Marker Therapeutics, Inc. — 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; filed March 17, 2022. This is an annual report, not a standalone fourth-quarter report. Marker is a clinical-stage immuno-oncology company developing MultiTAA-specific T-cell therapies and peptide vaccines. It had no product sales or licensing revenue.
Financial performance and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Grant revenue | $1.24 million | $0.47 million |
| Research and development expense | $27.79 million | $18.88 million |
| General and administrative expense | $12.92 million | $10.47 million |
| Operating loss | $39.48 million | $28.89 million |
| Net loss | $41.88 million | $28.71 million |
| Net loss per share | $0.55 | $0.61 |
| Cash used in operating activities | $27.28 million | $20.03 million |
Grant revenue is not product revenue; the filing reports no sales or licensing income. Product gross margin is therefore not applicable. Operating expenses rose 39%, led by higher R&D spending, and net loss increased 46%, including a $2.41 million arbitration charge. Loss per share narrowed despite the larger net loss, as weighted-average shares rose 63% to 76.5 million.
At year-end, cash, cash equivalents and restricted cash totaled $43.50 million, versus $21.35 million a year earlier; working capital was $33.08 million. Investing activities used $3.13 million, while financing provided $52.56 million, chiefly from a March 2021 public offering that generated $52.6 million net and issued 32.3 million shares. Management expected year-end cash to fund operations and capital expenditures into the first quarter of 2023, but warned actual needs could arise sooner. The company reported substantial doubt about its ability to continue as a going concern and expects to need additional capital.
No conventional borrowings are shown in the balance sheet presented. Operating lease liabilities were approximately $11.9 million, including $0.6 million current and $11.2 million non-current. The company also had a $75 million at-the-market equity program, with no shares sold under it by the filing date. Potential dilution includes outstanding warrants for approximately 19.8 million shares and options for approximately 7.7 million shares.
Business developments, comparison and outlook
- MT-401 for post-transplant AML: The Phase 2 trial completed its six-patient safety lead-in in June 2021 and continued in July. No dose-limiting toxicities, cytokine release syndrome or neurotoxicity were reported in the lead-in; one MRD-positive patient became MRD-negative, while frank-relapse patients had no objective responses. Approximately 20 patients had enrolled; management expected active-disease-arm results in Q2 2022. A CPRIT award of approximately $13.1 million supports the trial; $2.4 million had been received by year-end.
- Other programs: MT-401-OTS was expected to dose its first patient in 2023. Marker planned 2022 IND submissions and 2023 Phase 1 starts for MT-601 in pancreatic cancer and lymphoma. The FDA granted MT-601 orphan-drug designation for pancreatic cancer in January 2022.
- Partner-reported evidence: Earlier BCM studies reported signals of activity in AML, lymphoma and pancreatic cancer, but these were early-stage and/or partner-led results. In the pancreatic trial’s front-line arm, 4 of 13 evaluable patients had objective responses. The filing cautions that early results may not predict later controlled trials.
- Manufacturing: Marker began producing MT-401 for Phase 2 at its Houston cGMP facility in Q4 2021. It also described a newer nine-day manufacturing process as more potent based on in-vitro testing; clinical equivalence and outcomes remain uncertain.
- Outlook and risks: Management expects continued losses and higher development costs, with no substantial product revenue expected for several years, if ever. Clinical, regulatory, manufacturing, funding, competition and COVID-19 risks remain material. The company was notified in February 2022 that its share price failed Nasdaq’s $1 minimum bid-price requirement; it had until August 15, 2022 to regain compliance.
Contingencies and other notable items
A broker’s FINRA arbitration award of $2.4 million was recorded in 2021. On March 9, 2022, the company’s motion to vacate was denied and an additional $0.1 million in interest was awarded; post-judgment interest continues to accrue at 1.02% until paid. The auditor issued an unqualified opinion but included a going-concern explanatory paragraph. Management said disclosure controls and internal control over financial reporting were effective as of year-end. No critical audit matters were identified.
Investor verification priorities
- Check subsequent MT-401 trial results, enrollment, endpoints and any changes to the expected reporting schedule.
- Assess the cash runway against current spending, remaining CPRIT support, capital needs and any financing since the filing.
- Verify resolution and payment of the arbitration award and accruing interest.
- Confirm the status of Nasdaq bid-price compliance and potential delisting or transfer options.
- Track the new manufacturing process, supplier qualification, clinical comparability and commercial-scale feasibility.
- Review dilution from future equity issuance, warrants, options and use of the ATM facility.