MINK THERAPEUTICS, INC. Forward Looking Statements
This Quarterly Report on Form 10-Q contains certain "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). You can identify these forward-looking statements by the fact they use words such as "could," "expect," "anticipate," "estimate," "target," "may," "project," "guidance," "intend," "plan," "believe," "will," "potential," "opportunity," "future" and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. Certain forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. These statements relate to, among other things, our business strategy, our research and development, our product development efforts, our ability to commercialize our product candidates, our prospects for initiating partnerships or collaborations, the timing of the introduction of products, the effect of new accounting pronouncements, uncertainty regarding our future operating results and our profitability, anticipated sources of funds as well as our plans, objectives, expectations, and intentions.
We have included more detailed descriptions of these risks and uncertainties and other risks and uncertainties applicable to our business that we believe could cause actual results to differ materially from any forward-looking statements in Part II-Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q. We encourage you to read those descriptions carefully. Although we believe we have been prudent in our plans and assumptions, no assurance can be given that any goal or plan set forth in forward-looking statements can be achieved. We caution investors not to place significant reliance on forward-looking statements contained in this document; such statements need to be evaluated in light of all the information contained in this document. Furthermore, the statements speak only as of the date of this document, and we undertake no obligation to update or revise these statements.
Overview
We are a clinical stage biopharmaceutical company pioneering the discovery, development and commercialization of allogeneic, off-the-shelf, invariant natural killer T (iNKT) cell therapies to treat cancer and other immune-mediated diseases. iNKT cells are a distinct T cell population that combine durable memory responses with the rapid cytolytic features of natural killer (NK) cells. iNKT cells offer distinct therapeutic advantages as a platform for allogeneic therapy in that the cells naturally home to tissues, aid clearance of tumors and infected cells and suppress graft-versus-host-disease (GvHD). Our proprietary platform is designed to facilitate scalable and reproducible manufacturing for off-the-shelf delivery. As such, we believe that our approach represents a highly versatile application for therapeutic development in cancer and immune diseases. We have leveraged our platform and manufacturing capabilities to develop a wholly owned or exclusively licensed pipeline for both native and engineered iNKT cells and have multiple preclinical and clinical readouts expected in 2021 and 2022.
Our business activities include product research and development, manufacturing, regulatory and clinical development, corporate finance and support of our collaborations. To be successful, our product candidates require clinical trials and approvals from regulatory agencies, as well as acceptance in the marketplace. We are a party to an Intercompany General & Administrative Services Agreement and an Intellectual Property Assignment and License Agreement with Agenus. Under the Intercompany General & Administrative Services Agreement, Agenus provides us with administrative support, including, without limitation, financial, legal, information technology and human resources administrative support. Additional non-administrative services and use of certain facilities are available as may be agreed to between the parties from time to time. Under the Intellectual Property Assignment and License Agreement, Agenus exclusively assigned patent rights and know-how related to our technology to us. We also have a field-limited exclusive license under certain Agenus patents and know-how; and we retain the rights to expand a proprietary pipeline of products and technologies.
Our most advanced product candidate, AGENT-797, is an off-the-shelf, allogeneic,
native iNKT cell therapy. We have commenced a Phase 1 clinical trial of
AGENT-797 for the treatment of multiple myeloma and expect to report top-line
data from this trial in the fourth quarter of 2021. In addition, in
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In addition, we are advancing a pipeline of next-generation allogeneic, engineered iNKT programs. Our two most advanced engineered programs are (1) a CAR-iNKT program targeting B-cell maturation antigen (BCMA), which we refer to as BCMA-CAR-iNKT, and (2) a tumor stromal targeting CAR-iNKT program, which we refer to as stromal target-CAR-iNKT. These programs are both in preclinical development and we expect to initiate our investigational new drug (IND) filings for these candidates in 2022.
Our research and development expenses for the nine months ended
Until the completion of our initial public offering, we were reliant on Agenus to finance our operations. We expect to continue to incur operating losses and negative cash flows for the foreseeable future. Based on our current plans and projections, we believe our quarter end cash balance, plus the proceeds received subsequently from our initial public offering, will be sufficient to satisfy our liquidity requirements for more than one year from when these financial statements were issued. Management continues to address our liquidity position and will adjust spending as needed in order to preserve liquidity. Our future liquidity needs will be determined primarily by the success of our operations with respect to the progress of our product candidates and key development and regulatory events in the future. Potential sources of additional funding include: (1) pursuing collaboration, out-licensing and/or partnering opportunities for our portfolio programs and product candidates with one or more third parties, (2) selling assets, (3) securing additional debt financing and/or (4) selling equity securities.
Historical Results of Operations
Three Months Ended
Research and development expense
Research and development (R&D) expense includes compensation and other direct
costs plus an allocation of indirect costs, based on certain assumptions. R&D
expense increased 33% to
General and administrative expense
General and administrative (G&A) expense consists primarily of personnel costs,
facility expenses, and professional fees. G&A expense increased 75% to
Change in fair value of convertible affiliated note
Change in fair value of convertible affiliated note reflects the result of our fair value measurement of our note at the balance sheet date.
Interest expense
Interest expense relates to our outstanding convertible affiliated note and
increased 38%, to
Nine Months Ended
Research and development expense
R&D expense includes compensation and other direct costs plus an allocation of
indirect costs, based on certain assumptions. R&D expense increased 15% to
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General and administrative expense
G&A expense consists primarily of personnel costs, facility expenses, and
professional fees. G&A expense increased 43% to
Change in fair value of convertible affiliated note
Change in fair value of convertible affiliated note reflects the result of our fair value measurement of our note at the balance sheet date.
Interest expense
Interest expense relates to our outstanding convertible affiliated note and
increased 39%, to
Research and Development Programs
R&D program costs include compensation and other direct costs plus an allocation of indirect costs, based on certain assumptions.
For the nine months
ended September 30, For the years ended December 31,
2021 2020 2019
Payroll and personnel costs $ 2,197,598 $ 3,007,044 $ 4,823,197
Professional fees 4,914,634 5,025,282 12,051,677
Allocated services 1,034,298 758,549 430,038
Other 1,869,919 718,180 2,349,223
Total $ 10,016,449 $ 9,509,055 $ 19,654,135 Our product candidates are in various stages of development and significant additional expenditures will be required if we start new clinical trials, encounter delays in our programs, apply for regulatory approvals, continue development of our technologies, expand our operations and/or bring our product candidates to market. The total cost of any particular clinical trial is dependent on a number of factors such as trial design, length of the trial, number of clinical sites, number of patients and trial sponsorship. The process of obtaining and maintaining regulatory approvals for new products is lengthy, expensive and uncertain. Because of the current stage of our product candidates, among other factors, we are unable to reliably estimate the cost of completing our research and development programs or the timing for bringing such programs to various markets or substantial partnering or out-licensing arrangements, and, therefore, when, if ever, material cash inflows are likely to commence.
Liquidity and Capital Resources
We have incurred annual operating losses since inception, and we had an
accumulated deficit of
As of
In
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have included the repayable advance balance of
Our cash balance as of
Management continues to address our liquidity position and will adjust spending as needed in order to preserve liquidity. Our future liquidity needs will be determined primarily by the success of our operations with respect to the progression of our product candidates and key development and regulatory events in the future. Potential sources of additional funding include: (1) pursuing collaboration, out-licensing and/or partnering opportunities for our portfolio programs and product candidates with one or more third parties, (2) selling assets, (3) securing additional debt financing and/or (4) selling equity securities.
Net cash used in operating activities for the nine months ended
Critical Accounting Policies and Estimates
The
The preparation of consolidated financial statements in conformity with
The following is not intended to represent all of our accounting policies. Our
significant accounting policies are described in Note 2 of the notes to our
audited consolidated financial statements included in our Amended Registration
Statement on Form S-1 filed with the
Fair Value Measurements
In accordance with the Fair Value Option subsection of Accounting Standards Codification (ASC) 825, Financial Instruments - Overall, we measure the Note at fair value. In accordance with ASC 820, Fair Value Measurements and Disclosures, we measure fair value based on a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. We measured the Note using a scenario based present value methodology which was derived by evaluating the nature and terms of each note and considering the prevailing economic and market conditions at the balance sheet date.
Recent Accounting Pronouncements
Refer to Note 12 to our unaudited interim condensed consolidated financial statements included within this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our business.
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JOBS Act
We qualify as an "emerging growth company" as defined in the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies, including reduced disclosure about our executive compensation arrangements, exemption from the requirements to hold non-binding advisory votes on executive compensation and golden parachute payments and exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.
We may take advantage of these exemptions until the last day of the fiscal year
following the fifth anniversary of our initial public offering or such earlier
time that we are no longer an emerging growth company. We would cease to be an
emerging growth company earlier if we have more than
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to "opt out" of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to "opt out" of such extended transition period or (ii) no longer qualify as an emerging growth company. Therefore, the reported results of operations contained in our consolidated financial statements may not be directly comparable to those of other public companies.
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