Marker Therapeutics, Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. Marker is a clinical-stage immuno-oncology company developing MultiTAA T-cell therapies and peptide-based vaccines. It reported no product revenue.
Financial highlights
| Metric | Q3 2021 / September 30, 2021 | Comparable period / prior year-end |
|---|---|---|
| Revenue | Zero for Q3; zero for the first nine months | Q3 2020: zero; first nine months 2020: $467,000 grant income |
| Operating expenses | Q3: $10.0 million; nine months: $29.7 million | Q3 2020: $7.4 million; nine months 2020: $20.8 million |
| Net loss | Q3: $12.4 million; nine months: $32.1 million | Q3 2020: $7.4 million; nine months 2020: $20.2 million |
| Loss per share, basic and diluted | Q3: $0.15; nine months: $0.43 | Q3 2020: $0.16; nine months 2020: $0.43 |
| Cash and cash equivalents | $48.7 million | $21.4 million at December 31, 2020 |
| Working capital | $43.2 million | $18.0 million at December 31, 2020 |
| Cash flows, nine months | Operating: $(22.4) million; investing: $(2.8) million; financing: $52.6 million | 2020: operating $(14.5) million; investing $(5.2) million; financing $2.7 million |
| Liabilities and debt | Total liabilities: $19.7 million, including approximately $12.0 million of operating lease liabilities | No borrowing debt is reported in the provided filing text |
No meaningful operating margin is presented because the company had no revenue in Q3 2021. The filing reports no product sales and expects no substantial revenue for at least several years.
Changes and notable items
- Q3 operating expenses rose 36% year over year; research and development increased 41%, principally due to AML trial spending, staffing, sponsored research, and manufacturing-facility costs. Nine-month operating expenses rose 43%, with R&D up 53%.
- Nine-month net loss increased 59%. The Q3 and nine-month 2021 results include a $2.4 million arbitration award charge.
- Cash increased mainly after a March 2021 public offering of 32.3 million shares, producing $52.6 million in net proceeds. Shares outstanding increased from 50.7 million at year-end 2020 to 83.1 million at September 30, 2021; 83.1 million were outstanding as of November 1.
- The Houston manufacturing facility became fully operational in July 2021. The company recorded $0.6 million in construction in progress for a second modular cleanroom during Q3.
Outlook, programs, and risks
- Management estimated September 30 cash would fund operating and capital requirements into the first quarter of 2023. This estimate excludes potential CPRIT grant proceeds, depends on assumptions that may prove incorrect, and could change with operations or development plans.
- Marker received notice of an approximately $13.1 million CPRIT award to support the adjuvant arm of its Phase 2 MT-401 trial in AML after stem-cell transplant; no award funds had been received by the filing date.
- The MT-401 Phase 2 trial safety lead-in was completed in June 2021 and the remainder began in July. Management planned to complete enrollment of approximately 20 patients and activate additional U.S. sites in Q4 2021, with active-disease-arm results expected in Q1 2022. Manufacturing for the trial was expected to begin at the company facility in Q4 2021.
- Management expects continued substantial losses and increased development costs, and anticipates needing additional capital. An available ATM program permits up to $75 million in share sales, but no shares had been sold under it by September 30. Future equity financing could dilute shareholders; debt or partnerships could impose other costs or restrictions.
- The company described early clinical findings in partner-led studies as encouraging and reported no cytokine release syndrome or neurotoxicity in those trials as of June 2021. These are preliminary observations, not proof of efficacy; clinical, regulatory, manufacturing, financing, and COVID-19-related uncertainties remain.
- A FINRA panel awarded a broker $2.4 million relating to alleged compensation for 2018 financing transactions. The company accrued the award and filed a motion to vacate it on October 22, 2021. Management said it was not party to other proceedings likely to have a material adverse effect.
Facts investors should verify
- Whether CPRIT funding is received, on what timetable, and whether it supports the expected trial costs.
- MT-401 Phase 2 enrollment, site activation, manufacturing progress, and timing and substance of trial results.
- Actual cash burn and whether the stated first-quarter 2023 runway remains achievable.
- Resolution and payment implications of the $2.4 million arbitration award and the motion to vacate.
- Any future ATM sales, additional financing, and resulting dilution or changes in outstanding shares.