On August 12, 2019 Molecular Templates, Inc. (Nasdaq: MTEM, "Molecular," "Molecular Templates" or "MTEM"), a clinical-stage biopharmaceutical 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 2019. As of June 30, 2019, MTEM’s cash and investments totaled $72.3 million, and is expected to fund operations into the first half of 2021 (Press release, Molecular Templates, AUG 12, 2019, View Source [SID1234538626]).

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"Updated data from our Phase I/Ib study of MT-3724 in DLBCL continue to show promising activity in heavily pretreated patients. In our three ongoing Phase II studies with MT-3724, we hope to replicate the monotherapy activity in a larger patient population as well as show the utility and safety of combination dosing in the separate chemotherapy and Revlimid combination studies," said Eric Poma, Ph.D., Molecular Templates’ Chief Executive and Scientific Officer. "Investigational New Drug Applications (INDs) have been accepted for both MT-5111 (HER2 targeted ETB) and TAK-169 (CD38 ETB) with Phase I dosing expected to begin soon for both programs. We look forward to providing study updates on the three ongoing MT-3724 Phase II studies and the MT-5111 Phase I study by the end of the year."

Company Highlights and Upcoming Milestones

TAK-169

Takeda and MTEM announced the acceptance of the IND for TAK-169 (CD38 targeted ETB) in June 2019. Dosing in the trial is expected to start in 2H19.
As presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) annual meeting in April 2019, TAK-169 is more potent than MT-3724 (our CD20 targeted ETB) and was also well tolerated at much higher doses than was MT-3724 in non-human primates.
The starting dose for the dose escalation for TAK-169 is 50 mcg/kg, which is the MTD for MT-3724. The protocol includes once weekly and once every two-week dosing schedules.
MT-3724

The Phase I/Ib monotherapy study of MT-3724 completed enrollment in 1Q19. Final data from this study are expected to be presented at a medical conference. A total of 27 patients were treated in this study across a range of doses (5 mcg/kg-100mcg/kg); 50 mcg/kg was identified as the maximum tolerated dose (MTD).
Thirteen of these patients with diffuse large B-cell lymphoma (DLBCL) were relapsed/refractory DLBCL patients (including transformed and composite histology), with assay-negative levels of serum rituximab.
Results for these thirteen patients were:
Five patients had responses (1 complete response, 1 complete metabolic response, 3 partial responses) for a 38% response rate. The median number of prior therapies in the responders was 3; four of the responders were primary R-CHOP refractory.
Three patients had stable disease (including two patients with 49% and 47% tumor reductions).
Five patients had progressive disease.
Five of these thirteen patients were treated at the MTD of 50 mcg/kg. Three of these five patients responded (1 CR, 2 PRs).
The patient with a CR has left the study for personal reasons after 5 cycles while still in a complete response.
One of the other patients with a PR remains in response and is currently in their 9th cycle of dosing.
The remaining patient, who had heterogeneous CD20 status at enrollment, had a partial response and then progressed after approximately 5 cycles.
The 50 mcg/kg dose has been generally well-tolerated; no life-threatening toxicities have been observed at any dose of MT-3724.
MTEM is conducting a Phase II monotherapy study of MT-3724 in relapsed/refractory DLBCL. This study has the potential to serve as a registration study. MTEM expects to provide an update on this study in 4Q19.
MTEM is also conducting two Phase II studies in earlier lines of DLBCL; one with MT-3724 in combination chemotherapy (gemcitabine and oxaliplatin) and the other with MT-3724 in combination with Revlimid. The Company expects to report an update on both MT-3724 combination studies in 4Q19.
MT-5111

MTEM announced the acceptance of its IND filing for MT-5111, its ETB targeting HER2, in April 2019. The Phase I study in patients with HER2 positive solid tumors is expected to start dosing in 3Q19. MTEM expects to report an update on this study in 4Q19.
Research

MTEM expects to file an IND application for MT-6035, its ETB targeting PD-L1 (with antigen seeding), in 4Q19.
Several other ETB candidates are in preclinical development, targeting both solid and hematological cancers.
Takeda Multi-Target Collaboration

Takeda and MTEM are conducting lead optimization for ETBs against two undisclosed targets selected by Takeda under the collaboration. Should Takeda exercise its option to license ETBs for both targets, MTEM would receive $25.0 million and would be eligible to receive up to $547.0 million in milestone payments and tiered royalties on sales.
Financial Results

The net loss attributable to common shareholders for the second quarter of 2019 was $9.2 million, or $0.25 per basic and diluted share. This compares with a net loss attributable to common shareholders of $9.7 million, or $0.36 per basic and diluted share, for the same period in 2018.

Revenues for the second quarter of 2019 were $5.4 million, compared to $1.4 million for the same period in 2018. Revenues for the second quarter of 2019 were comprised of revenues from collaborative research and development agreements with Takeda, and grant revenue from CPRIT. Total research and development expenses for the second quarter of 2019 were $10.2 million, compared with $7.7 million for the same period in 2018. Total general and administrative expenses for the second quarter of 2019 were $4.6 million, compared with $3.7 million for the same period in 2018.