MIRATI THERAPEUTICS The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited financial statements
and related notes included in this Quarterly Report on Form 1O-Q and the audited
financial statements and notes thereto as of and for the year ended
References in the following discussion to "we," "our," "us," "Mirati" or "the
Company" refer to
Overview
Our clinical programs consist of two product candidates: MRTX849, a KRAS G12C inhibitor, and sitravatinib, a multi-kinase inhibitor. We have several early discovery programs, including a preclinical program for a KRAS G12D inhibitor.
KRAS Inhibitor Program
The RAS family of genes is the most commonly mutated oncogene and mutations in this gene family occur in up to approximately 25% of all human cancers. Among the RAS family members, mutations most frequently occur in KRAS (approximately 85% of all RAS family mutations). Tumors characterized by KRAS mutations are commonly associated with poor prognosis and resistance to therapy. Nonclinical studies have demonstrated that cancer cells exhibiting KRAS mutations are highly dependent on KRAS function for cell growth and survival. Historically, KRAS has been extremely difficult to directly inhibit due to the absence of a tractable small molecule drug binding site. Our KRAS inhibitor programs are focused on the discovery and development of small molecule compounds that target KRAS G12C and G12D. We intend to pursue development of our KRAS G12C inhibitor program in both single agent and rational combination approaches. We also have a KRAS G12D inhibitor program in preclinical development.
MRTX849
Background
MRTX849, our lead KRAS G12C compound, is an investigational, specific, potent and orally available small molecule. MRTX849 is designed to directly inhibit KRAS G12C mutations. KRAS G12C mutations are present in approximately 14%
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of non-small cell lung cancer ("NSCLC") adenocarcinoma patients, 4% of colorectal cancer ("CRC") patients, 2% of pancreatic cancer patients, as well as smaller percentages of several other difficult-to-treat cancers. Based on observed preclinical attributes, we believe MRTX849 has the potential to be a best-in-class product candidate for the suppression of G12C mutant KRAS signaling. Single agent treatment with MRTX849 has shown complete regression in a subset of KRAS G12C-positive human tumor models implanted in mice.
Program Update
We received
On
As of the data cut-off date of
• At the highest dose (600 mg BID), three of five evaluable patients with
NSCLC and one of two evaluable patients with CRC achieved a Partial
Response ("PR"), and the remaining patients experienced stable disease.
• Across all dose levels, three of six patients with NSCLC and one of four
patients with CRC achieved a PR. Two responding patients (one with NSCLC
and one with CRC) achieved confirmed PRs, both with continuing tumor
shrinkage following their first scan. The other two patients with PRs
(both NSCLC) remain on study but have not yet had confirmatory scans.
• Clinical PK data demonstrated that the dose of 600 mg BID results in drug
levels that meet or exceed those likely to lead to full inhibition of KRAS
G12C signaling.
• Treatment duration across all dose levels ranged from 6.7- 38.6 weeks for
patients with NSCLC and 9.9-30.1 weeks for patients with CRC as of the
data cut-off.
Treatment-related adverse events were primarily grade 1 events. One patient experienced a dose-limiting toxicity ("DLT") at the 1200 mg QD dose (capsule burden intolerance 12 capsules) and one patient experienced a DLT at the 600 mg BID dose (grade 3/4 isolated amylase/lipase increase). The maximum tolerated dose was not established and further dose escalation may be explored. Enrollment into dose expansion at the 600 mg BID dose is underway.
In
MRTX849 and KRAS G12D Discovery Collaboration with Pfizer Inc. ("Pfizer")
In
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optimization and development of small molecule compounds that bind and specifically inhibit KRAS G12D. Both agreements established an option mechanism which enabled the Company to elect an exclusive worldwide license under the technology for the development and commercialization of certain products based on such compounds.
Under the agreements, following the joint discovery periods which have
concluded, we executed our options to retain exclusive worldwide licenses to
develop, manufacture and commercialize inhibitors of KRAS G12C and KRAS G12D,
including but not limited to, MRTX849 and our KRAS G12D inhibitor program. Under
each agreement, Pfizer is entitled to potential development milestone payments
of up to
Sitravatinib
Sitravatinib is a spectrum-selective kinase inhibitor designed to potently inhibit receptor tyrosine kinases ("RTK"s), including TAM family receptors (TYRO3, Axl, Mer), split family receptors (VEGFR2, KIT) and RET. Sitravatinib is an investigational agent that is being evaluated in combination with immune checkpoint inhibitors.
Sitravatinib's potent inhibition of TAM and split family RTKs may overcome resistance to checkpoint inhibitor therapy through targeted reversal of an immunosuppressive tumor microenvironment, enhancing antigen-specific T cell response and expanding dendritic cell-dependent antigen presentation. As an immuno-oncology agent, sitravatinib is being evaluated in combination with nivolumab (OPDIVO®), Bristol-Myers Squibb Company's ("BMS") anti-PD-1 checkpoint inhibitor, in patients with NSCLC who have experienced documented disease progression following treatment with a checkpoint inhibitor. Sitravatinib is also being developed in certain Asian territories in collaboration with BeiGene, Ltd. ("BeiGene") which is evaluating sitravatinib in combination with tislelizumab, BeiGene's investigational anti-PD-1 checkpoint inhibitor, in a number of advanced solid tumors.
Sitravatinib in Combination with Nivolumab
In an ongoing Phase 2 clinical trial, we are evaluating sitravatinib in
combination with nivolumab in patients with NSCLC who have experienced
documented disease progression following prior treatment with a checkpoint
inhibitor. On
As of the data cutoff of
• preliminary median overall survival of 15.6 months for the PCB cohort (n=87);
• preliminary median overall survival of 18.1 months for the subset of PCB
patients who received the combination as either 2nd or 3rd line of therapy
after progressing on treatment with a checkpoint inhibitor (n=73), which
is a patient cohort consistent with the inclusion criteria for the ongoing
Phase 3 clinical trial; and
• the combination has been well-tolerated and most adverse events were Grade
1 or 2 and were similar to data presented previously.
We held an end of Phase 2 meeting with the FDA in the third quarter of 2018 with
respect to the development of sitravatinib in combination with a checkpoint
inhibitor in NSCLC. Based on feedback received from the FDA, we initiated in
In
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On
During the third quarter of 2018, we initiated an open label, multi-cohort Phase
2 clinical trial of sitravatinib in combination with nivolumab in patients with
advanced or metastatic urothelial carcinoma. On
• as of the data cut-off date ofOctober 17, 2019 , 22 patients were evaluable for response with at least one radiographic scan; • 6 of 22 evaluable patients achieved a confirmed CR (1 patient) or PR (5 patients);
• 21 of 22 evaluable patients achieved a confirmed CR, PR, or stable disease;
• 4 responding patients had been treated for more than 6 months; and
• the combination was well-tolerated and most adverse events were Grade 1 or 2.
During the third quarter of 2018, we also initiated an open label Phase 2 clinical trial to assess the mechanism of action of sitravatinib combined with nivolumab in patients with advanced clear cell renal cell cancer ("RCC").
In
In
Critical Accounting Policies and Significant Judgments and Estimates
Our discussion and analysis of financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with
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Results of Operations
Comparison of the Three Months Ended
Three months ended
March 31, Increase
2020 2019 (Decrease)
License and collaboration revenues
Research and development expenses
2,832 1,846 986
Revenues
License and collaboration revenues relate to the BeiGene Agreement under which
BeiGene was granted an exclusive license to develop, manufacture and
commercialize sitravatinib in the Licensed Territory. License and collaboration
revenues for the three months ended
Research and development expenses
Research and development expenses consist primarily of:
• salaries and related expenses for personnel, including expenses
related to stock options or other share-based compensation granted
to personnel in research and development functions;
• fees paid to external service providers such as Clinical Research
Organizations ("CROs") and contract manufacturing organizations
related to clinical trials, including contractual obligations for
clinical development, clinical sites, manufacturing and scale-up,
and formulation of clinical drug supplies;
• fees paid to contract services related to drug discovery efforts
including chemistry and biology services;
• license fees paid in connection with our early discovery efforts; and
• costs for allocated facilities and depreciation of equipment.
We record research and development expenses as incurred.
Our research and development efforts during the three months ended
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Three months ended March 31, Increase
2020 2019 (Decrease)
Third-party research and development expenses:
Clinical development programs:
MRTX849 25,090 4,622 20,468
Sitravatinib 15,610 13,729 1,881
Discontinued programs 497 1,089 (592 )
Pre-clinical development programs:
KRAS inhibitors 5,508 4,438 1,070
Preclinical and early discovery 3,600 787 2,813
Total third-party research and development expenses 50,305 24,665 25,640 Salaries and other employee related expense
7,242 3,816 3,426
Share-based compensation expense 11,848 5,157 6,691
Other research and development costs 2,313 602 1,711
Research and development expense $ 71,708 $ 34,240 $ 37,468 Research and development expenses for the three months ended
At this time, due to the risks inherent in the clinical development process and the early stage of our product development programs we are unable to estimate with any certainty the costs we will incur in the continued development of sitravatinib and MRTX849. The process of conducting clinical trials necessary to obtain regulatory approval and manufacturing scale-up to support expanded development and potential future commercialization is costly and time consuming. Any failure by us or delay in completing clinical trials, manufacturing scale up or in obtaining regulatory approvals could lead to increased research and development expense and, in turn, have a material adverse effect on our results of operations. We expect that our research and development expenses may increase if we are successful in advancing sitravatinib, MRTX849 and our preclinical KRAS G12D program, or any of our other preclinical programs into more advanced stages of clinical development.
General and administrative expenses
General and administrative expenses consist primarily of salaries and related benefits, including share-based compensation, related to our executive, finance, business development, legal, human resources and support functions. Other general and administrative expenses include professional fees for auditing, tax, consulting and patent-related services, rent and utilities and insurance.
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General and administrative expenses for the three months ended
Other Income, Net
Other income, net for the three months ended
Liquidity and Capital Resources AtMarch 31, 2020 , we had$695.4 million of cash, cash equivalents and short-term investments compared to$415.1 million atDecember 31, 2019 . InJanuary 2020 , we completed a public offering of our common stock that generated net proceeds of$324.0 million . Based on our current and anticipated level of operations, we believe that our cash, cash equivalents and short-term investments will be sufficient to meet our anticipated obligations for at least one year from the date that this Quarterly Report on Form 10-Q is filed with theSEC . To date, we have funded our operations primarily through the sale of our common stock, pre-funded warrants to purchase our common stock, and to a lesser extent through up-front payments, research funding and milestone payments under collaborative arrangements. Since inception, we have primarily devoted our resources to funding research and development programs, including discovery research, preclinical and clinical development activities. To fund future operations, we will likely need to raise additional capital. The amount and timing of future funding requirements will depend on many factors, including the timing and results of our ongoing development efforts, the potential expansion of our current development programs, potential new development programs and related general and administrative support. We anticipate that we will seek to fund our operations through public or private equity or debt financings or other sources, such as potential collaboration agreements. We cannot make assurances that anticipated additional financing will be available to us on favorable terms, or at all. Although we have previously been successful in obtaining financing through our equity securities offerings, there can be no assurance that we will be able to do so in the future. As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive.
Cash Flows for the Three Months Ended
The following table provides a summary of the net cash flow activity for each of the periods set forth below (in thousands):
Three months ended
March 31,
2020 2019
Net cash used in operating activities $ (59,004 ) $ (34,482 )
Net cash used in investing activities (122,227 ) (35,208 )
Net cash provided by financing activities 339,201 111,601
Increase in cash, cash equivalents and restricted cash 157,970 41,911
Net cash used in operating activities
Net cash used in operating activities for the three months ended
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activities during 2019 primarily related to our net loss of
Net cash used in investing activities
For the three months ended
Net cash provided by financing activities
Net cash provided by financing activities for the three months ended
Off-Balance Sheet Arrangements
During the three months ended
Contractual Obligations and Commitments
There were no material changes outside of the ordinary course of business to our
specific contractual obligations during the three months ended
Recent Accounting Pronouncements
Occasionally, new accounting standards are issued or proposed by the
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