What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-15 compared with 2022-05-13 · 62 added, 35 removed, 102 unchanged (49% of the section changed)

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MiNK Therapeutics, Inc.

(“we,” “us” and “our”) is 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.

(“we,” “us” and “our”) is a clinical stage biopharmaceutical company pioneering the discovery, development and manufacturing 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.

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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.

We are a party to an Amended and Restated Intercompany Services Agreement and an Intellectual Property Assignment and License Agreement with Agenus.

Under the Amended and Restated Intercompany Services Agreement, Agenus provides us with certain general and administrative support, including, without limitation, financial, facilities management, human resources and information technology administrative support, and we and Agenus provide each other with certain research and development services and other support services, including legal and regulatory support.

We are also entitled to use Agenus’ business offices and laboratory space and equipment in exchange for us contributing a proportionate payment for the use of such facilities and equipment, and we will be covered by certain Agenus insurance policies, subject to certain conditions, including us paying the cost of such coverage.

Under the Intellectual Property Assignment and License Agreement, Agenus exclusively assigned patent rights and know-how related to our technology to us.

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and we retain the rights to expand a proprietary pipeline of products and technologies.

We recently announced the internalization of manufacturing and completed the internal cGMP production of AgenT-797 with expansion capacity to treat >700,000 patients/year.

Our most advanced product, 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, reported preliminary signals of activity, and expect to report data from this trial in the fourth quarter of 2022.

In addition, we announced the initiation of our Phase 1 clinical trial for the study of solid tumor cancers with AGENT-797 as a monotherapy and in combination with checkpoint inhibitors, which we intend to advance as a priority.

We currently expect to have preliminary readouts from this clinical trial in 2022 in indications that may lead to an accelerated path to marketing approval.

We also intend to initiate a Phase 1 study of AGENT-797 in GvHD in 2022 and expect to report top-line data from this trial in the second half of 2022.

In addition, we announced the initiation of our Phase 1 clinical trial for the study of solid tumor cancers with AGENT-797 as a monotherapy and in combination with approved checkpoint inhibitors, which we intend to advance as a priority.

We currently expect to have preliminary readouts from this trial in 2022 in indications that may lead to an accelerated path to marketing approval.

We also intend to initiate a Phase 1 study of AGENT-797 in GvHD in 2022.

Finally, with the unique circumstances of the COVID-19 pandemic, we were able to commence first-in-human studies of AGENT-797 in acute respiratory distress (“ARDS”) secondary to COVID-19 and reported encouraging survival benefit exceeding 75% presented at the Society of Immunotherapy for Cancer in 2021.

Later this year, we expect to present updated data of the clinical effect of AGENT-797 on viral ARDS where there are currently no effective therapies.

We expect to present updated data of the clinical effect of AGENT-797 on viral ARDS, an indication where there are no approved therapies.

We recently announced that agenT-797 for the treatment of infections and viral ARDS was identified as selectable for funding by DARPA;

contract negotiations are underway.

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 application filings for these candidates in 2022.

Our research and development expenses for the three months ended March 31, 2022 and 2021 were $5.3 million and $3.1 million, respectively.

These programs are novel and differentiated, and both are in preclinical development.

We initiated our investigational new drug application filings for these candidates in 2022.

Our research and development (“R&D”) expenses for the six months ended June 30, 2022 and 2021 were $11.2 million and $6.7 million, respectively.

We have incurred losses since our inception.

As of March 31, 2022, we had an accumulated deficit of $90.7 million.

Until the completion of our initial public offering, we were reliant on Agenus to finance our operations.

As of June 30, 2022, we had an accumulated deficit of $96.8 million.

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 and cash equivalents balance 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.

Management continues to monitor 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.

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Historical Results of Operations

Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021

Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021

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 70% to $5.3 million for the three months ended March 31, 2022 from $3.1 million for the three months ended March 31, 2021.

This increase is primarily due to costs associated with an increase in preclinical activities, the continued advancement of our clinical trials and increased personnel costs.

R&D expense includes the costs associated with our internal research and development activities, including compensation and benefits, occupancy costs, manufacturing costs, costs of expert consultants, and administrative costs.

R&D expense increased 64% to $5.9 million for the three months ended June 30, 2022 from $3.6 million for the three months ended June 30, 2021.

This increase is primarily due to an increase in costs associated with the advancement of our clinical trials, increased preclinical activities and increased personnel costs associated with internalization of our manufacturing activities.

General and administrative expense

General and administrative (“G&A”) expense consists primarily of personnel costs, facility expenses, and professional fees.

G&A expense increased 252% to $2.1 million for the three months ended March 31, 2022 from $0.6 million for the three months ended March 31, 2021.

This increase is primarily due to increased personnel costs, including stock-based compensation expense, and increased professional fees, primarily attributable to additional legal, strategy and audit and tax fees.

G&A expense increased 110% to $1.8 million for the three months ended June 30, 2022 from $0.9 million for the three months ended June 30, 2021.

Other income (expense), net

Other income (expense), net includes our foreign currency transactional activity and other income or expense.

Other income increased $1.5 million for the three months ended June 30, 2022, from income of $0.1 million for the three months ended June 30, 2021 to income of $1.6 million for the three months ended June 30, 2022, primarily due to the recognition of a $2.7 million gain on the partial forgiveness of the advance received under our research and development agreement with the Belgium Walloon Region Government (the “Walloon Region”), which was partially offset by foreign currency exchange losses, in the three months ended June 30, 2022, compared to foreign currency exchange gains in the three months ended June 30, 2021.

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 convertible affiliated note issued to Agenus (the “Note”) at the balance sheet date.

In October 2021, in connection with our initial public offering, the Note was automatically converted into 5,451,958 shares of our common stock and was not outstanding as of March 31, 2022.

In October 2021, in connection with our initial public offering, the Note was automatically converted into 5,451,958 shares of our common stock and was not outstanding as of June 30, 2022.

Interest expense

Interest expense related to the Note was $0.7 million for the three months ended March 31, 2021.

In October 2021, in connection with our initial public offering, the Note was automatically converted into 5,451,958 shares of our common stock and was not outstanding as of March 31, 2022.

Interest expense related to the Note was $0.8 million for the three months ended June 30, 2021.

In October 2021, in connection with our initial public offering, the Note was automatically converted into 5,451,958 shares of our common stock and was not outstanding as of June 30, 2022.

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Research and development expense

R&D expense increased 67% to $11.2 million for the six months ended June 30, 2022 from $6.7 million for the six months ended June 30, 2021.

General and administrative expense

G&A expense consists primarily of personnel costs, facility expenses, and professional fees.

G&A expense increased 168% to $3.9 million for the six months ended June 30, 2022 from $1.5 million for the six months ended June 30, 2021.

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 the Note at the balance sheet date.

In October 2021, in connection with our initial public offering, the Note was automatically converted into 5,451,958 shares of our common stock and was not outstanding as of June 30, 2022.

Other income (expense), net

Other income (expense), net includes our foreign currency transactional activity and other income or expense.

Other income increased $1.2 million for the six months ended June 30, 2022, from expense of $12,000 for the six months ended June 30, 2021 to income of $1.2 million for the six months ended June 30, 2022, primarily due to the recognition of a $2.7 million gain on the partial forgiveness of the advance received under our research and development agreement with the Walloon Region, which was partially offset by foreign currency exchange losses, in the six months ended June 30, 2022, compared to de minimis foreign currency exchange losses in the six months ended June 30, 2021.

Interest expense

Interest expense related to the Note was $1.5 million for the six months ended June 30, 2021.

In October 2021, in connection with our initial public offering, the Note was automatically converted into 5,451,958 shares of our common stock and was not outstanding as of June 30, 2022.

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 three months ended March 31,

For the six months ended June 30,

For the years ended December 31,

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Allocated services

Materials and other

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.

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Liquidity and Capital Resources

We have incurred annual operating losses since inception, and we had an accumulated deficit of $90.7 million as of March 31, 2022.

We have incurred annual operating losses since inception in 2017, and we had an accumulated deficit of $96.8 million as of June 30, 2022.

We expect to incur losses over the next several years as we continue development of our technologies and product candidates, manage our regulatory processes, initiate and continue clinical trials, and prepare for potential commercialization of products.

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The Note had a $45.5 million principal balance, plus accrued and unpaid interest of $6.8 million , as of October 14, 2021, the date we priced our initial public offering .

In connection of the completion of our initial public offering, the Note was automatically converted into 5,451,958 shares of our common stock and was not outstanding as of March 31, 2022.

In December 2018, we entered into an agreement with the Belgium Walloon Region Government (the “Walloon Region”) in which the Walloon Region agreed to provide a grant of €1.3 million and a repayable advance of €8.3 million for the development of one of our research programs.

As of March 31, 2022, we had received $881,000 of the grant portion and $5.2 million of the repayable advance.

During 2020, we discontinued research efforts related to this program and are evaluating our options in accordance with the terms of the agreement.

We recognized the grant portion received as income during the years ended December 31, 2019 and 2020 and have included the repayable advance balance of $5.2 million in other current liabilities in our condensed consolidated balance sheet at March 31, 2022, while we finalize the termination of the agreement with the Walloon Region.

We received a notice from the Walloon Region in February 2021 informing us that, pursuant to the terms of the agreement, they have assumed we plan to exploit the results of our research under the program and as such expect us to reimburse the repayable advance, and we have responded to the Walloon Region that we do not plan to exploit the results of such research.

It is uncertain at this time if we will be obligated to repay any or all of this advance.

Our cash and cash equivalents balance as of March 31, 2022 was $34.7 million.

In connection of the completion of our initial public offering, the Note was automatically converted into 5,451,958 shares of our common stock and was not outstanding as of June 30 , 2022 .

In December 2018, we entered into an agreement with the Walloon Region in which the Walloon Region agreed to provide a grant of up to €1.3 million and an advance of up to €8.3 million for the development of one of our research programs.

As of June 30, 2022, we had received $881,000 of the grant portion and $5.2 million of the advance.

During 2020, we discontinued research efforts related to this program, and in 2021 we provided additional information as requested by the Walloon Region to terminate the agreement.

We recognized the grant portion received as income during the years ended December 31, 2019 and 2020.

Based on notice received in the second quarter of 2022 stating that the Walloon Region was seeking repayment of approximately $2.2 million of the advance, we reduced the recorded liability and recorded a gain of approximately $2.7 million in our condensed consolidated statement of operations for the period ended June 30, 2022.

We have included the remaining balance of $2.2 million in other current liabilities in our condensed consolidated balance sheet at June 30, 2022 while we evaluate the merits of the Walloon Region’s claim to the amount.

The Walloon Region obtained a default judgment for the $2.2 million.

The Company is evaluating its options to reverse the judgment as it provided timely notice of its intentions to cease operations pursuant to the December 2018 agreement.

Our cash and cash equivalents balance as of June 30, 2022 was $29.8 million.

Based on our current plans and projections we believe this cash balance 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.

Management continues to monitor 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.

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(1) pursuing collaboration, out-licensing and/or partnering opportunities for our portfolio programs and product candidates with one or more third parties, (2) securing debt financing and/or (3) selling equity securities.

Net cash used in operating activities for both the three months ended March 31, 2022 and 2021 was $4.2 million.

Net cash used in operating activities for the six months ended June 30, 2022 and 2021 was $8.8 million and $7.6 million, respectively.

Our future ability to generate cash from operations will depend on achieving regulatory approval and market acceptance of our product candidates, and our ability to enter into collaborations.

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we may fail to develop AGENT-797 successfully or be unable to obtain regulatory approval for it;

allogeneic iNKT cells represents a novel approach to immunotherapy;

utilizing allogeneic iNKT cells represents a novel approach to immunotherapy;

our product candidates will require significant additional testing before we can seek regulatory approval;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis