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Molecular Templates, Inc. Reports Third Quarter 2018 Financial Results and Provides Corporate Update

AUSTIN, Texas, Nov. 13, 2018 (GLOBE NEWSWIRE) — Molecular Templates, Inc. (Nasdaq: MTEM, “Molecular” or “Molecular Templates”), a clinical-stage oncology company focused on the discovery and development of the company’s proprietary engineered toxin bodies (ETBs), which are differentiated, targeted, biologic therapeutics for cancer, today reported financial results for the third quarter of 2018. As of September 30, 2018, Molecular’s cash and cash equivalents totaled $78.7 million, this does not include $30 million received from Takeda in October 2018. Molecular’s current cash balance is expected to fund operations into 1H 2021.

“Our recently announced CD38 collaboration with Takeda enables the development of TAK-169, the most potent ETB we have created with our platform to date. Importantly, the upfront payment from Takeda and the equity financing that we closed in September provide the funding to allow us to generate clinical data from multiple pipeline candidates throughout 2019 and beyond,” said Eric Poma, Ph.D., Molecular Templates’ Chief Executive and Scientific Officer. “In 2019, our lead program MT-3724 will be in multiple Phase II studies and we expect to start clinical trials for three additional ETBs targeting CD38, HER2, and PD-L1.”

Company Highlights and Upcoming Milestones

Corporate

TAK-169

MT-3724

Research

Takeda Multi-Target Collaboration

Financial Results

The net loss attributable to common shareholders for the third quarter of 2018 was $5.2 million, or ($0.19) per basic and diluted share. This compares with a net loss attributable to common shareholders of $11.1 million, or ($0.62) per basic and diluted share, for the same period in 2017. 

Revenues for the third quarter of 2018 were $6.8 million, compared to $0.6 million for the same period in 2017. Revenues for the third quarter of 2018 were comprised of grant revenue from the Cancer Prevention & Research Institute of Texas, and revenues from collaborative research and development agreements. Total research and development expenses for the third quarter of 2018 were $8.3 million, compared with $2.5 million for the same period in 2017. Total general and administrative expenses for the third quarter of 2018 were $3.5 million, compared with $4.0 million for the same period in 2017. 

The net loss attributable to common shareholders for the nine months ended September 30, 2018 was $23.7 million, or ($0.87) per basic and diluted share. This compares with a net loss attributable to common shareholders of $17.2 million, or ($2.75) per basic and diluted share, for the same period in 2017. 

Revenues for the nine months ended September 30, 2018 were $8.6 million, compared to $2.6 million for the same period in 2017. Revenues for the nine months ended September 30, 2018 were comprised of grant revenue from the Cancer Prevention & Research Institute of Texas, and revenues from collaborative research and development agreements. Total research and development expenses for the nine months ended September 30, 2018 were $22.6 million, compared with $4.8 million for the same period in 2017. Total general and administrative expenses for the nine months ended September 30, 2018 were $10.2 million, compared with $8.2 million for the same period in 2017. 

About Molecular Templates
Molecular Templates is a clinical-stage oncology company focused on the discovery and development of differentiated, targeted, biologic therapeutics for cancer. We believe our proprietary biologic drug platform technology, referred to as engineered toxin bodies, or ETBs, provides a differentiated mechanism of action that may address some of the limitations associated with currently available cancer therapeutics. ETBs utilize a genetically engineered form of Shiga-like Toxin A subunit, or SLTA, a ribosome inactivating bacterial protein, that can be targeted to specifically destroy cancer cells.  Additional information about Molecular Templates can be obtained at http://www.mtem.com.

Forward-Looking Statements
This press release contains forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995 (the “Act”). Molecular Templates disclaims any intent or obligation to update these forward-looking statements, and claims the protection of the Act’s Safe Harbor for forward-looking statements.  All statements, other than statements of historical facts, included in this press release regarding strategy, future operations, future financial position, future revenue, projected expenses, prospects, plans and objectives of management are forward-looking statements. In addition, when or if used in this press release, the words “may,” “could,” “should,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “predict” and similar expressions and their variants, as they relate to Molecular Templates may identify forward-looking statements.  Examples of such statements include, but are not limited to, statements relating to the development of the Company’s lead program, MT-3724; the expected timing of submitting various IND applications and initiating studies; and the Company’s belief that its proprietary biologic drug platform technology, or ETBs, provides for a differentiated mechanism of action that may address some of the limitations associated with currently available cancer therapeutics.

Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors including, but not limited to, the uncertainties inherent in the preclinical and clinical development process; whether the Company’s cash resources will be sufficient to fund its continuing operations for the periods and/or trials anticipated; the ability of the Company to protect its intellectual property rights; and legislative, regulatory, political and economic developments, as well as those risks identified under the heading “Risk Factors” in the Company’s filings with the SEC. Any forward-looking statements contained in this press release speak only as of the date hereof, and the Company specifically disclaims any obligation to update any forward-looking statement, whether because of new information, future events or otherwise.

Contact:
Adam Cutler
Chief Financial Officer
adam.cutler@mtem.com
862-204-4006

Molecular Templates, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)

  10-Q
Three Months Ended

September 30,
    10-Q
Nine Months Ended

September 30,
  2018     2017     2018     2017
Research and development revenue $ 2,031     $ 648     $ 3,206     $ 2,408  
Grant revenue   4,721             5,395       167  
Total revenue   6,752       648       8,601       2,575  
Operating expenses:                              
Research and development   8,290       2,522       22,640       4,829  
General and administrative   3,538       3,996       10,165       8,233  
Total operating expenses   11,828       6,518       32,805       13,062  
Loss from operations   5,076       5,870       24,204       10,487  
Interest and other income, net   107       1       307       2  
Interest expense   (279 )     (107 )     (672 )     (752 )
Change in fair value of warrant liabilities   4       (272 )     916       (269 )
Loss on conversion of notes         (4,719 )           (4,719 )
Net loss   5,244       10,967       23,653       16,225  
Deemed dividends on preferred stock         (138 )           (958 )
Net loss attributable to common shareholders $ 5,244     $ 11,105     $ 23,653     $ 17,183  
Net loss per share attributable to common shareholders:                              
Basic and diluted $ 0.19     $ 0.62     $ 0.87     $ 2.75  
Weighted average number of shares used in net loss per share calculations:                              
Basic and diluted   27,680,307       17,925,585       27,246,667       6,241,947  
 

Molecular Templates, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

  September 30,
2018 (unaudited)
    December 31,
2017
ASSETS            
Current assets:            
Cash and cash equivalents $ 78,744     $ 58,910
Prepaid expenses   2,535       1,485
Accounts receivable from related party   31,163      
Other current assets   4,385       19
Total current assets   116,827       60,414
Property and equipment, net   7,165       1,952
In-process research and development   26,623       26,623
Other assets   1,345       1,402
Total assets $ 151,960     $ 90,391
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Current liabilities:            
Accounts payable $ 1,630     $ 2,517
Accrued liabilities   6,595       2,690
Current portion of long-term debt         2,400
Deferred revenue   33,400       2,765
Other current liabilities   106       70
Total current liabilities   41,731       10,442
Warrant liabilities   38       954
Long-term debt, net   3,155       1,078
Other liabilities   844       628
Total liabilities   45,768       13,102
Total stockholders’ equity   106,192       77,289
Total liabilities and stockholders’ equity $ 151,960     $ 90,391