Marker Therapeutics(MRKR) - 2021 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Marker Therapeutics, Inc. as of September 30, 2021, including the balance sheet, statements of operations, stockholders' equity, and cash flows, with notes on accounting policies, liquidity, financing, and legal contingencies Condensed Consolidated Balance Sheets The balance sheet as of September 30, 2021, reflects a substantial increase in total assets and stockholders' equity, primarily driven by a significant rise in cash and cash equivalents due to recent financing activities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $48,705 | $21,352 | | Total current assets | $51,407 | $24,411 | | Total assets | $71,940 | $45,615 | | Liabilities & Equity | | | | Total current liabilities | $8,227 | $6,402 | | Total liabilities | $19,658 | $18,270 | | Total stockholders' equity | $52,282 | $27,345 | Condensed Consolidated Statements of Operations For the three and nine months ended September 30, 2021, the company reported no revenue and a higher net loss due to significantly increased operating expenses, including R&D activities and an arbitration settlement Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $0 | $0 | $0 | $467 | | Research and development | $6,784 | $4,804 | $19,777 | $12,897 | | General and administrative | $3,239 | $2,573 | $9,936 | $7,947 | | Loss from operations | $(10,024) | $(7,376) | $(29,714) | $(20,377) | | Net loss | $(12,429) | $(7,372) | $(32,116) | $(20,199) | | Net loss per share | $(0.15) | $(0.16) | $(0.43) | $(0.43) | Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2021, net cash used in operating activities increased, while a significant inflow from financing activities, primarily from common stock issuance, resulted in a net increase in cash Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(22,422) | $(14,530) | | Net cash used in investing activities | $(2,781) | $(5,153) | | Net cash provided by financing activities | $52,556 | $2,736 | | Net increase (decrease) in cash | $27,353 | $(16,947) | Notes to Condensed Consolidated Financial Statements The notes detail the company's financial condition and accounting policies, including cash runway, recent financing activities, and a significant arbitration accrual - As of September 30, 2021, the Company had cash and cash equivalents of approximately $48.7 million, expected to fund operating expenses and capital expenditure requirements into the first quarter of 2023[18][23] - In March 2021, the company raised net proceeds of $52.6 million from an underwritten public offering of 32,282,857 shares of common stock[20][49] - In August 2021, the company entered into an At-The-Market (ATM) agreement to offer and sell up to $75.0 million of its common stock, with no shares sold to date under this agreement[19] - The company accrued $2.4 million related to a FINRA arbitration award for broker compensation from 2018 financing transactions, and filed a motion to vacate the award in October 2021[46] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's business as a clinical-stage immuno-oncology firm, highlighting the significant increase in operating expenses and net loss for 2021, alongside a strengthened liquidity position expected to fund operations into Q1 2023 Company Overview and Pipeline Marker Therapeutics is a clinical-stage immuno-oncology company developing T cell-based immunotherapies, with its lead product MT-401 in a Phase 2 clinical trial for AML, supported by an operational cGMP manufacturing facility - The company is advancing its lead product candidate, MT-401 (zedenoleucel), in a Phase 2 clinical trial for post-allogeneic HSCT patients with AML[69] - The company's cGMP manufacturing facility became fully operational in July 2021 and is expected to begin manufacturing MT-401 for the Phase 2 trial in Q4 2021[69] - The company's MultiTAA-specific T cell therapies have been generally well tolerated in clinical trials with no incidents of cytokine release syndrome or neurotoxicity[71] Results of Operations The company's net loss increased significantly for both the three and nine months ended September 30, 2021, primarily driven by higher Research and Development expenses for clinical trials and increased headcount, along with a one-time arbitration settlement loss Comparison of Operating Results (in thousands) | Metric | Q3 2021 | Q3 2020 | Change | Nine Months 2021 | Nine Months 2020 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | R&D Expenses | $6,785 | $4,804 | +41% | $19,778 | $12,897 | +53% | | G&A Expenses | $3,239 | $2,572 | +26% | $9,936 | $7,947 | +25% | | Net Loss | $(12,429) | $(7,371) | +69% | $(32,116) | $(20,199) | +59% | - The increase in R&D expenses was primarily driven by a $1.0 million increase in costs for the AML clinical trial and a $0.6 million increase in headcount-related expenses in Q3 2021[77] - A loss on settlement of $2.4 million was recorded in Q3 2021 related to a FINRA arbitration proceeding[74][80] Liquidity and Capital Resources The company's financial position significantly strengthened in 2021, with cash and cash equivalents increasing to $48.7 million due to a public offering, providing sufficient funds for operations into the first quarter of 2023 Liquidity Position (in thousands) | Metric | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $48,705 | $21,352 | | Working capital | $43,180 | $18,009 | - Net cash provided by financing activities was $52.6 million for the nine months ended September 30, 2021, primarily from an underwritten public offering[100][103] - The company received notice of a ~$13.1 million award from the Cancer Prevention and Research Institute of Texas (CPRIT) to support its Phase 2 clinical trial of MT-401, though no funds have been received to date[107] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is classified as a smaller reporting company and is not required to provide information for this item - As a smaller reporting company, Marker Therapeutics is not required to provide quantitative and qualitative disclosures about market risk[111] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[112] - No changes in internal controls over financial reporting occurred during the nine months ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, internal controls[115] PART II – OTHER INFORMATION Item 1. Legal Proceedings As of September 30, 2021, the company reports that it is not a party to any legal proceedings likely to have a material adverse effect on its business - The company states it was not a party to any legal proceedings that management believes are likely to have a material adverse effect on the business as of September 30, 2021[116] Item 1A. Risk Factors The company indicates that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 - There have been no material changes to the risk factors described in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020[117] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company did not issue or sell any unregistered securities during the nine months ended September 30, 2021 - The company did not record any issuances of unregistered securities during the nine months ended September 30, 2021[118] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the company's Certificate of Incorporation, Bylaws, CEO and CFO certifications, and interactive data files - The report includes a list of exhibits filed, notably the certifications by the Chief Executive Officer and Chief Financial Officer pursuant to SEC rules[123]