Marker Therapeutics, Inc. — Q1 2021 Form 10-Q
Business context and reporting period. This unaudited quarterly report covers the three months ended March 31, 2021, with comparisons to Q1 2020. Marker is a clinical-stage immuno-oncology company developing MultiTAA-specific T-cell therapies and peptide-based vaccines. It reported no product revenue and remains dependent on external financing.
Financial performance and liquidity
| Metric | Q1 2021 | Q1 2020 or prior balance-sheet date |
|---|---|---|
| Revenue | No product revenue | No product revenue |
| Research and development expense | $5.64 million | $3.82 million |
| General and administrative expense | $3.14 million | $2.83 million |
| Total operating expenses | $8.78 million | $6.64 million |
| Net loss | $8.78 million | $6.49 million |
| Basic and diluted loss per share | $0.16 | $0.14 |
| Cash and cash equivalents | $64.51 million | $21.35 million at December 31, 2020 |
| Working capital | $63.32 million | $18.01 million at December 31, 2020 |
| Operating cash used | $9.06 million | $4.10 million |
| Investing cash used | $0.44 million | $0.10 million |
| Financing cash provided | $52.66 million | $0.55 million |
There are no product gross margins to report. The company reported total liabilities of $15.87 million, including approximately $12.19 million of operating lease liabilities; the filing reports no borrowing debt. Cash and working capital rose substantially following a March public offering of 32.28 million shares, which generated approximately $52.6 million in net proceeds. Shares outstanding increased from 50.7 million at year-end to 83.0 million at March 31.
Material changes and management commentary
- Net loss increased 35% year over year, primarily reflecting expanded research and development, future clinical-trial activity, and growth in corporate infrastructure. R&D expense rose 48%, including higher personnel, sponsored research, rent and utilities, and manufacturing-facility depreciation.
- Operating cash use more than doubled year over year, while financing cash inflow was driven by the public offering.
- Management expects the March 31 cash balance to fund operating expenses and capital requirements into the first quarter of 2023. This estimate depends on assumptions that may prove incorrect, and the company may need funding sooner.
- The Houston manufacturing facility entered service in January 2021; $6.8 million of construction in progress was transferred to equipment and leasehold improvements. The company received a $1.0 million landlord reimbursement in April 2021.
Outlook, development programs, and risks
- Management expects substantial losses to continue for several years and anticipates increasing expenses as research and clinical development advance. The company does not expect substantial revenue for at least the next several years.
- Marker reported submitting an IND for MT-401 (zedenoleucel), a MultiTAA T-cell therapy for post-transplant AML, and planned a Phase 2 trial with adjuvant and active-disease arms. At the time of the filing, management expected to complete the safety lead-in in the first half of 2021, begin the remainder of the trial in Q3 2021, complete enrollment of 20 patients in that phase in Q4 2021, and report active-disease-arm results in Q1 2022. Manufacturing for the trial was expected to begin at the company’s facility in Q3 2021.
- Other MultiTAA programs were being evaluated in partner-led trials for pancreatic and breast cancer, ALL, lymphoma, multiple myeloma, and sarcoma. Management cited encouraging partner-study observations but these remain clinical findings, not evidence of approved or commercial products.
- Management said it did not expect a material long-term liquidity impact from COVID-19 based on its current assessment, while noting uncertainty around effects on operations, clinical programs, capital markets, and stock value.
- A broker sought approximately $1.0 million in FINRA arbitration related to compensation claimed for 2018 financing transactions. The company said it believes it has defenses and intends to defend the matter. It stated there were no legal proceedings believed likely to have a material adverse effect and no material changes to previously disclosed risk factors.
- Disclosure controls and procedures were assessed as effective; the company reported no material change in internal control over financial reporting during the quarter.
Key facts for investors to verify
- Whether the projected cash runway into Q1 2023 remains achievable as trial plans, spending, and capital needs evolve.
- Progress against MT-401 trial and manufacturing milestones, and whether enrollment and result timelines changed after the filing.
- Clinical evidence and safety outcomes across company-sponsored and partner-led studies, including the distinction between interim observations and established efficacy.
- The operating cash-burn trend, R&D spending, and potential need for additional financing, including dilution or financing terms.
- Resolution and potential financial exposure of the approximately $1.0 million broker arbitration claim.