Compass Therapeutics(CMPX) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2022 For Q1 2022, the company reported a net loss of $7.2 million, a slight improvement from a $7.4 million loss in Q1 2021 Total assets decreased to $146.6 million from $153.8 million at year-end 2021, primarily due to a decrease in cash and cash equivalents to $136.4 million Net cash used in operating activities was $7.9 million Condensed Consolidated Balance Sheets (Unaudited) The balance sheet as of March 31, 2022, shows total assets of $146.6 million, a decrease from $153.8 million at the end of 2021 This was driven by a reduction in cash and cash equivalents from $144.5 million to $136.4 million Total liabilities decreased from $13.7 million to $12.1 million, and total stockholders' equity declined to $134.5 million | | March 31, 2022 (unaudited) | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $136,379 | $144,514 | | Total current assets | $140,283 | $147,105 | | Total assets | $146,564 | $153,757 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $9,334 | $10,631 | | Total liabilities | $12,074 | $13,679 | | Total stockholders' equity | $134,490 | $140,078 | | Total liabilities and stockholders' equity | $146,564 | $153,757 | Condensed Consolidated Statements of Operations (Unaudited) For the first quarter of 2022, the company reported a net loss of $7.2 million, or ($0.07) per share, compared to a net loss of $7.4 million, or ($0.14) per share, for the same period in 2021 Total operating expenses were slightly lower at $7.2 million versus $7.3 million in the prior-year quarter, mainly due to a small decrease in research and development costs | (In thousands, except per share data) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $4,415 | $4,704 | | General and administrative | $2,767 | $2,635 | | Total operating expenses | $7,182 | $7,339 | | Loss from operations | ($7,182) | ($7,339) | | Net loss | ($7,162) | ($7,422) | | Net loss per share - basic and diluted | ($0.07) | ($0.14) | | Basic and diluted weighted average shares outstanding | 100,858 | 51,313 | Condensed Consolidated Statements of Stockholders' Equity (Unaudited) Stockholders' equity decreased from $140.1 million at December 31, 2021, to $134.5 million at March 31, 2022 The decrease was primarily driven by the net loss of $7.2 million for the quarter, partially offset by $1.6 million in stock-based compensation - The change in stockholders' equity during Q1 2022 was primarily influenced by the net loss of $7,162 thousand, which was partially offset by stock-based compensation of $1,574 thousand[12] Condensed Consolidated Statements of Cash Flows (Unaudited) For the first quarter of 2022, net cash used in operating activities was $7.9 million, an increase from $5.6 million in the prior-year period Cash used in investing activities was minimal at $0.2 million, and there were no financing activities The company's cash and cash equivalents decreased by $8.1 million during the quarter | (In thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($7,942) | ($5,605) | | Net cash used in investing activities | ($193) | ($13) | | Net cash used in financing activities | — | ($1,875) | | Net change in cash, cash equivalents and restricted cash | ($8,135) | ($7,493) | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's business as a clinical-stage oncology biopharmaceutical firm and confirm its liquidity position As of March 31, 2022, the company had $136.4 million in cash and cash equivalents, which management expects will fund operations into the second half of 2024 Significant commitments include a $6.0 million milestone payment to ABL Bio related to the CTX-009 clinical trial and future payments under collaboration agreements - The company is a clinical-stage, oncology-focused biopharmaceutical company developing proprietary antibody-based therapeutics, focusing on the relationship between angiogenesis and the immune system[17] - As of March 31, 2022, the company had cash and cash equivalents of $136.4 million, which is expected to fund operating expenses and capital expenditure requirements into the second half of 2024[21] - The company has accrued a $6.0 million milestone payment to ABL Bio for the completion of Phase 1 of the clinical trial for CTX-009[30][36] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's clinical pipeline progress, financial results, and liquidity Key updates were provided for CTX-009, which showed a promising 42% preliminary overall response rate in a Phase 2 trial for biliary tract cancer The company's net loss for Q1 2022 was $7.2 million, slightly down from $7.4 million in Q1 2021 With $136 million in cash, the company projects a cash runway into the second half of 2024 Business Overview and Pipeline Update The company highlights its focus on developing antibody-based therapeutics for oncology The pipeline is led by two clinical-stage candidates, CTX-009 and CTX-471, and one preclinical candidate, CTX-8371 Interim data from the Phase 2 trial of CTX-009 in biliary tract cancer (BTC) showed a preliminary overall response rate (ORR) of 42% and a clinical benefit rate (CBR) of 92% The company plans to advance CTX-009 into a Phase 2/3 study and is targeting an IND submission for CTX-8371 in Q1 2023 - CTX-009 (DLL4/VEGF-A bispecific): Interim data from its Phase 2 clinical trial in Biliary Tract Cancer (BTC) as of April 14, 2022, showed a preliminary overall response rate (ORR) of 42% (10 partial responses out of 24 patients) and a clinical benefit rate (CBR) of 92%[66][67] - CTX-471 (CD137 agonist): The ongoing Phase 1b dose expansion study has enrolled 49 patients Among 38 evaluable patients, the preliminary ORR is 8% and the CBR is 58%[83] - CTX-8371 (PD-1/PD-L1 bispecific): Due to delays in GMP manufacturing, the company is now targeting an IND submission in the first quarter of 2023[86] Results of Operations This section compares financial results for Q1 2022 and Q1 2021 The net loss slightly decreased by $0.3 million to $7.2 million Research and development expenses decreased by $0.3 million (6%) due to lower manufacturing costs General and administrative expenses increased by $0.1 million (5%) | (In thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change | | :--- | :--- | :--- | :--- | | Research and development | $4,415 | $4,704 | ($289) | | General and administrative | $2,767 | $2,635 | $132 | | Total operating expenses | $7,182 | $7,339 | ($157) | | Net loss | ($7,162) | ($7,422) | $260 | - R&D expenses decreased by $0.3 million, or 6%, primarily due to a reduction in manufacturing expense[106] Liquidity and Capital Resources The company's operations have been funded primarily through $329.0 million in gross proceeds from equity sales As of March 31, 2022, cash and cash equivalents stood at $136 million Management believes these funds are sufficient to support operating expenses and capital needs into the second half of 2024 Future funding will be necessary to complete clinical development and for any potential commercialization - As of March 31, 2022, the company had cash and cash equivalents of $136 million[112] - Based on current plans, the company expects its existing cash resources will fund operating expenses and capital expenditure requirements into the second half of 2024[123] | (In thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Cash used in operating activities | ($7,942) | ($5,605) | | Cash used in investing activities | ($193) | ($13) | | Cash used in financing activities | — | ($1,875) | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company has omitted this section, stating it is not applicable as it qualifies as a smaller reporting company - This disclosure is not applicable as the company is a smaller reporting company[126] Item 4. Controls and Procedures Management, including the Chief Executive Officer and Chief Operating Officer, evaluated the company's disclosure controls and procedures and concluded that they were effective as of March 31, 2022 There were no material changes to the company's internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2022, the Chief Executive Officer and Chief Operating Officer concluded that the company's disclosure controls and procedures were effective[128] - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, internal controls[129] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reports that it is not currently involved in any material legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[132] Item 1A. Risk Factors This section directs readers to the detailed discussion of risk factors in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - The report refers to the risk factors previously disclosed in Part I, Item 1A of the company's Annual Report on Form 10-K for the year ended December 31, 2021[133] Other Items (2, 3, 4, 5, 6) This section covers several standard disclosure items The company reports no unregistered sales of equity securities or defaults on senior securities Mine safety disclosures are not applicable Under 'Other Information,' the company notes the furnishing of a press release for its Q1 2022 financial results The final item lists the exhibits filed with the report - There were no unregistered sales of equity securities or defaults upon senior securities during the period[135][137] - A press release announcing financial results for the quarter ended March 31, 2022, was issued on May 9, 2022, and attached as Exhibit 99.1[138]