Marker Therapeutics(US:MRKR)2023-03-22 12:00Part I Business Marker Therapeutics, Inc. is a clinical-stage immuno-oncology company developing non-engineered, multi-tumor associated antigen (multiTAA)-specific T cell therapies for hematological malignancies and solid tumors - The company's core technology is a multiTAA-specific T cell platform that manufactures non-engineered, tumor-specific T cells designed to recognize and kill cancer cells by targeting multiple tumor-associated antigens (TAAs)19 - Key advantages of the multiTAA platform include targeting multiple antigens to minimize tumor escape, inducing a broader immune response, a strong clinical safety profile with no reported CRS, and a less complex, lower-cost manufacturing process compared to CAR-T therapies22 Clinical Pipeline Overview | Product Candidate | Indication | Phase | Sponsor | |---|---|---|---| | MT-401 (zedenoleucel) | Post-Transplant AML (Adjuvant & Active Disease) | Phase 2 (ARTEMIS) | Company | | MT-401-OTS | AML/MDS | Phase 2 (IND Cleared) | Company | | MT-601 | Pancreatic Cancer (in combination with chemo) | Phase 1 (PANACEA) | Company | | MT-601 | Relapsed/Refractory Non-Hodgkin Lymphoma | Phase 1 (APOLLO) | Company | | multiTAA-T | Pancreatic Cancer | Phase 1/2 | BCM | | multiTAA-T | Lymphoma | Phase 1 | BCM | | multiTAA-T | Multiple Myeloma | Phase 1b/2a | BCM | | multiTAA-T | Acute Lymphoblastic Leukemia (ALL) | Phase 1 | BCM | | multiTAA-T | Breast Cancer | Phase 2 | BCM | - The company has developed an improved T cell manufacturing process that reduces production time from over 30 days to 9 days, yielding a product with five times the measurable specificity and four times the potency3247 - The company operates its own fully validated, FDA-registered cGMP manufacturing facility in Houston, Texas, reducing reliance on contract manufacturing organizations (CMOs)26103104 - The company holds a worldwide, exclusive license from Baylor College of Medicine (BCM) for the multiTAA-specific T cell technology, including up to $64.85 million in milestone payments and tiered royalties from 0.65% to 5.0% on net sales111112 Risk Factors The company faces significant risks related to its financial position, clinical development, and reliance on third parties - The company has a history of operating losses and expects them to continue, which raises substantial doubt about its ability to continue as a going concern, with cash reserves expected to fund operations only into the third quarter of 2023183185186 - All product candidates are in clinical development, facing a high risk of failure, with no guarantee of successful trial completion, regulatory approval, or commercialization190191 - The company's strategic relationship with Baylor College of Medicine (BCM) is critical, as the multiTAA-specific T cell therapy was developed through this collaboration, and most intellectual property is exclusively licensed from BCM236237238 - Manufacturing of cell therapies is complex and costly, with risks related to scaling up production, equipment failures, and reliance on a limited number of vendors for specialized equipment and materials like the G-Rex® device220225228 - The biotechnology industry is highly competitive, with Marker Therapeutics competing against larger, well-funded pharmaceutical and biotech companies that have greater resources and experience in development and commercialization258259 - The business is subject to extensive and costly government regulation by the FDA and other authorities, with a lengthy and unpredictable regulatory approval process and no precedent for successful commercialization of multiTAA-specific T cell therapies312313314 Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - None375 Properties Marker Therapeutics leases a manufacturing facility and principal business office in Houston, Texas, under a ten-year agreement expiring in November 2030, and a separate research facility under a 71-month lease - The company leases its principal business office and manufacturing facility in Houston, TX, with the lease set to expire in November 2030376 - A separate research facility in Houston, TX is leased for a term of 71 months, which commenced in April 2020377 Legal Proceedings The company was involved in a FINRA arbitration proceeding regarding compensation for 2018 financing transactions, resulting in a total payment of $2.6 million - A FINRA arbitration panel awarded a broker $2.4 million for compensation, interest, and attorney fees related to 2018 financing transactions, with the company's motion to vacate the award denied380 - The company paid the $2.5 million judgment (including interest) in March 2022 and an additional $0.1 million in post-judgment interest in January 2023, resolving the matter380 Mine Safety Disclosure This item is not applicable to the company - Not Applicable381 Part II Market For Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities The company's common stock is traded on the Nasdaq Capital Market under "MRKR", and it has never paid cash dividends due to recurring losses - The company's common stock is listed on the Nasdaq Capital Market under the symbol "MRKR"383 - No dividends have been declared or paid, and the company does not anticipate paying cash dividends in the foreseeable future384 Management's Discussion And Analysis Of Financial Condition And Results Of Operations For FY2022, Marker Therapeutics reported $9.0 million in revenue, a net loss of $29.9 million, and a cash position of $11.8 million, raising substantial doubt about its going concern ability Results of Operations (2022 vs. 2021) | | For the Year Ended December 31, | Change | % Change | |---|---|---|---|---| | | 2022 | 2021 | ($) | (%) | | Total revenues | $9,014,000 | $1,242,000 | $7,772,000 | 626% | | Grant income | $3,514,000 | $1,242,000 | $2,272,000 | 183% | | Related party service revenue | $5,500,000 | $— | $5,500,000 | 100% | | Total operating expenses | $38,959,000 | $40,720,000 | ($1,761,000) | (4)% | | Research and development | $26,139,000 | $27,795,000 | ($1,656,000) | (6)% | | General and administrative | $12,820,000 | $12,925,000 | ($105,000) | (1)% | | Loss from operations | ($29,946,000) | ($39,478,000) | $9,532,000 | (24)% | | Net loss | ($29,931,000) | ($41,879,000) | $11,948,000 | (29)% | | Net loss per share | ($3.58) | ($5.47) | $1.89 | (35)% | - The company's cash, cash equivalents, and restricted cash decreased from $43.5 million at year-end 2021 to $11.8 million at year-end 2022419 - Management states that existing cash will only fund operations into the third quarter of 2023, which raises substantial doubt about the company's ability to continue as a going concern434442 - In December 2022, the company entered into a purchase agreement with Lincoln Park Capital Fund for the right to sell up to $25.0 million of its common stock over a 24-month period440 - A one-for-ten reverse stock split was effected on January 26, 2023, and all share and per-share data in the report have been retroactively adjusted392393 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Marker Therapeutics is not required to provide the information for this item - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide this information464 Financial Statements and Supplementary Data This section contains the company's audited consolidated financial statements for FY2022 and FY2021, including the independent auditor's report and accompanying notes Report of Independent Registered Public Accounting Firm The independent auditor issued an unqualified opinion on the financial statements, highlighting substantial doubt about the company's ability to continue as a going concern - The auditor's report contains an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern515 - A critical audit matter identified was the determination of impairment indicators for long-lived assets and right-of-use assets, which involved significant management judgment519521 Consolidated Financial Statements The consolidated financial statements detail the company's financial position and performance, showing a decrease in total assets and a net loss for 2022 Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2022 | Dec 31, 2021 | |---|---|---| | Cash and cash equivalents | $11,782 | $42,351 | | Total Current Assets | $16,619 | $45,982 | | Total Assets | $34,422 | $68,135 | | Total Current Liabilities | $7,782 | $12,902 | | Total Liabilities | $14,821 | $24,150 | | Total Stockholders' Equity | $19,601 | $43,986 | Consolidated Cash Flow Data (in thousands) | | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | |---|---|---| | Net cash used in operating activities | $(26,972) | $(27,280) | | Net cash used in investing activities | $(4,945) | $(3,131) | | Net cash provided by financing activities | $202 | $52,556 | | Net (decrease) increase in cash | $(31,715) | $22,145 | Notes to Consolidated Financial Statements The notes provide detailed information on the reverse stock split, going concern uncertainty, related party transactions, grant income, and net operating loss carryforwards - A one-for-ten reverse stock split was effected on January 26, 2023, with all share and per-share data retrospectively adjusted535 - The company entered into a services agreement with Wilson Wolf, a related party, receiving an $8.0 million cash payment for training and research services, with $5.5 million recognized as revenue for 2022542594599 - The company is recognizing revenue from a $13.1 million CPRIT grant and a $2.0 million FDA Orphan Products Grant to support its Phase 2 trial of MT-401539543 - As of December 31, 2022, the company had approximately $135.2 million of federal and $38.5 million of state net operating loss (NOL) carryforwards, though their use may be limited under Section 382634 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its principal independent accountants - The company had no changes in, or disagreements with, its principal independent accountants466 Controls and Procedures Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2022 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022468 - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2022469 Other Information The company reports no other information for this item - None475 Part III Directors, Executive Officers and Corporate Governance Information for this item is incorporated by reference from the company's 2023 Annual Meeting of Stockholders proxy statement - Information is incorporated by reference from the registrant's definitive proxy statement for the 2023 Annual Meeting of Stockholders479 Executive Compensation Information for this item is incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the registrant's definitive proxy statement481 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information for this item is incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the registrant's definitive proxy statement482 Certain Relationships and Related Transactions, and Director Independence Information for this item is incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the registrant's definitive proxy statement484 Principal Accounting Fees and Services Information for this item is incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the registrant's definitive proxy statement485 Part IV Exhibits, Financial Statement Schedules This section lists the exhibits filed as part of the Form 10-K, including corporate governance documents, material contracts, and required certifications - This section contains the index of all exhibits filed with the Form 10-K489 Form 10-K Summary The company did not provide a summary for this item - None500