On August 9, 2018 Molecular Templates, Inc. (Nasdaq:MTEM, "Molecular" or "Molecular Templates"), a clinical-stage oncology company focused on the discovery and development of the company’s proprietary engineered toxin bodies (ETBs), which are differentiated, targeted, biologic therapeutics for cancer, reported financial results for the second quarter of 2018 (Press release, Molecular Templates, AUG 9, 2018, View Source [SID1234528837]). As of June 30, 2018, Molecular’s cash and cash equivalents totaled $41.6 million. Molecular’s current cash balance is expected to fund operations into 4Q2019.

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"We have been very encouraged by the clinical results generated to date with MT-3724 in heavily-pretreated diffuse large B-cell lymphoma patients and we are excited to initiate multiple Phase II studies for this program by year-end, which will start yielding clinical results in 2019," said Eric Poma, Ph.D., Molecular Templates’ Chief Executive and Scientific Officer. "Furthermore, we expect to advance three new ETBs into clinical trials in the next twelve months."

Company Highlights and Upcoming Milestones

Corporate

At the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting in June 2018, interim results from a Phase I and Phase Ib extension study of MT-3724 (an ETB targeting CD20) in B-cell non-Hodgkin’s lymphoma (NHL) patients were presented. These results included a preliminary objective response rate in diffuse large B-cell lymphoma (DLBCL) patients with low serum Rituxan levels at study entry (N=10) of 30%, with a disease control rate of 70%, including two stable disease patients that had tumor reductions of 47% and 49%.
Also at the ASCO (Free ASCO Whitepaper) annual meeting in June 2018 was a poster presentation of the pharmacokinetic profile of evofosfamide in patients with advanced pancreatic cancer. The data presented showed that there was a significant reduction in drug exposure observed between the Phase II ("404") study and the Phase III ("MAESTRO") trials, which used a new ethanol-based formulation of evofosfamide. Molecular plans to explore potential partnership opportunities for further development of evofosfamide.
MT-3724

Molecular expects to initiate Phase II combination studies with MT-3724 in earlier lines of DLBCL in 2H18.
Molecular also expects to provide an update on the Phase Ib extension study in 4Q18 and to start a Phase II monotherapy study at the end of 2018 which has the potential to be a pivotal study.
MT-4019

MT-4019 (an ETB candidate designed to target CD38-expressing myeloma cancer cells) has completed IND enabling studies.
Takeda and Molecular are evaluating CD38 ETBs and could potentially select a drug candidate for development by the end of 3Q18. If the two companies do not select a joint candidate for development, Molecular anticipates filing an IND application for MT-4019 in 3Q18 and initiating a Phase I clinical trial in 2H18.
Research

Molecular expects to file an IND application for an ETB targeting HER2 in 1Q19.
Molecular expects to file an IND application for an ETB targeting PD-L1 (with antigen seeding) in 3Q19.
Several other ETB candidates are in pre-clinical development, targeting both solid and hematological cancers.
Takeda Multi-Target Collaboration

In December 2017, Takeda selected two targets for further research using Molecular’s ETBs. This triggered $4.0 million in milestone payments, which were paid by Takeda in 2Q18.
Financial Results

The net loss attributable to common shareholders for the second quarter of 2018 was $9.7 million, or $0.36 per basic and diluted share. This compares with a net loss attributable to common shareholders of $4.5 million, or $20.76 per basic and diluted share, for the same period in 2017.

Revenues for the second quarter of 2018 were $1.4 million, compared to $42,000 for the same period in 2017. Revenues for the second quarter of 2018 were comprised of grant revenue from the Cancer Prevention & Research Institute of Texas, and revenues from collaborative research and development agreements. Total research and development expenses for the second quarter of 2018 were $7.7 million, compared with $1.2 million for the same period in 2017. Total general and administrative expenses for the second quarter of 2018 were $3.7 million, compared with $2.4 million for the same period in 2017.

The net loss attributable to common shareholders for the six months ended June 30, 2018 was $18.4 million, or $0.68 per basic and diluted share. This compares with a net loss attributable to common shareholders of $6.1 million, or $28.32 per basic and diluted share, for the same period in 2017.

Revenues for the six months ended June 30, 2018 were $1.8 million, compared to $1.9 million for the same period in 2017. Revenues for the six months ended June 30, 2018 were comprised of grant revenue from the Cancer Prevention & Research Institute of Texas, and revenues from collaborative research and development agreements. Total research and development expenses for the six months ended June 30, 2018 were $14.4 million, compared with $2.3 million for the same period in 2017. Total general and administrative expenses for the six months ended June 30, 2018 were $6.6 million, compared with $4.2 million for the same period in 2017.