Marker Therapeutics, Inc. — Q3 2023 Form 10-Q
Reporting period: Three and nine months ended September 30, 2023. Marker is a clinical-stage immuno-oncology company developing multiTAA T-cell therapies; it has no product sales. Financial statements are unaudited.
Financial performance and liquidity
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Grant revenue | $0.258 million | $1.000 million | $2.255 million | $2.754 million |
| Operating expenses | $3.458 million | $6.826 million | $13.898 million | $19.507 million |
| Loss from continuing operations | $2.982 million | $5.727 million | $11.306 million | $16.733 million |
| Net loss | $2.982 million | $6.920 million | $5.434 million | $26.074 million |
| Net loss per share | $0.34 | $0.83 | $0.62 | $3.13 |
- At September 30, cash and cash equivalents were $17.474 million, versus $11.782 million at year-end 2022. Working capital was $16.707 million, versus $8.837 million.
- Total assets were $19.487 million and total liabilities $2.779 million. The balance sheet reports no debt; liabilities consisted mainly of accounts payable and accrued liabilities, with a $0.368 million related-party payable to Cell Ready.
- Nine-month operating cash use was $14.072 million, including $8.036 million from continuing operations and $6.036 million from discontinued operations. Investing activities provided $18.664 million, primarily from the Cell Ready asset sale; financing provided $1.100 million. Cash increased by $5.692 million.
- No meaningful product gross margin is reported because revenue consists of grants, not product sales.
Material changes and unusual items
- On June 26, Marker sold manufacturing facilities, equipment, leasehold improvements and related contracts to Cell Ready for $19.0 million. The transaction generated an approximately $8.8 million gain, reported in discontinued operations. Prior-period presentation was adjusted to classify the disposed operations as discontinued.
- The nine-month net loss improved substantially year over year, but the comparison includes the $8.8 million disposal gain in 2023 and discontinued-operation losses in both periods. Continuing-operation losses provide a clearer view of ongoing results.
- Operating expenses declined year over year, reflecting lower process-development, clinical-trial, headcount and stock-compensation costs, among other items. Marker also recorded $0.9 million in severance and termination costs during Q2; payments were completed in July.
- Marker effected a 1-for-10 reverse stock split in January 2023. It sold shares through its ATM and Lincoln Park arrangements and option exercises, raising approximately $1.1 million in total during the first nine months. As of November 7, 2023, 8,889,020 common shares were outstanding.
Outlook, development and risks
- Management expects September 30 cash to fund operating and capital requirements into the second half of 2025. This is an estimate based on assumptions that may prove incorrect; Marker says it may need additional funding sooner and expects substantial losses to continue.
- The company is reviewing its clinical development programs, including trial initiation and readout guidance. No formal financial guidance is provided.
- Management reported preliminary results from the first participant in the Phase 1 APOLLO trial of MT-601: after two doses, the participant had no treatment-related adverse events above Grade 1 and showed a complete metabolic response eight weeks after the second infusion. This is an early result from one participant; additional data were anticipated in Q1 2024.
- Marker anticipated treating the first patient with MT-401-OTS in 2024. Further clinical advancement of programs is subject to financial support, including non-dilutive grants. CPRIT and FDA grants supported MT-401; Marker also disclosed a $2.0 million NIH SBIR grant award for which it had not yet received funds.
- Marker no longer operates its own cGMP manufacturing facilities and expects to rely on third parties. Although it intends to enter a long-term services agreement with Cell Ready, the agreement had not been executed as of September 30. Cell Ready is a related party through a director who serves as its CEO, creating execution and related-party considerations.
- Key risks include clinical and regulatory uncertainty, dependence on grants and external financing, possible dilution, third-party manufacturing capacity and compliance, and potential disruption or failure to realize expected savings from the Cell Ready transaction. The company reported no material pending legal proceedings and no material changes to most previously disclosed risk factors.
Important facts for investors to verify
- Whether Marker executes the planned Cell Ready services agreement, on what terms, and whether manufacturing and trial timelines remain achievable.
- Whether cash burn and development plans remain consistent with management’s runway estimate into the second half of 2025, including the timing and availability of grant funds or additional financing.
- Follow-up APOLLO trial data and the evidentiary strength of the preliminary MT-601 response, as well as progress toward the anticipated MT-401-OTS first-patient treatment.
- Continuing-operation costs and cash use apart from the one-time Cell Ready disposal proceeds and discontinued operations.
- Potential dilution from available equity financing arrangements; also note that the 1,848,000 outstanding warrants expired October 16, 2023.