | $14.7 million | $57.4 million | $18.2 million |
| Basic and diluted loss per share | $0.35 | $0.32 | $0.90 | $0.40 |
- Revenue is primarily collaboration, license, milestone and research-service revenue, not product sales. Gross margin is not separately presented.
- For the nine months, operating cash flow was negative $87.8 million, versus positive $22.7 million a year earlier. Investing activities provided $22.7 million; financing provided $109.5 million, principally from the January/February follow-on offering.
- At September 30, cash and cash equivalents were $236.3 million, short-term investments $0.005 million and long-term investments $100.0 million: approximately $336.3 million in cash, cash equivalents and investments. Total assets were $371.2 million; total liabilities were $259.6 million; stockholders’ equity was $111.7 million.
- The filing reports no borrowings or debt. Operating lease liabilities totaled $22.5 million. Deferred revenue was $213.9 million, including $73.1 million current.
- Accumulated deficit was $507.5 million. Common shares outstanding rose to 65.25 million from 48.25 million at year-end 2020, primarily reflecting the follow-on offering.
Changes versus the prior comparable periods
- Q3 revenue was nearly unchanged year over year. Nine-month revenue declined $34.1 million, mainly because 2020 included recognition of an AbbVie $40 million milestone and a Bristol Myers Squibb $10 million milestone. Higher Astellas revenue partly offset those decreases.
- Q3 R&D expense increased $5.1 million, mainly from personnel, clinical-trial and contract/manufacturing activity for CX-2009 and CX-2029. Nine-month R&D expense decreased $13.3 million, primarily reflecting lower sublicense and licensing costs and timing of trial and manufacturing expenses.
- Q3 net loss widened by $7.9 million. The nine-month net loss increased substantially from 2020, which included a $13.9 million CARES Act-related income tax benefit and the collaboration milestone revenue noted above. CytomX reported no income tax benefit in the 2021 nine-month period.
- Cash and investments increased from $316.1 million at December 31, 2020 to $336.3 million at September 30, 2021, with the public offering providing $107.7 million net proceeds. Operating cash use was affected by a $47.3 million reduction in deferred revenue as previously received collaboration payments were recognized.
Outlook, management commentary and risks
- Management stated that existing capital resources were expected to fund operations for at least 12 months from issuance of the financial statements, while also noting that additional funding will be required in the future. Spending plans may need to change if operating results or financing do not meet expectations.
- Management maintained its outlook for initial praluzatamab ravtansine (CX-2009) Phase 2 data in 2022 after COVID-19 affected site activation and enrollment. Initial CX-2029 Phase 2 data remained on track for Q4 2021. The company expected to file an IND for partnered CX-904 in late 2021.
- Praluzatamab ravtansine is being studied in three breast-cancer arms; CX-2029 is being evaluated in four cancer cohorts. Development and timing remain dependent on enrollment, clinical results, regulatory review, manufacturing and collaborator decisions.
- In October 2021, after the quarter end, CytomX and Amgen amended their collaboration agreement, including extending Amgen’s target-selection date and revising milestone terms for EGFR products.
- COVID-19 continued to pose risks to clinical-site activation, patient enrollment, research and supply chains. CytomX relies on third parties for clinical trials and manufacturing and has no manufacturing capability of its own; many suppliers are sole-source providers.
- Material uncertainties include the clinical safety and efficacy of early-stage candidates and the unproven Probody platform, potential trial delays or failures, collaborator dependence, future financing and dilution, and manufacturing scale-up and supply continuity.
- Vytacera Bio’s patent-infringement suit seeks unspecified damages. The company considers the claim without merit and intends to defend it; discovery was stayed in October 2021. No litigation accrual was recorded, and the company stated it could not reasonably estimate potential charges.
Key facts for investors to verify
- Whether CX-2009 and CX-2029 enrollment, data timing and safety/efficacy outcomes support the stated clinical outlook.
- Whether cash and investment levels, operating cash burn and collaboration receipts support the stated runway, and when additional financing may be needed.
- How collaboration milestones, deferred revenue recognition and partner program decisions affect future revenue and cash flow.
- Whether third-party manufacturing and supply arrangements can meet clinical needs and support scale-up without delays or additional costs.
- Developments in the Vytacera litigation and any resulting financial or intellectual-property consequences.