On November 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 third quarter of 2019 (Press release, Molecular Templates, NOV 12, 2019, View Source [SID1234551035]). As of September 30, 2019, MTEM’s cash and investments totaled $51.4 million, and is expected to fund operations through 2020.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"So far in 2019, we have reported Phase I/Ib data for MT-3724, started three Phase II studies for MT-3724, initiated a Phase I study for MT-5111, and our partner Takeda is initiating a Phase I study for TAK-169," said Eric Poma, Ph.D., Molecular Templates’ Chief Executive and Scientific Officer. "We expect to provide study updates on the three ongoing MT-3724 Phase II studies and the MT-5111 Phase I study by the end of the year and continue to advance our pipeline of both clinical and preclinical stage programs into 2020."

Company Highlights and Upcoming Milestones

TAK-169 (CD38-targted ETB)

Takeda and MTEM announced the acceptance of the IND for TAK-169 in 2Q19. Dosing in the Phase I trial is expected to start in 4Q19.
MT-3724 (CD20-targeted ETB)

Results of the Phase I/Ib study are scheduled to be presented at the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting, December 7-10, 2019 in Orlando, Florida.
MTEM is conducting a Phase II monotherapy study of MT-3724 in relapsed/refractory diffuse large B-cell lymphoma (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, or GemOx) 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 (HER2-targeted ETB)

Dosing began in 4Q19 for the ongoing Phase I study of MT-5111 in patients with HER2 positive solid tumors. MTEM expects to report an update on this study in 4Q19.
A presentation titled "MT-5111, a novel HER2 targeting engineered toxin body, under clinical development to overcome mechanisms of resistance to existing HER2 targeted therapies" will be delivered on December 11, 2019, at the San Antonio Breast Cancer Symposium (SABCS) in San Antonio, Texas.
Research

MTEM expects to start a Phase I study for MT-6035, its ETB targeting PD-L1 (with antigen seeding), in 2020.
A presentation titled "In vivo efficacy of a PD-L1 targeted Engineered Toxin Body (ETB) comprised of direct cytotoxicity and T-cell mediated tumor targeting" was delivered on November 9, 2019 at The Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting in National Harbor, Maryland.
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.
Investor Activities

MTEM will be hosting an Analyst & Investor Breakfast on Friday November 15, 2019, from 8:00am to 10:00am ET in New York City. A webcast will be available on the MTEM website.
Financial Results

The net loss attributable to common shareholders for the third quarter of 2019 was $38.2 million, or $1.03 per basic and diluted share. This compares with a net loss attributable to common shareholders of $5.2 million, or $0.19 per basic and diluted share, for the same period in 2018.

Revenues for the third quarter of 2019 were $3.6 million, compared to $6.8 million for the same period in 2018. Revenues for the third 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 third quarter of 2019 were $15.2 million, compared with $8.3 million for the same period in 2018. Total general and administrative expenses for the third quarter of 2019 were $4.5 million, compared with $3.5 million for the same period in 2018. In the third quarter, there was also a non-cash impairment charge of $22.1 million relating to the Company’s legacy program, Evofosfamide. Specifically, loss on impairment of in-process research and development for the third quarter of 2019 was $22.1 million, compared to no loss on impairment of in-process research and development for the same period in 2018. The impairment charge related entirely to this legacy program, which the Company acquired from Threshold Pharmaceuticals in 2017, and is unrelated to the Company’s current ETB technology and related pipeline programs.