UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______________ to _______________
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of May 5, 2023, the registrant had
Table of Contents
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Page |
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PART I. |
1 |
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Item 1. |
1 |
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Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 |
1 |
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2 |
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3 |
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Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 |
5 |
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Notes to Unaudited Interim Condensed Consolidated Financial Statements |
6 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 |
Item 3. |
16 |
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Item 4. |
16 |
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PART II. |
17 |
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Item 1. |
17 |
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Item 1A. |
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Item 2. |
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Item 6. |
18 |
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19 |
i
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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March 31, |
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December 31, |
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ASSETS |
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Cash and cash equivalents |
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$ |
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$ |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Equipment, net of accumulated depreciation of $ |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Other current liabilities |
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Total current liabilities |
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Other long-term liabilities |
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Due to related parties |
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STOCKHOLDERS’ DEFICIT |
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Common stock, par value $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
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Accumulated deficit |
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( |
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Total stockholders’ deficit |
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Total liabilities and stockholders’ deficit |
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$ |
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$ |
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See accompanying notes to unaudited condensed consolidated financial statements.
1
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
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Three Months Ended |
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2023 |
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2022 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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General and administrative |
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Operating loss |
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Other income (expense), net: |
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Interest income (expense), net |
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( |
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Other income (expense), net |
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— |
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( |
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Net loss |
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$ |
( |
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$ |
( |
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Per common share data: |
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Basic and diluted net loss per common share |
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$ |
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$ |
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Weighted average number of common shares outstanding |
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Other comprehensive income (loss): |
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Foreign currency translation gain (loss) |
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$ |
( |
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$ |
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Comprehensive loss |
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$ |
( |
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$ |
( |
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See accompanying notes to unaudited condensed consolidated financial statements.
2
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
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Common Stock |
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Treasury Stock |
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Accumulated |
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Number of |
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Par |
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Additional |
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Number of |
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Par |
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Other |
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Accumulated |
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Total |
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Balance at December 31, 2022 |
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$ |
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$ |
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— |
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$ |
— |
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$ |
( |
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$ |
( |
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( |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive loss |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Exercise of stock options and employee share purchases |
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— |
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— |
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— |
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— |
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Vesting of nonvested shares |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Grant and recognition of stock options |
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— |
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— |
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— |
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— |
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— |
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— |
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Recognition of parent stock options |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of shares for employee bonuses |
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( |
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( |
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— |
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— |
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Retirement of treasury shares |
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( |
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( |
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— |
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— |
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— |
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Balance at March 31, 2023 |
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$ |
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$ |
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— |
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$ |
— |
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$ |
( |
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$ |
( |
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$ |
( |
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3
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
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Common Stock |
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Treasury Stock |
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Accumulated |
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Number of |
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Par |
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Additional |
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Number of |
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Par |
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Other |
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Accumulated |
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Total |
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Balance at December 31, 2021 |
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$ |
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$ |
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— |
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$ |
— |
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$ |
( |
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$ |
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$ |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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— |
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— |
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Option exercises |
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— |
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— |
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— |
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— |
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Grant and recognition of stock options |
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— |
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— |
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— |
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— |
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— |
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— |
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Recognition of parent stock options |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance at March 31, 2022 |
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$ |
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$ |
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— |
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$ |
— |
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$ |
( |
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$ |
( |
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$ |
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See accompanying notes to unaudited condensed consolidated financial statements.
4
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Three Months Ended March 31, |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation |
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Share-based compensation |
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Changes in operating assets and liabilities: |
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Prepaid expenses |
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( |
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( |
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Accounts payable |
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Accrued liabilities and other current liabilities |
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( |
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Other operating assets and liabilities |
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Net cash used in operating activities |
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( |
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( |
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Cash flows from investing activities: |
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Purchases of plant and equipment |
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( |
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— |
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Net cash used in investing activities |
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( |
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— |
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Cash flows from financing activities: |
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Proceeds from employee stock purchases and option exercises |
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Purchase of treasury shares to satisfy tax withholdings |
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( |
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— |
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Net cash provided by (used in) financing activities |
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( |
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Effect of exchange rate changes on cash |
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( |
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( |
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Net decrease in cash and cash equivalents |
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( |
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( |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
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$ |
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$ |
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Supplemental cash flow information: |
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Cash paid for interest |
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$ |
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$ |
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Supplemental disclosures - non-cash activities: |
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Purchases of plant and equipment in accounts payable and accrued liabilities |
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$ |
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$ |
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Issuance of common stock, $ |
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— |
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See accompanying notes to unaudited condensed consolidated financial statements.
5
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Business and Liquidity
MiNK Therapeutics, Inc. (“MiNK” or the “Company”) 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 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. MiNK’s proprietary platform is designed to facilitate scalable and reproducible manufacturing for off-the-shelf delivery. As such, the Company believes that its approach represents a highly versatile application for therapeutic development in cancer and immune diseases. MiNK is leveraging its platform and manufacturing capabilities to develop a wholly owned or exclusively licensed pipeline of both native and engineered iNKT cells.
Since inception, in 2017, until the completion of the Company’s initial public offering (“IPO”), the Company financed its operations primarily through funding from Agenus Inc. (“Agenus”), its parent company. The Company has incurred losses since inception and, as of March 31, 2023, had an accumulated deficit of $
Management continually monitors the Company’s liquidity position and adjusts spending as needed in order to preserve liquidity. The Company’s future liquidity needs will be determined primarily by the success of its operations with respect to the progression of the Company’s product candidates and key development and regulatory events in the future. Potential sources of additional funding for the Company include: (1) pursuing collaboration, out-licensing and/or partnering opportunities for the Company’s portfolio programs and product candidates with one or more third parties, (2) securing debt financing and/or (3) selling equity securities. If additional funding is not obtained through these sources, Agenus has indicated a willingness to loan the Company certain funds to finance its operations.
MiNK’s product candidates are in various stages of development and additional expenditures will be required if the Company starts new trials, encounters delays in its programs, applies for regulatory approvals, continues development of its technologies, expands its operations, and/or brings its product candidates to market. The eventual total cost of each clinical trial is dependent on a number of factors such as trial design, length of the trial, number of clinical sites, and number of patients. The process of obtaining and maintaining regulatory approvals for new therapeutic products is lengthy, expensive, and uncertain. Because all of the Company’s programs are at an early stage of clinical development, the Company is unable to reliably estimate the cost of completing its 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.
(2) Significant Accounting Policies
The Company’s significant accounting policies are disclosed in the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 24, 2023. Since the date of those financial statements there have been no changes to the Company’s significant accounting policies.
Financial Statement Preparation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete annual consolidated financial statements. In the opinion of the Company’s management, the condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of the Company’s financial position and operating results. All significant intercompany transactions and accounts have been eliminated in consolidation. Operating results for the three months ended March 31, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Management bases its estimates on
6
historical experience and on various assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from those estimates.
For the Company’s foreign subsidiaries, the local currency is the functional currency. Assets and liabilities of its foreign subsidiaries are translated into U.S. dollars using rates in effect at the balance sheet date while expenses are translated into U.S. dollars using average exchange rates during the period. The cumulative translation adjustment resulting from changes in exchange rates are included in the condensed consolidated balance sheets as a component of accumulated other comprehensive income (loss) in total stockholders’ equity (deficit).
(3) Net Loss Per Share
Basic loss per common share is calculated by dividing the net loss by the weighted average number of common shares outstanding. Diluted loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding plus the dilutive effect of outstanding instruments such as stock options. Because the Company reported a net loss for all periods presented, diluted loss per common share is the same as basic loss per common share, as the effect of utilizing the fully diluted share count would have reduced the net loss per common share.
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Three Months Ended March 31, |
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2023 |
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2022 |
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Stock options |
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Non-vested shares |
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(4) Cash and Cash Equivalents
Cash equivalents consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):
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March 31, 2023 |
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December 31, 2022 |
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Cost |
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Estimated Fair Value |
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Cost |
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Estimated Fair Value |
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Institutional money market funds |
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$ |
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$ |
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$ |
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$ |
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(5) Accrued and Other Current Liabilities
Accrued liabilities consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):
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March 31, |
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December 31, |
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Payroll |
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$ |
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$ |
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Professional fees |
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Research services |
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Contract manufacturing costs |
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Total |
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$ |
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$ |
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Other current liabilities of $
(6) Share-based Compensation Plans
The Company primarily uses the Black-Scholes option pricing model to value options granted to employees and non-employees, as well as options granted to members of the Company’s Board of Directors. All stock option grants have
7
A summary of option activity for the three-month period ended March 31, 2023 is presented below:
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Options |
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Weighted |
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Weighted |
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Aggregate |
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Outstanding at December 31, 2022 |
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$ |
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Granted |
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Exercised |
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( |
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Forfeited |
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— |
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— |
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Expired |
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( |
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Outstanding at March 31, 2023 |
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$ |
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$ |
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Vested or expected to vest at March 31, 2023 |
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$ |
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$ |
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Exercisable at March 31, 2023 |
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$ |
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$ |
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The weighted average grant-date fair values of options granted during the three months ended March 31, 2023 and 2022 were $
As of March 31, 2023, there was $
A summary of non-vested stock activity for the three-month period ended March 31, 2023 is presented below:
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Nonvested |
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Weighted |
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Outstanding at December 31, 2022 |
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$ |
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Granted |
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Vested |
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( |
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Forfeited |
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— |
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— |
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Outstanding at March 31, 2023 |
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$ |
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||
As of March 31, 2023, there was $
During the three months ended March 31, 2023,
Stock based compensation expense also includes expense related to awards to employees of the Company from the Agenus 2019 Equity Incentive Plan.
|
|
Three Months Ended |
|
|||||
|
|
2023 |
|
|
2022 |
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||
Research and development |
|
$ |
|
|
$ |
|
||
General and administrative |
|
|
|
|
|
|
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Total share-based compensation expense |
|
$ |
|
|
$ |
|
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8
(7) Related Party Transactions
Until the completion of its IPO, the Company relied on Agenus for all of its working capital requirements. For the periods presented, certain of the Company’s operations were fully integrated with Agenus, including, but not limited to, corporate functions such as finance, human resources, information technology and legal functions. The Company’s consolidated financial statements reflect all costs of doing business related to these operations.
In September 2021, the Company entered into an Intellectual Property Assignment and License Agreement with Agenus (the “New Assignment and License Agreement”), upon which the prior intercompany agreement between Agenus and MiNK was terminated. Pursuant to the New Assignment and License Agreement, Agenus assigned to the Company certain patent rights and know-how related to its iNKT cell platform, product candidates and other patents and know-how related to its business. In addition to the patent rights assigned to the Company by Agenus, the Company also received an exclusive, royalty-free, sublicensable license to research, develop, manufacture and commercialize certain licensed technology in the field. The New Assignment and License Agreement further provides for the Company to grant Agenus a field-limited, non-exclusive, royalty-free license under the assigned patent rights, subject to MiNK’s discretion and provided such access would not reasonably result in a disruption of planned MiNK activities. Agenus has also agreed to provide the Company with Agenus’ biological material upon written request in order for the Company to use such material in its development activities of a combination therapy. Agenus may withhold the transfer of biological material, including, but not limited to, checkpoint modulating antibodies, for various reasons, including if such transfer would reasonably result in a disruption of planned Agenus activities. For any materials Agenus does share with the Company, the parties have agreed to enter into a separate agreement governing the transfer and providing for joint ownership of the data. Agenus has agreed that during the full term of the New Assignment and License Agreement, and for
Effective April 1, 2022, the Company entered into an Amended and Restated Intercompany Services Agreement (the “New Intercompany Agreement”) with Agenus, which amended and restated the Intercompany General & Administrative Agreement between the Company and Agenus dated September 10, 2021 (the “Prior Intercompany Agreement”). Under the New Intercompany Agreement, Agenus provides the Company with certain general and administrative support, including, without limitation, financial, facilities management, human resources and information technology administrative support (the “Agenus Services”), and the Company and Agenus provide each other with certain research and development services (the “R&D Services”) and other support services, including legal and regulatory support (the “Shared Services”). The Company is required to pay
Allocated Agenus services primarily include payroll related expenses, facility costs, insurance and stock-based compensation, and are included in the accompanying financial statements based on certain estimates and allocations described above. Under the Prior Intercompany Agreement, the allocation methods primarily included time devoted to activities and headcount-based allocations. Agenus business services and occupancy costs were allocated to the Company based on the Company’s headcount as a percentage of Agenus’ and the Company was required to pay
Allocation of Agenus services, net of approximately $
In January 2023, the Company's CEO ("Dr. Buell"), became an employee of Agenus in the role of Chairman of the Executive Counsel. As an employee of Agenus, Dr. Buell is paid $
9
In 2022, the Company entered into a Master Services Agreement with Atlant Clinical Ltd. (“Atlant”), a subsidiary of Agenus, to provide clinical trial support services to the Company, including an eTMF platform, medical monitoring and data manager services. The Company’s Audit and Finance Committee approved the engagement under its related-party transactions policy for up to $
Dr. Buell's spouse is a partner in the law firm of Wolf, Greenfield & Sachs, P.C. (“Wolf Greenfield”), which provided legal services to the Company during the quarter ended March 31, 2023, and continues to do so. For the three months ended March 31, 2023, the Company expensed Wolf Greenfield fees totaling approximately $
(8) Contingencies
The Company may currently be, or may become, a party to legal proceedings. While the Company currently believes that the ultimate outcome of any of these proceedings will not have a material adverse effect on its financial position, results of operations, or liquidity, litigation is subject to inherent uncertainty and consumes both cash and management attention.
(9) Recent Accounting Pronouncements
No new accounting pronouncement issued or effective during the three months ended March 31, 2023 had or is expected to have a material impact on the Company’s consolidated financial statements or disclosures.
10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview
MiNK Therapeutics, Inc. (“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. 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 are leveraging our platform and manufacturing capabilities to develop a wholly owned or exclusively licensed pipeline of both native and engineered iNKT cells.
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 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. 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. iNKTs are a potent class of immune cells and serve as master regulators of immune response, possessing the killing power of NK cells and the memory of T-cells. Our proprietary manufacturing platform allows these cells to be infused in billion-fold numbers, arming the immune system against cancer and other life-threatening diseases. We have established and launched in-house iNKT cell manufacturing and product release capacity to supply more than 5,000 doses per year through an FDA-cleared scalable, fully closed, and automatic process. Our Phase 1 clinical trial studying agenT-797 in solid tumor cancers, as a monotherapy and in combination with anti-PD-1 checkpoint inhibitors, pembrolizumab and nivolumab, is currently advancing as a priority program. Encouraging activity was seen with agenT-797 monotherapy and combination, with durable responses and disease stabilization in patients, which was presented at the American Association for Cancer Research ("AACR") in 2023.
AgenT-797 showed clinical benefit and tolerable safety across a range of heavily pre-treated solid tumors, including non-small cell lung cancer ("NSCLC"), testicular cancer, and gastric cancer in a Phase 1 clinical trial (AACR 2023). A partial response was achieved in a metastatic gastric cancer patient treated with agenT-797 in combination with nivolumab, which was ongoing at 9 months. This patient previously had no response to anti-PD-1 therapy and standard of care chemotherapy. A tolerable safety profile seen with the cells alone and in combination with PD-1, up to a billion cells, with no neurotoxicity, dose-limiting toxicities, or severe cytokine release syndrome (> grade 3). We will further evaluate these signals through a phase 1/2 expansion trial in combination with standard of care agents (pembrolizumab/nivolumab) with or without botensilimab (Agenus’ multifunctional anti-CTLA-4) in relapsed/refractory gastric cancer.
With the unique circumstances of the COVID-19 pandemic, we commenced a Phase 1 clinical trial of agenT-797 in viral acute respiratory distress syndrome ("ARDS") and reported an encouraging survival benefit of 70%, compared to ~10-22% in an in-hospital control and time-matched data from the Centers for Disease Control and Prevention. These data were presented at Society of Immunotherapy for Cancer ("SITC") 2022, and an update from the trial will be presented at the American Thoracic Society International Conference in May 2023. There are currently no approved therapies for ARDS; our data contribute favorably as a potential therapeutic and we plan to advance agenT-797 in viral ARDS through strategic collaborations and non-dilutive external financing. Discussions are underway.
In addition, we completed a Phase 1 clinical trial of agenT-797 for the treatment of multiple myeloma and reported at SITC in 2022 that agenT-797 was tolerable to a billion cells/dose and suppressed biomarkers associated with disease progression. This proof of concept phase 1 underscores the potential application of INKT cells in multiple myeloma and we believe supports the advancement of our armored B cell maturation antigen ("BCMA")-CAR-INKT program as a potential best in class next generation allogeneic BCMA cell therapy for these patients. Strategic discussions to advance this program are underway.
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We are also advancing a pipeline of next-generation allogeneic, engineered iNKT programs. Our two most advanced engineered programs are (1) MiNK-215, an IL-15 armored tumor stromal targeting FAP-CAR-iNKT and (2) MiNK-413, an IL-15 armored CAR-iNKT program targeting BCMA program. MiNK-413 has demonstrated tumor clearance and improved persistence in preclinical models, as well as manufacturing and logistical improvements over current BCMA cell therapies. MiNK-215 has demonstrated efficacy in NSCLC and melanoma preclinical models, promoting curative responses, eliminating tumor burden in the lungs, and enhancing tumor specific CD8+ T cell infiltration through tumor stroma. These data and programs were presented at SITC in 2022. These programs are both in preclinical development with investigational new drug application enabling activities underway in 2023.
Our research and development (“R&D”) expenses for the three months ended March 31, 2023 and 2022 were $4.2 million and $5.3 million, respectively. We have incurred losses since our inception. As of March 31, 2023, we had an accumulated deficit of $116.6 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 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. 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) securing debt financing and/or (3) selling equity securities. If additional funding is not obtained through these sources, our parent company has indicated a willingness to loan certain funds to us to finance our operations.
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Historical Results of Operations
Three Months Ended March 31, 2023 Compared to the Three Months Ended March 31, 2022
Research and development expense
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 decreased 21% to $4.2 million for the three months ended March 31, 2023 from $5.3 million for the three months ended March 31, 2022. This decrease is primarily due to decreased costs associated with the timing of our clinical trials and decreased costs associated with allocated Agenus services. These decreases were partially offset by increased personnel costs associated with increased headcount.
General and administrative expense
General and administrative (“G&A”) expense consists primarily of personnel costs, facility expenses, and professional fees. G&A expense decreased 21% to $1.7 million for the three months ended March 31, 2023 from $2.1 million for the three months ended March 31, 2022. This decrease is primarily due to decreased professional fees, primarily attributable decreased legal, strategy, audit and tax and insurance fees, and decreased costs associated with allocated Agenus services. These decreases were partially offset by increased personnel costs, including stock-based compensation expense, associated with increased headcount.
Interest income (expense), net
Interest income for the three months ended March 31, 2023 was $168,000 due to interest earned on our money market funds. Interest expense for the three months ended March 31, 2022 was de minimis.
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 years ended December 31, |
|
||||||
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|||
Payroll and personnel costs |
|
$ |
1,707,112 |
|
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