Mersana Therapeutics(MRSN) - 2023 Q2 - Quarterly Report

Financial Performance - For the six months ended June 30, 2023, the company reported a net loss of $110.5 million, compared to a net loss of $99.5 million for the same period in 2022, resulting in an accumulated deficit of $765.2 million as of June 30, 2023[160]. - Net loss for Q2 2023 was $54.31 million, compared to a net loss of $52.22 million in Q2 2022, reflecting a decrease of $2.09 million[178]. - Total research and development costs rose to $48.97 million in Q2 2023 from $41.23 million in Q2 2022, an increase of $7.74 million[178]. - General and administrative expenses increased by $3.38 million from $14.80 million in Q2 2022 to $18.18 million in Q2 2023, primarily due to higher employee compensation[182]. - Research and development expenses for the six months ended June 30, 2023, increased by $19.21 million to $96.24 million from $77.04 million in the same period of 2022[187]. - Collaboration revenue for the six months ended June 30, 2023, increased by $12.14 million to $18.46 million from $6.32 million in the same period of 2022[186]. - Collaboration revenue increased by $6.4 million from $4.3 million in Q2 2022 to $10.7 million in Q2 2023, driven by increases from the Janssen Agreement and Merck KGaA Agreement[179]. - Total other income (expense), net improved by $5.01 million from $(1.18) million in the six months ended June 30, 2022, to $3.83 million in the same period of 2023[191]. Research and Development - The company is winding down development activities related to UpRi after the Phase 2 UPLIFT trial did not meet its primary endpoint, which was an objective response rate (ORR) in the NaPi2b-positive population[153][154]. - The company is currently enrolling patients in a Phase 1 trial for XMT-1660, which has received Fast Track designation from the FDA for advanced or metastatic triple-negative breast cancer[155]. - XMT-2056, another ADC candidate, is currently on clinical hold due to a Grade 5 serious adverse event, and the company is working to address this hold with the FDA[156]. - The company has entered into a global collaboration with GSK for the co-development and commercialization of XMT-2056, providing GSK with an exclusive option[158]. - The company has established strategic collaborations with Janssen and Merck KGaA for the development of additional ADC product candidates[158]. - Significant external costs for research and development include $19.25 million for UpRi and $6.90 million for XMT-1660 in Q2 2023[172]. - The company expects to incur significant research and development expenses over the next several years for clinical development and manufacturing of XMT-1660 and other product candidates[174]. Cash Flow and Financing - As of June 30, 2023, the company had cash, cash equivalents, and marketable securities totaling $286.6 million[198]. - Net cash used in operating activities for the six months ended June 30, 2023, was $90.8 million, compared to $52.7 million for the same period in 2022[200]. - Net cash used in investing activities decreased significantly to $4.0 million in the first half of 2023 from $90.8 million in the same period of 2022[201]. - Net cash provided by financing activities was $94.7 million for the six months ended June 30, 2023, compared to $100.9 million in 2022[202]. - As of June 30, 2023, approximately $55.9 million remained unsold and available for sale under the November 2022 ATM equity offering program[195]. - The New Credit Facility has an outstanding balance of $25.0 million as of June 30, 2023, with interest rates sensitive to changes in the prime rate[212]. - The company believes its available funds will be sufficient to support its operating plan commitments into 2026[204]. Future Outlook - The company expects cash expenditures to increase due to ongoing research, development, and clinical trials for product candidates[203]. - The company anticipates significant commercialization expenses if marketing approval is obtained for any product candidates[203]. - Future capital requirements will depend on various factors, including the progress of drug discovery and clinical trials[205]. - The company has incurred significant cumulative operating losses since inception, with expectations to continue incurring significant expenses over the next several years[160]. - The company is eligible to earn milestone payments under collaboration agreements with GSK, Janssen, Merck KGaA, and Asana Biosciences, contingent on successful development activities[198].