MiNK Therapeutics(INKT) - 2023 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The unaudited financial statements for the quarter ended March 31, 2023, show a decrease in cash and total assets compared to year-end 2022, with a net loss of $5.7 million, an improvement from the $7.8 million loss in the same period of 2022, while cash flow from operations remained negative and the accumulated deficit grew to $116.6 million Condensed Consolidated Balance Sheets As of March 31, 2023, the company's total assets were $16.6 million, a decrease from $21.5 million at the end of 2022, primarily due to a reduction in cash and cash equivalents, with total liabilities also decreasing to $11.3 million from $12.7 million, and the total stockholders' deficit increasing significantly to $4.5 million from $0.4 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $14,892 | $19,636 | | Total current assets | $15,522 | $20,405 | | Total assets | $16,589 | $21,472 | | Total current liabilities | $11,250 | $12,683 | | Due to related parties | $9,720 | $9,081 | | Total stockholders' deficit | $(4,476) | $(401) | Condensed Consolidated Statements of Operations and Comprehensive Loss For the three months ended March 31, 2023, the company reported a net loss of $5.7 million, or ($0.17) per share, compared to a net loss of $7.8 million, or ($0.23) per share, for the same period in 2022, with the reduced loss driven by lower research and development and general and administrative expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Research and development | $4,194 | $5,277 | | General and administrative | $1,661 | $2,097 | | Operating loss | $(5,854) | $(7,374) | | Net loss | $(5,686) | $(7,777) | | Basic and diluted net loss per common share | $(0.17) | $(0.23) | Condensed Consolidated Statements of Stockholders' Equity (Deficit) The company's total stockholders' deficit increased from $0.4 million at December 31, 2022, to $4.5 million at March 31, 2023, primarily due to the net loss of $5.7 million for the quarter, partially offset by stock-based compensation and other equity transactions - The total stockholders' deficit grew to $4,475,781 as of March 31, 2023, from a deficit of $401,303 at the end of 2022[13] - The main drivers for the change in equity were the net loss of $5.7 million and stock-based compensation expenses of $0.9 million[13][17] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $4.4 million for the first quarter of 2023, slightly higher than the $4.2 million used in the same period of 2022, with the company's cash and cash equivalents decreasing by $4.7 million during the quarter, ending at $14.9 million Cash Flow Highlights (in thousands) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,366) | $(4,196) | | Net cash used in investing activities | $(14) | $0 | | Net cash (used in) provided by financing activities | $(334) | $1 | | Net decrease in cash and cash equivalents | $(4,744) | $(4,200) | | Cash and cash equivalents, end of period | $14,892 | $34,688 | Notes to Unaudited Interim Condensed Consolidated Financial Statements Key notes highlight the company's business as a clinical-stage biopharmaceutical firm focused on iNKT cell therapies, with a history of losses and an accumulated deficit of $116.6 million, but believes its current cash of $14.9 million is sufficient for over a year, detailing significant related-party transactions with its parent company, Agenus, for services and IP, and a legal contingency involving a default judgment from the Walloon Region for approximately $2.3 million - The company is a clinical-stage biopharmaceutical company developing allogeneic, off-the-shelf, invariant natural killer T (iNKT) cell therapies for cancer and immune-mediated diseases[19] - As of March 31, 2023, the company had an accumulated deficit of $116.6 million. Management believes its cash balance of $14.9 million is sufficient to fund operations for more than one year[20] - The company has significant related-party transactions with its parent, Agenus, including an Intercompany Services Agreement and an IP License Agreement. As of March 31, 2023, $9.7 million was due to Agenus[37][38][41] - The company faces a default judgment from the Belgium Walloon Region seeking repayment of a ~$2.3 million advance. The outstanding liability is recorded in other current liabilities[30] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus on developing its iNKT cell therapy platform, led by its most advanced candidate, agenT-797, which has shown encouraging activity in solid tumors and viral ARDS, with operating expenses decreasing in Q1 2023 compared to Q1 2022 due to the timing of clinical trials, and the company ending the quarter with $14.9 million in cash, believing it has sufficient liquidity for more than one year, with potential future funding from partnerships, financing, or its parent company, Agenus - The lead product candidate, agenT-797, is an allogeneic, native iNKT cell therapy being evaluated in a Phase 1 trial for solid tumor cancers, with encouraging activity observed[50] - AgenT-797 also showed an encouraging survival benefit of 70% in a Phase 1 trial for viral acute respiratory distress syndrome (ARDS)[52] - The company is advancing a pipeline of engineered iNKT programs, including MiNK-215 (FAP-CAR-iNKT) and MiNK-413 (BCMA-CAR-iNKT), with IND-enabling activities underway in 2023[54] Operating Expense Comparison (in millions) | Expense Category | Q1 2023 | Q1 2022 | Change | | :--- | :--- | :--- | :--- | | Research & Development | $4.2 | $5.3 | -21% | | General & Administrative | $1.7 | $2.1 | -21% | - The company had a cash and cash equivalents balance of $14.9 million as of March 31, 2023, which is believed to be sufficient to satisfy liquidity requirements for more than one year[67] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not required for smaller reporting companies, and therefore no information is provided - As a smaller reporting company, MiNK Therapeutics is not required to provide this disclosure[77] Item 4. Controls and Procedures Management, including the Principal Executive Officer and Principal Financial Officer, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2023, with no material changes to the company's internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were effective as of the end of the period covered by the report[78] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[79] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reports that it is not a party to any material legal proceedings - The company is not currently involved in any material legal proceedings[82] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - No material changes have occurred to the risk factors described in the 2022 Form 10-K[83] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company details the use of proceeds from its October 2021 initial public offering, where net proceeds were approximately $39.8 million, and as of March 31, 2023, approximately $24.9 million of these proceeds have been used for the development of agenT-797, working capital, and other general corporate purposes - The company received net proceeds of approximately $39.8 million from its IPO in late 2021[86] - As of March 31, 2023, approximately $24.9 million of the net IPO proceeds have been used for development of agenT-797 and general corporate purposes[87] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL data files Signatures The report is duly signed by Jennifer S. Buell, Ph.D., President and Chief Executive Officer, and Christine M. Klaskin, Treasurer, on May 11, 2023