CytomX Therapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Unaudited results; amounts below are in U.S. dollars. CytomX is a clinical-stage oncology biotechnology company developing Probody therapeutics and has no products approved for sale.
Financial performance and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | $17.1 million | $16.0 million; up $1.2 million, or about 7% |
| Research and development expense | $30.6 million | $22.4 million; up $8.2 million |
| General and administrative expense | $10.5 million | $9.2 million; up $1.3 million |
| Operating loss | $24.0 million | $15.6 million |
| Net loss | $23.9 million | $15.6 million |
| Basic and diluted loss per share | $0.37 | $0.26 |
| Cash used in operating activities | $41.3 million | $29.9 million |
Revenue came from collaboration agreements, not product sales. Q1 2022 revenue by partner was Bristol Myers Squibb (BMS) $7.4 million, Astellas $5.0 million, AbbVie $2.4 million, and Amgen $2.3 million. The increase year over year was primarily attributed to greater progress on AbbVie’s CD71 collaboration. Operating expenses rose 30% overall, with R&D expense increasing mainly because of laboratory contract services and manufacturing and development activity. The operating loss was approximately 140% of revenue.
At March 31, 2022, cash and cash equivalents were $163.5 million and short-term investments were $99.0 million, totaling $262.5 million; this compares with $305.2 million at December 31, 2021. Total assets were $296.8 million and stockholders’ equity was $68.2 million. Current assets of $268.4 million exceeded current liabilities of $102.8 million. The balance sheet reports no borrowings; liabilities primarily include deferred collaboration revenue, accrued liabilities, and lease obligations. Deferred revenue totaled $178.8 million, down from $194.9 million at year-end. Accumulated deficit was $557.6 million.
Cash, cash equivalents, and restricted cash declined by $42.0 million during the quarter. Investing activities used $0.7 million, mainly for property and equipment; financing activities provided $7,000 from stock-option exercises. No material changes in contractual obligations were reported. 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 the need to raise additional funds in the future.
Material changes, outlook, and risks
- Clinical programs: Praluzatamab ravtansine (CX-2009) was in a Phase 2 breast-cancer study; enrollment in Arm A was complete, Arms B and C were ongoing, and initial data for Arms A and B were expected in the second half of 2022. CX-2029 was in Phase 2 expansion; enrollment in the squamous non-small cell lung cancer cohort was complete, and an update was expected in the second half of 2022. The CX-904 IND was cleared by the FDA in January 2022, with Phase 1 study start-up underway.
- Development uncertainty: The company expects significant losses to continue and R&D expenses to increase as trials advance. It provided no specific financial guidance for revenue, earnings, or cash burn. Trial timelines and costs remain uncertain, including because of enrollment, regulatory, manufacturing, and funding risks.
- COVID-19 and supply: Management said the pandemic continued to affect operations and could disrupt clinical trials, enrollment, research, and manufacturing; the financial impact could not be reasonably estimated. CytomX has no manufacturing capabilities and relies on third parties, many of them sole-source suppliers.
- Collaboration dependence: Current revenue is generated under partner agreements, and future milestone and royalty income depends on partner decisions and development progress. Potential milestone payments were constrained from revenue recognition because achievement was outside the company’s control and could cause a significant revenue reversal.
- Legal and tax matters: Vytacera Bio’s patent-infringement lawsuit seeks unspecified damages; proceedings were stayed pending claim-construction matters. CytomX said it considers the suit without merit and recorded no accrual. California was examining the company’s 2017–2018 revenue-apportionment tax positions; no proposed adjustments had been made, and the company could not estimate the resolution date or potential impact, but did not expect a material effect.
- Other risks: Product candidates remain investigational, with uncertain efficacy and safety; the filing discusses potential toxicities, clinical-trial delays, competition, regulatory hurdles, and dependence on collaborators and contractors. Management reported effective disclosure controls as of March 31, 2022.
Important facts for investors to verify
- Whether expected 2022 clinical data and enrollment milestones were achieved, and how subsequent data affect the prospects of CX-2009 and CX-2029.
- Actual cash burn and remaining liquidity relative to management’s stated 12-month funding expectation, including any financing or spending changes.
- Progress and partner decisions under AbbVie, Amgen, Astellas, and BMS agreements, including any milestone receipts, cost-sharing elections, or program changes.
- Updates on clinical supply reliability and the company’s dependence on third-party, often sole-source, manufacturers.
- Developments in the Vytacera litigation and California tax examination, including any changes to potential exposure.