Marker Therapeutics, Inc. — 2020 Form 10-K
Business context and reporting period. This annual report covers the fiscal year ended December 31, 2020, with 2019 as the comparable period. Marker is a clinical-stage immuno-oncology company developing non-engineered, multi-antigen T-cell therapies and peptide vaccines. It had no approved products and generated no product-sale or licensing revenue. The financial statements were audited and presented fairly under U.S. GAAP; the auditor included an explanatory paragraph citing substantial doubt about the company’s ability to continue as a going concern.
Key financial metrics
| Metric | 2020 | 2019 |
|---|---|---|
| Revenue | $0.467 million, all grant income | $0.213 million, all grant income |
| Research and development expense | $18.881 million | $12.765 million |
| General and administrative expense | $10.472 million | $9.977 million |
| Total operating expenses | $29.353 million | $22.742 million |
| Operating loss | $28.886 million | $22.529 million |
| Net loss | $28.706 million | $21.428 million |
| Basic and diluted loss per share | $0.61 | $0.47 |
| Cash used in operating activities | $18.860 million | $18.284 million |
| Cash used in investing activities | $10.428 million | $0.375 million |
| Cash provided by financing activities | $6.736 million | $0.816 million |
| Cash and cash equivalents at year-end | $21.352 million | $43.904 million |
| Working capital at year-end | $18.009 million | $43.494 million |
The company reported no commercial product revenue, so a commercial gross margin is not applicable. No conventional borrowings are reported in the supplied financial statements; year-end lease liabilities were approximately $12.3 million, including current and non-current portions. Cash runway, per management, was expected to extend into the third quarter of 2021.
Material changes versus 2019
- Net loss increased by $7.278 million, or 34%, as operating expenses rose 29%. R&D expense increased 48%, reflecting higher headcount, process development, and BCM research and consulting costs; peptide-vaccine trial expenses declined.
- Cash fell by $22.552 million. Operating cash use was broadly similar year over year, while investing outflows rose substantially, principally for the Houston manufacturing facility and laboratory equipment.
- Financing included approximately $6.2 million from Aspire Capital share purchases and $0.6 million from warrant exercises. Common shares outstanding increased from 45.7 million to 50.7 million.
- The company entered into new Houston research and manufacturing leases and a headquarters lease; year-end right-of-use assets were $10.8 million.
Outlook, management commentary, and risks
- Liquidity and going concern: Management said year-end cash was expected to fund operating and capital needs into Q3 2021, but stated that additional financing is necessary. The company has a history of losses, no significant recurring revenue source, and substantial doubt exists about its ability to continue as a going concern. Its funding estimate depends on assumptions that may prove wrong.
- MT-401 (zedenoleucel): FDA orphan drug designation was granted in April 2020 for AML following allogeneic stem-cell transplant. The FDA lifted a partial clinical hold in January 2021, allowing a Phase 2 safety lead-in of approximately six patients. Management expected to complete the lead-in in H1 2021 and proceed with the broader trial; these are forward-looking expectations, not reported outcomes.
- Clinical evidence: Company- and partner-reported early studies showed responses or disease control in some patients, and no observed cytokine release syndrome or neurotoxicity in the described T-cell trials as of December 2020. Results are from early, relatively small studies and may not predict later-stage outcomes.
- Manufacturing: The company reported completing construction and qualification of its Houston cGMP facility, with technology transfer and full operation expected in H1 2021. Until then, it remained reliant on BCM and third-party suppliers. Reagent changes and manufacturing comparability, capacity, quality, and scale-up remain important execution risks.
- Other programs: BCM was conducting trials in pancreatic and breast cancers, lymphoma, ALL, myeloma, and sarcoma. Marker was reviewing its peptide-vaccine programs and said it might de-emphasize or terminate some of them. It had suspended a Phase 2 TPIV200 ovarian cancer trial in 2019 after an interim review indicated the prespecified probability-of-benefit threshold was not met.
- COVID-19 and other risks: The pandemic had disrupted research and delayed clinical timelines; further enrollment, site, supply-chain, and financing effects were uncertain. Additional risks include dependence on BCM and key personnel, regulatory and clinical-trial uncertainty, competition, intellectual-property and licensing obligations, reimbursement uncertainty, and potential dilution from future financing. About 20.8 million warrants and 6.0 million options were outstanding at year-end.
- Contingency: A broker sought approximately $1.0 million in FINRA arbitration related to 2018 financing transactions. Marker said it had defenses and intended to contest the claims. The filing reported no other material legal proceedings.
Important facts for investors to verify
- Current cash, financing raised since year-end, and whether the company has extended its runway beyond the stated Q3 2021 estimate.
- Actual progress, enrollment, safety, manufacturing comparability, and timelines for the MT-401 Phase 2 trial.
- Whether the Houston manufacturing facility became operational and can reliably supply clinical trials at required quality and scale.
- Updated, sufficiently powered clinical results for MT-401 and partner-led programs, including trial endpoints and follow-up duration.
- Status and potential resolution of the approximately $1.0 million arbitration claim, as well as material license, milestone, royalty, and related-party obligations.
- Potential dilution from additional equity financing, Aspire Capital purchases, outstanding warrants, and options.