On August 12, 2021 Molecular Templates, Inc. (Nasdaq: MTEM, "Molecular Templates," or "MTEM"), a clinical-stage biopharmaceutical company focused on the discovery and development of proprietary targeted biologic therapeutics, engineered toxin bodies (ETBs), reported financial results for the second quarter of 2021 (Press release, Molecular Templates, AUG 12, 2021, View Source [SID1234586453]).

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"We continue to make progress on advancing our wholly owned pipeline of next-generation ETBs and our existing partnerships. We reached an important milestone recently with initiation of clinical development of MT-6402 (targeting PD-L1 via dual mechanisms) which is the first of our third generation ETBs to enter the clinic," said Eric Poma, Ph.D., Molecular Templates’ Chief Executive and Scientific Officer. "With regard to TAK-169, we are now looking forward to continuing clinical development, having assumed full rights to this asset from Takeda. We expect the second half of 2021 to be busy, with clinical data anticipated on MT-5111, TAK-169, and MT-6402 as well as further progress on our earlier stage programs."

Company Highlights and Upcoming Milestones

Corporate

On August 4, 2021, MTEM assumed full rights to TAK-169 from its former co-development partner, Takeda, including full control of TAK-169 clinical development.
On April 5, 2021, MTEM announced the decision to discontinue development of MT-3724, MTEM’s only first-generation ETB. MTEM will focus on the clinical development of next-generation ETBs MT-5111, TAK-169, and MT-6402, as well as advancing next-generation preclinical ETB candidates against targets including CTLA-4, CD20, SLAMF-7, CD45, TROP2 and TIGIT.
MTEM had three presentations at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2021, which took place virtually from April 10-15, 2021:
MT-5111 (interim Phase 1 data as of December 2020), abstract CT130, titled "Phase 1 study of the novel immunotoxin MT-5111 in patients with HER-2+tumors."
MT-6402 (preclinical data), abstract 1628, titled "Engineered toxin bodies targeting PD-L1 to alter tumor immunophenotypes and deliver broad antigenic diversity and patient coverage."
CTLA-4 ETB (preclinical data), abstract 1627, titled "Preclinical characterization of a novel CTLA-4-targeted ETB for direct Treg depletion."
MTEM provided a corporate update and participated in 1-on-1 investor meetings at the Ladenburg Thalmann 2021 Healthcare Conference, which took place July 13-14, 2021.
MT-5111 (HER2 ETB)

The Phase 1 study of MT-5111 in HER2-positive cancers is ongoing with multiple sites open for enrollment. Details of the study were presented at AACR (Free AACR Whitepaper) in April.
The HER2-positive breast cancer expansion cohort is planned to begin in 3Q21 at a dose of 10 mcg/kg (anticipated to be a therapeutic dose level), pending adequate safety data. Dose escalation will continue to determine the recommended Phase 2 dose while the breast cancer expansion cohort collects efficacy and safety data.
Additional data from both the dose escalation portion of the study and the metastatic breast cancer dose expansion cohort are expected in 4Q21.
TAK-169 (CD38 ETB)

On August 4, 2021, MTEM assumed full rights to TAK-169 from its former co-development partner, Takeda, including full control of TAK-169 clinical development, per the terms of the terminated collaboration agreement with Takeda. MTEM will continue conducting the ongoing Phase 1 study for TAK-169 in relapsed/refractory multiple myeloma. This study, which started dosing in February 2020, had a temporary pause in the activation of new study sites and new patient enrollment (along with most of Takeda’s other early-stage studies) due to COVID-19 and was re-initiated in 4Q20.
As previously disclosed, Takeda had enrolled and treated four subjects in the Phase 1 study. Pharmacodynamic activity was noted in the subjects, all treated at the starting dose of 50 mcg/kg. Clearance of natural killer (NK) cells in peripheral blood was observed in all subjects with a maximal reduction of peripheral NK cells of 56%, 85%, 88%, and 92%, respectively, after the first dose. The subject with 56% reduction in NK cells exhibited a low percentage of CD38+ NK cells. These values appear comparable to the reported maximal peripheral NK clearance seen with CD38-targeting antibodies at receptor-saturating doses. The geometric mean of Cmax in these four subjects appears lower than the predicted EC50 observed in patient-derived ex vivo cell-kill assays but above in vitro EC50 values in multiple myeloma cell-lines.
MTEM expects to provide an update on the Phase 1 study in 4Q21.
MT-6402 (PD-L1 ETB with antigen seeding)

In July 2021, MTEM dosed its first subject in a Phase 1 study of MT-6402. MT-6402 is the first of MTEM’s 3rd generation ETBs to enter the clinic. MT-6402 was designed to induce potent anti-tumor effects via PD-L1 targeting through multiple mechanisms that may overcome the limitations of the PD-L1 antibodies.
The Phase 1 study is a multi-center, open-label, dose escalation and dose expansion trial in the United States. Patients with confirmed PD-L1 expressing tumors or confirmed PD-L1 expression in the tumor microenvironment will be eligible to screen for enrollment. The starting dose is 16 mcg/kg.
Following determination of the maximum tolerated dose (MTD) or recommended Phase 2 dose, expansion cohorts are planned to evaluate MT-6402 as a monotherapy in tumor-specific and tumor-agnostic cohorts.
MTEM expects to provide an update on the Phase 1 study in 4Q21.
Research

MTEM expects to initiate a Phase 1 study for an ETB targeting CTLA-4 in 2022.
Several other wholly owned ETB candidates are in preclinical development against targets including CD20, SLAMF-7, CD45, TROP2, and TIGIT.
In 2021, MTEM expects to present preclinical data on ETB candidates at medical and scientific conferences.
Financial Results

The net loss attributable to common shareholders for the second quarter of 2021 was $15.6 million, or $0.28 per basic and diluted share. This compares with a net loss attributable to common shareholders of $31.2 million, or $0.68 per basic and diluted share, for the same period in 2020.

Revenues for the second quarter of 2021 were $15.1 million, compared to $6.9 million for the same period in 2020. Revenues for the second quarter of 2021 were comprised of revenues from collaborative research and development agreements with Takeda, Vertex and Bristol Myers Squibb. Total research and development expenses for the second quarter of 2021 were $21.1 million, compared with $30.4 million for the same period in 2020. Total general and administrative expenses for the second quarter of 2021 were $8.9 million, compared with $6.4 million for the same period in 2020.

As of June 30, 2021, MTEM’s cash and investments totaled $200.7 million. MTEM’s current cash and investments are expected to fund operations into the second half of 2023.