What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-10 compared with 2021-08-10 · 71 added, 49 removed, 163 unchanged (42% of the section changed)

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and (v) all dollar amounts refer to United States dollars unless otherwise indicated.

The following should be read in conjunction with our unaudited condensed consolidated interim financial statements and related notes for the six months ended June 30, 2021 included in this Quarterly Report.

The following should be read in conjunction with our unaudited condensed consolidated interim financial statements and related notes for the nine months ended September 30, 2021 included in this Quarterly Report.

Company Overview

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We initiated the remainder of the Phase 2 trial in July 2021 and plan to complete enrollment of approximately 20 patients and activate additional clinical sites across the United States in the fourth quarter of 2021 in order to report results from the active disease arm of the trial in the first quarter of 2022.

We expect to begin manufacturing MT-401 for the Phase 2 trial at our cGMP manufacturing facility in the third quarter of 2021.

We expect to begin manufacturing MT-401 for the Phase 2 trial at our cGMP manufacturing facility in the fourth quarter of 2021, which facility became fully operational in July 2021.

We reported interim data for an ongoing Phase 1/2 clinical trial of the MultiTAA-specific T cell therapy for the treatment of pancreatic adenocarcinoma being conducted by BCM.

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As of June 2021, the MultiTAA-specific T cell therapies have been generally well tolerated by all of the patients enrolled in clinical trials in hematological and solid tumor indications with no incidents of cytokine release syndrome or neurotoxicity, which are frequently associated with CAR-T therapies.

Our ongoing clinical trials may be also affected by the COVID-19 pandemic.

Our ongoing clinical trials may be also affected by the COVID-19 pandemic and the emergence of any new variant strains of COVID-19.

Based on our observations in clinical trials in AML, pancreatic cancer, lymphoma, ALL and MM, we believe that the MultiTAA-specific T cell therapies have the potential to mediate a meaningful anti-tumor effect, as well as significant in vivo expansion of T cells.

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In this discussion of our results of operations and financial condition, amounts in financial tables, other than per-share amounts, have been rounded to the nearest thousand.

Comparison of the Three Months Ended June 30, 2021 and 2020

The following table summarizes the results of our operations for the three months ended June 30, 2021 and 2020:

Comparison of the Three Months Ended September 30, 2021 and 2020

The following table summarizes the results of our operations for the three months ended September 30, 2021 and 2020:

For the Three Months Ended

September 30,

Total revenues

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Change in fair value of warrant liabilities

Loss on settlement

Interest income

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Weighted average number of common shares outstanding, basic and diluted

We did not receive any grant income during the three months ended June 30, 2021.

During the three months ended June 30, 2020, we received $0.5 million of a grant awarded to the Mayo Foundation from the U.S.

Department of Defense to fund the Phase 2 clinical trial of TPIV100 for the treatment of HER2/neu breast cancer.

The portion of the grant we received compensated us for clinical supplies manufactured by us for the clinical trial.

Operating Expenses

Operating expenses incurred during the three months ended June 30, 2021 were $10.9 million compared to $6.8 million during the three months ended June 30, 2020.

Operating expenses incurred during the three months ended September 30, 2021 were $10.0 million compared to $7.4 million during the three months ended September 30, 2020.

Significant changes and expenditures in operating expenses are outlined as follows:

Research and Development Expenses

Research and development expenses increased by 72% to $7.4 million for the three months ended June 30, 2021, compared to $4.3 million for the three months ended June 30, 2020.

Research and development expenses increased by 41% to $6.8 million for the three months ended September 30, 2021, compared to $4.8 million for the three months ended September 30, 2020.

The increase of $2.0 million in 2021 was primarily attributable to the following:

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o increase of $0.6 million in headcount-related expenses,

o increase of $0.5 million in process development expenses,

o increase of $0.3 million in sponsored research expenses from BCM agreements,

o increase of $0.3 million in rent and utilities,

o increase of $0.2 million in other expenses, and

o increase of $0.1 million in rent and utilities, and

o increase of $0.4 million in depreciation expenses primarily attributable to our manufacturing facility and related expenses, offset by

o decrease of $0.2 million in expenses related to our vaccine clinical trials,

o decrease of $0.1 million in process development expenses, and

o decrease of $0.1 million in other expenses.

General and Administrative Expenses

General and administrative expenses were $3.6 million and $2.5 million for the three months ended June 30, 2021 and 2020, respectively.

General and administrative expenses were $3.2 million and $2.6 million for the three months ended September 30, 2021 and 2020, respectively.

The increase of $0.6 million in 2021 was primarily attributable to the following:

o increase of $0.3 million in legal fees,

o increase of $0.3 million in headcount-related expenses,

o increase of $0.2 million in rent and utilities, and

o increase of $0.3 million in other expenses.

o increase of $0.2 million in headcount-related expenses, and

o increase of $0.1 million in rent and utilities.

Other Income (Expense)

Arbitration settlement

An arbitration proceeding was brought against us before the FINRA by a broker seeking to be paid compensation for two financing transactions that occurred in 2018, a warrant conversion and a private placement brokered by another broker.

The broker’s claims were based on a placement agent agreement for a private placement it brokered in 2017, under which it alleged it was entitled to compensation for the 2018 transactions.

The FINRA panel found in favor of the broker and awarded the broker $2.4 million for compensation, interest and attorney fees, which we recorded in the three months ended September 30, 2021.

On October 22, 2021, we filed a motion in federal court to vacate the award.

Interest Income

Interest income was $2,000 and $16,000 for the three months ended June 30, 2021 and 2020, respectively, and was attributable to interest income relating to funds that are held in U.S.

Interest income was $1,000 and $5,000 for the three months ended September 30, 2021 and 2020, respectively, and was attributable to interest income relating to funds that are held in U.S.

Treasury notes and U.S.

government agency-backed securities.

The increase in our net loss during the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was due to the continued expansion of our research and development activities, increased expenses relating to future clinical trials, and the overall growth of our corporate infrastructure.

The increase in our net loss during the three months ended September 30, 2021 compared to the three months ended September 30, 2020 was due to the continued expansion of our research and development activities, increased expenses relating to future clinical trials, and the overall growth of our corporate infrastructure.

We anticipate that we will continue to incur net losses in the future as we continue to invest in research and development activities, including clinical development of our MultiTAA T cell product candidates.

Comparison of the Six Months Ended June 30, 2021 and 2020

The following table summarizes the results of our operations for the six months ended June 30, 2021 and 2020:

For the Six Months Ended

Comparison of the Nine months ended September 30, 2021 and 2020

The following table summarizes the results of our operations for the nine months ended September 30, 2021 and 2020:

For the Nine Months Ended

September 30,

Total revenues

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Change in fair value of warrant liabilities

Loss on settlement

Interest income

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Weighted average number of common shares outstanding

We did not receive any grant income during the six months ended June 30, 2021.

During the six months ended June 30, 2020, we received $0.5 million of a grant awarded to the Mayo Foundation from the U.S.

We did not receive any grant income during the nine months ended September 30, 2021.

During the nine months ended September 30, 2020, we received $0.5 million of a grant awarded to the Mayo Foundation from the U.S.

Department of Defense to fund the Phase 2 clinical trial of TPIV100 for the treatment of HER2/neu breast cancer.

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Operating Expenses

Operating expenses incurred during the six months ended June 30, 2021 were $19.7 million compared to $13.5 million during the six months ended June 30, 2020.

Operating expenses incurred during the nine months ended September 30, 2021 were $29.7 million compared to $20.8 million during the nine months ended September 30, 2020.

Significant changes and expenditures in operating expenses are outlined as follows:

Research and Development Expenses

Research and development expenses increased by 61% to $13.0 million for the six months ended June 30, 2021, compared to $8.1 million for the six months ended June 30, 2020.

Research and development expenses increased by 53% to $19.8 million for the nine months ended September 30, 2021, compared to $12.9 million for the nine months ended September 30, 2020.

The increase of $6.9 million in 2021 was primarily attributable to the following:

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General and Administrative Expenses

General and administrative expenses were $6.7 million and $5.4 million for the six months ended June 30, 2021 and 2020, respectively.

General and administrative expenses were $9.9 million and $7.9 million for the nine months ended September 30, 2021 and 2020, respectively.

The increase of $2.0 million in 2021 was primarily attributable to the following:

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o increase of $0.9 million in headcount-related expenses,

o increase of $0.2 million in recruitment expenses,

o increase of $0.4 million in rent and utilities, and

o increase of $0.3 million in other expenses.

o increase of $0.3 million in legal expenses.

Other Income (Expense)

Change in Fair Value of Warrant Liabilities

Change in fair value of warrant liabilities for the six months ended June 30, 2021 was $0 as compared to $31,000 for the six months ended June 30, 2020.

Change in fair value of warrant liabilities for the nine months ended September 30, 2021 was $0 as compared to $31,000 for the nine months ended September 30, 2020.

Arbitration settlement

The broker’s claims were based on a placement agent agreement for a private placement it brokered in 2017, under which it alleged it was entitled to compensation for the 2018 transactions.

The FINRA panel found in favor of the broker and awarded the broker $2.4 million for compensation, interest and attorney fees, which we recorded in the nine months ended September 30, 2021.

On October 22, 2021, we filed a motion in federal court to vacate the award.

Interest Income

Interest income was $3,900 and $0.1 million for the six months ended June 30, 2021 and 2020, respectively, and was attributable to interest income relating to funds that are held in U.S.

Interest income was $5,000 and $0.1 million for the nine months ended September 30, 2021 and 2020, respectively, and was attributable to interest income relating to funds that are held in U.S.

Treasury notes and U.S.

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As part of the reaction to the COVID-19 pandemic, the Federal Reserve cut rates in mid-March of 2020 to a range of 0.0% - 0.25%.

As such, we recorded lower interest income during the six months ended June 30, 2021.

The increase in our net loss during the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was due to the continued expansion of our research and development activities, increased expenses relating to future clinical trials, and the overall growth of our corporate infrastructure.

As such, we recorded lower interest income during the nine months ended September 30, 2021.

The increase in our net loss during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was due to the continued expansion of our research and development activities, increased expenses relating to future clinical trials, and the overall growth of our corporate infrastructure.

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We have financed our operations primarily through public and private offerings of our debt and equity securities.

The following table sets forth our cash and cash equivalents and working capital as of June 30, 2021 and December 31, 2020:

Cash and Working Capital

The following table sets forth our cash and cash equivalents and working capital as of September 30, 2021 and December 31, 2020:

September 30,

Cash and cash equivalents

Working capital

The following table summarizes our cash flows for the six months ended June 30, 2021 and 2020:

For the Six Months Ended

The following table summarizes our cash flows for the nine months ended September 30, 2021 and 2020:

For the Nine Months Ended

September 30,

Net cash provided by (used in):

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Operating Activities

Net cash used in operating activities during the six months ended June 30, 2021 was $15.9 million compared to $8.4 million for the same period last year.

The changes in cash flow from operating activities during the six months ended June 30, 2021 were due to $19.7 million of net losses and a $0.8 million decrease from changes in operating assets and liabilities.

This was offset by $3.0 million of stock-based compensation, $1.0 million of depreciation expense and $0.5 million right-of-use asset amortization and lease liability accretion.

Net cash used in operating activities during the nine months ended September 30, 2021 was $22.4 million compared to $14.5 million for the same period last year.

The increase of $7.9 million was primarily attributable to the increased costs in research and development and pre-commercial activities.

The changes in cash flow from operating activities during the nine months ended September 30, 2021 were due to $32.1 million of net losses and a $2.9 million increase from changes in operating assets and liabilities.

This was in addition to $4.5 million of stock-based compensation, $1.6 million of depreciation expense and $0.8 million right-of-use asset amortization and lease liability accretion.

Investing Activities

Net cash used in investing activities was $0.8 million and $3.9 million for the purchase of property and equipment during the six months ended June 30, 2021 and 2020, respectively.

The increase relates to purchases of laboratory equipment for the manufacturing facility.

Net cash used in investing activities was $2.8 million and $5.2 million for the purchase of property and equipment and construction in progress related to the manufacturing facility during the nine months ended September 30, 2021 and 2020, respectively.

The increase mainly relates to purchases of equipment for the manufacturing and research facilities.

Financing Activities

Net cash provided by financing activities was $52.6 million during the six months ended June 30, 2021, due to the net proceeds received from the underwritten public offering.

Net cash provided by financing activities was $0.6 million during the six months ended June 30, 2020.

Net cash provided by financing activities was $52.6 million during the nine months ended September 30, 2021, due to the net proceeds received from the underwritten public offering.

Net cash provided by financing activities was $2.7 million during the nine months ended September 30, 2020, due to the exercise of $0.5 million in stock warrants and the purchase of $2.2 million in common stock.

Future Capital Requirements

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If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

In August 2021, we entered into a Controlled Equity Offering SM Sales Agreement, or the ATM Agreement, with Cantor Fitzgerald & Co.

and RBC Capital Markets, LLC, or the Sales Agents, pursuant to which we can offer and sell, from time to time at our sole discretion through the Sales Agents, shares of our common stock having an aggregate offering price of up to $75.0 million.

Any shares of our common stock sold will be issued pursuant to our shelf registration statement on Form S-3 (File No.

333-258687), which the SEC declared effective on August 19, 2021.

The Sales Agents will be entitled to compensation under the Sales Agreement at a commission rate equal to 3.0% of the gross sales price per share sold under the ATM Agreement, and we have provided each of the Sales Agents with indemnification and contribution rights.

To date, we have not sold any shares of our common stock under the ATM Agreement.

On March 16, 2021, we issued an aggregate of 32,282,857 shares of our common stock, for net proceeds of $52.6 million pursuant to an underwritten public offering.

As of June 30, 2021, we had working capital of $54.4 million, compared to working capital of $18.0 million as of December 31, 2020.

Based on our clinical and research and development plans and our timing expectations related to the progress of our programs, we expect that our cash and cash equivalents as of June 30, 2021 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2023.

As of September 30, 2021, we had working capital of $43.2 million, compared to working capital of $18.0 million as of December 31, 2020.

Based on our clinical and research and development plans and our timing expectations related to the progress of our programs, we expect that our cash and cash equivalents as of September 30, 2021 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2023.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

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We may also be required to pay damages or have liabilities associated with litigation or other legal proceedings involving our company.

In August 2021, we received notice of a Product Development Research award totaling approximately $13.1 million from the Cancer Prevention and Research Institute of Texas, or CPRIT, to support our Phase 2 clinical trial of its lead MultiTAA-specific T cell product MT-401.

The CPRIT award is intended to support the adjuvant arm of our Phase 2 clinical trial evaluating MT-401 when given as an adjuvant therapy to patients with AML following a hematopoietic stem cell transplant.

The primary objectives of the adjuvant arm of the trial are to evaluate relapse-free survival after MT-401 treatment when compared with a randomized control group.

To date, the Company has not received any funds from the CPRIT grant.

In addition to the foregoing, based on our current assessment, we do not expect any material impact on our long-term liquidity due to the COVID-19 pandemic.

However, we will continue to assess the effect of the pandemic on our operations.

The extent to which the COVID-19 pandemic will impact our business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, the duration and effect of business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries to contain and treat the disease.

While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.

In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.

The extent to which the COVID-19 pandemic will impact our business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, the emergence of any new variant strains of COVID-19, the duration and effect of business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements, the timing, distribution, rate of public acceptance and efficacy of vaccines and other treatments, and business closures in the United States and other countries to contain and treat the disease.

While the potential economic impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, it could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.

In addition, a recession or market correction resulting from the spread of COVID-19 and any variant strains thereof could materially affect our business and the value of our common stock.

Critical Accounting Policies

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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