10-Q 1 ctmx-20220630.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-37587

 

CytomX Therapeutics, Inc.

(Exact name of Registrant as Specified in its Charter)

 

 

Delaware

 

27-3521219

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

151 Oyster Point Blvd., Suite 400

South San Francisco, CA 94080

(Address of principal executive offices, including zip code)

(650) 515-3185

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.00001 par value per share

 

CTMX

 

Nasdaq Global Select Market

Indicate by check mark whether the issuer (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. Yes ☒ No ☐

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). Yes ☒ No ☐

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

 

 

Accelerated filer

 

 

Non-accelerated filer

 

 

 

 

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

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 ☐ No

As of July 29, 2022, the registrant had 65,950,242 shares of common stock, $0.00001 par value per share, outstanding.

 

 

 


 

CYTOMX THERAPEUTICS, INC.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2022

TABLE OF CONTENTS

 

 

 

PART I – FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Condensed Financial Statements (Unaudited)

 

5

 

 

Condensed Balance Sheets

 

5

 

 

Condensed Statements of Operations and Comprehensive Loss

 

6

 

 

Condensed Statements of Stockholders’ Equity

 

7

 

 

Condensed Statements of Cash Flows

 

8

 

 

Notes to Condensed Financial Statements (Unaudited)

 

9

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

19

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

25

Item 4

 

Controls and Procedures

 

25

 

 

 

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

27

Item 1A.

 

Risk Factors

 

27

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

68

Item 3.

 

Defaults Upon Senior Securities

 

69

Item 4.

 

Mine Safety Disclosures

 

69

Item 5.

 

Other Information

 

69

Item 6.

 

Exhibits

 

70

Signatures

 

71

 

2


 

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements that involve risks and uncertainties. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

A number of important factors could cause our actual results to differ materially from those indicated in these forward-looking statements, including those factors identified in “Risk Factors” or “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or the following:

 

the extent to which the COVID-19 or any future pandemic and related governmental regulations and restrictions may impact our business, including our research, clinical trials, which include ongoing site initiation and patient enrollment, manufacturing and financial condition;

 

our expectations regarding the potential benefits, activity, effectiveness and safety of our product candidates and therapeutics developed utilizing our Probody® platform technology;

 

the initiation, timing, progress and results of our ongoing clinical trials, research and development programs, preclinical studies, and Investigational New Drug Application (“IND”), Clinical Trial Application, New Drug Application (“NDA”), Biologics License Application (“BLA”); and other regulatory submissions;

 

the timing of the completion of our ongoing clinical trials and the timing and availability of clinical data from such clinical trials;

 

our ability to identify and develop additional product candidates;

 

our dependence on collaborators for developing, obtaining regulatory approval for and commercializing product candidates in the collaboration;

 

our or a collaborator’s ability to obtain and maintain regulatory approval of any of our product candidates;

 

our receipt and timing of any milestone payments or royalties under any research collaboration and license agreements or arrangements;

 

our expectations and beliefs regarding the evolution of the market for cancer therapies and development of the immuno-oncology industry;

 

the rate and degree of market acceptance of any approved product candidates;

 

the commercialization of any approved product candidates;

 

our ability to establish and maintain collaborations and retain commercial rights for our product candidates in such collaborations;

 

the implementation of our business model and strategic plans for our business, technologies and product candidates;

 

our estimates of our expenses, ongoing losses, future revenue and capital requirements, including our estimate of cash flow savings as a result of our recently announced restructuring plan;

 

our ability to obtain additional funds for our operations;

 

our or any collaborator’s ability to obtain and maintain intellectual property protection for our technologies and product candidates and our ability to operate our business without infringing the intellectual property rights of others;

 

our reliance on third parties to conduct our preclinical studies or any future clinical trials;

 

our reliance on third-party supply and manufacturing partners to supply the materials and components for, and manufacture, our research and development, preclinical and clinical trial product supplies;

 

our ability to attract and retain qualified key management and technical personnel;

3


 

 

our ability to secure and maintain licenses of intellectual property to protect our technologies and product candidates;

 

our financial performance; and

 

developments relating to our competitors or our industry or to international conflict and uncertainties.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A. Risk Factors and discussed elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business and the markets for certain drugs and therapeutic biologics, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which these data are derived.

Except where the context otherwise requires, in this Quarterly Report on Form 10-Q, “we,” “us,” “our” and the “Company” refer to CytomX Therapeutics, Inc.

Trademarks

This Quarterly Report on Form 10-Q includes trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included in this Quarterly Report on Form 10-Q are the property of their respective owners.

4


 

PART I – FINANCIAL INFORMATION

Item 1. Condensed Financial Statements (Unaudited)

CYTOMX THERAPEUTICS, INC.

CONDENSED BALANCE SHEETS

(in thousands, except share and per share data)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

(1)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

129,290

 

 

$

205,530

 

Short-term investments

 

 

98,875

 

 

 

99,696

 

Accounts receivable

 

 

1,014

 

 

 

790

 

Prepaid expenses and other current assets

 

 

3,591

 

 

 

4,285

 

Total current assets

 

 

232,770

 

 

 

310,301

 

Property and equipment, net

 

 

5,915

 

 

 

5,960

 

Intangible assets, net

 

 

948

 

 

 

1,021

 

Goodwill

 

 

949

 

 

 

949

 

Restricted cash

 

 

917

 

 

 

917

 

Operating lease right-of-use asset

 

 

17,692

 

 

 

19,362

 

Other assets

 

 

895

 

 

 

901

 

Total assets

 

$

260,086

 

 

$

339,411

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,920

 

 

$

2,818

 

Accrued liabilities

 

 

31,732

 

 

 

34,236

 

Deferred revenue, current portion

 

 

65,787

 

 

 

69,262

 

Total current liabilities

 

 

99,439

 

 

 

106,316

 

Deferred revenue, net of current portion

 

 

95,863

 

 

 

125,660

 

Operating lease liabilities - long term

 

 

16,076

 

 

 

18,056

 

Total liabilities

 

 

211,378

 

 

 

250,032

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Convertible preferred stock, $0.00001 par value; 10,000,000 shares authorized and no shares issued and outstanding at June 30, 2022 and December 31, 2021.

 

 

 

 

 

 

Common stock, $0.00001 par value; 150,000,000 shares authorized and 65,756,492 and 65,392,758 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

631,662

 

 

 

623,344

 

Accumulated other comprehensive loss

 

 

(1,162

)

 

 

(242

)

Accumulated deficit

 

 

(581,793

)

 

 

(533,724

)

Total stockholders' equity

 

 

48,708

 

 

 

89,379

 

Total liabilities and stockholders' equity

 

$

260,086

 

 

$

339,411

 

__________________

(1)
The condensed balance sheet as of December 31, 2021 was derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

 

See accompanying notes to condensed financial statements.

5


 

CYTOMX THERAPEUTICS, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues

 

$

18,165

 

 

$

16,288

 

 

$

35,302

 

 

$

32,259

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

31,159

 

 

 

26,100

 

 

 

61,718

 

 

 

48,472

 

General and administrative

 

 

11,748

 

 

 

9,393

 

 

 

22,292

 

 

 

18,619

 

Total operating expenses

 

 

42,907

 

 

 

35,493

 

 

 

84,010

 

 

 

67,091

 

Loss from operations

 

 

(24,742

)

 

 

(19,205

)

 

 

(48,708

)

 

 

(34,832

)

Interest income

 

 

262

 

 

 

44

 

 

 

330

 

 

 

112

 

Other income (expense), net

 

 

296

 

 

 

(82

)

 

 

309

 

 

 

(77

)

Net loss

 

$

(24,184

)

 

$

(19,243

)

 

$

(48,069

)

 

$

(34,797

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on investments, net of tax

 

 

(243

)

 

 

58

 

 

 

(920

)

 

 

62

 

Comprehensive loss

 

$

(24,427

)

 

$

(19,185

)

 

$

(48,989

)

 

$

(34,735

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

$

(0.37

)

 

$

(0.30

)

 

$

(0.73

)

 

$

(0.55

)

Shares used in computing basic and diluted net loss per share

 

 

65,542,762

 

 

 

65,055,998

 

 

 

65,468,638

 

 

 

63,023,349

 

 

See accompanying notes to condensed financial statements.

6


 

CYTOMX THERAPEUTICS, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2021

 

 

65,392,758

 

 

$

1

 

 

$

623,344

 

 

$

(242

)

 

$

(533,724

)

 

$

89,379

 

Exercise of stock options

 

 

5,597

 

 

 

-

 

 

 

7

 

 

 

-

 

 

 

-

 

 

 

7

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

3,370

 

 

 

-

 

 

 

-

 

 

 

3,370

 

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(677

)

 

 

-

 

 

 

(677

)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(23,885

)

 

 

(23,885

)

Balance at March 31, 2022

 

 

65,398,355

 

 

 

1

 

 

 

626,721

 

 

 

(919

)

 

 

(557,609

)

 

 

68,194

 

Exercise of stock options

 

 

95,393

 

 

 

-

 

 

 

91

 

 

 

-

 

 

 

-

 

 

 

91

 

Issuance of common stock under the ESPP

 

 

262,744

 

 

 

-

 

 

 

360

 

 

 

-

 

 

 

-

 

 

 

360

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

4,490

 

 

 

-

 

 

 

-

 

 

 

4,490

 

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(243

)

 

 

-

 

 

 

(243

)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(24,184

)

 

 

(24,184

)

Balance at June 30, 2022

 

 

65,756,492

 

 

$

1

 

 

$

631,662

 

 

$

(1,162

)

 

$

(581,793

)

 

$

48,708

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income/(Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2020

 

 

48,251,819

 

 

$

1

 

 

$

499,964

 

 

$

(47

)

 

$

(450,115

)

 

$

49,803

 

Issuance of common stock in follow-on offering, net of issuance costs

 

 

16,428,571

 

 

 

-

 

 

 

107,712

 

 

 

-

 

 

 

-

 

 

 

107,712

 

Exercise of stock options

 

 

322,507

 

 

 

-

 

 

 

1,023

 

 

 

-

 

 

 

-

 

 

 

1,023

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

3,034

 

 

 

-

 

 

 

-

 

 

 

3,034

 

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4

 

 

 

-

 

 

 

4

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(15,554

)

 

 

(15,554

)

Balance at March 31, 2021

 

 

65,002,897

 

 

 

1

 

 

 

611,733

 

 

 

(43

)

 

 

(465,669

)

 

 

146,022

 

Exercise of stock options

 

 

68,971

 

 

 

-

 

 

 

173

 

 

 

-

 

 

 

-

 

 

 

173

 

Issuance of common stock under the ESPP

 

 

85,135

 

 

 

-

 

 

 

518

 

 

 

-

 

 

 

-

 

 

 

518

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

3,425

 

 

 

-

 

 

 

-

 

 

 

3,425

 

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

58

 

 

 

-

 

 

 

58

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(19,243

)

 

 

(19,243

)

Balance at June 30, 2021

 

 

65,157,003

 

 

$

1

 

 

$

615,849

 

 

$

15

 

 

$

(484,912

)

 

$

130,953

 

 

See accompanying notes to condensed financial statements.

7


 

CYTOMX THERAPEUTICS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(48,069

)

 

$

(34,797

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Amortization of intangible assets

 

 

73

 

 

 

73

 

Depreciation and amortization

 

 

1,139

 

 

 

1,278

 

Amortization of premium (accretion of discounts) on investments

 

 

(33

)

 

 

281

 

Stock-based compensation expense

 

 

7,860

 

 

 

6,459

 

Non-cash lease expense

 

 

1,670

 

 

 

1,534

 

Changes in operating assets and liabilities

 

 

 

 

 

 

Accounts receivable

 

 

(290

)

 

 

(133

)

Prepaid expenses and other current assets

 

 

694

 

 

 

3,199

 

Other assets

 

 

6

 

 

 

1,271

 

Accounts payable

 

 

(844

)

 

 

(1,173

)

Accrued liabilities and other long-term liabilities

 

 

(4,484

)

 

 

(5,559

)

Deferred revenue

 

 

(33,272

)

 

 

(30,572

)

Net cash used in operating activities

 

 

(75,550

)

 

 

(58,139

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,148

)

 

 

(1,096

)

Purchases of investments

 

 

-

 

 

 

(99,898

)

Maturities of investments

 

 

-

 

 

 

113,994

 

Net cash provided by (used in) investing activities

 

 

(1,148

)

 

 

13,000

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of common stock, net of issuance costs

 

 

-

 

 

 

107,712

 

Proceeds from employee stock purchase plan and exercise of stock options

 

 

458

 

 

 

1,714

 

Net cash provided by financing activities

 

 

458

 

 

 

109,426

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

(76,240

)

 

 

64,287

 

Cash, cash equivalents and restricted cash, beginning of period

 

 

206,447

 

 

 

192,776

 

Cash, cash equivalents and restricted cash, end of period

 

$

130,207

 

 

$

257,063

 

 

 

 

 

 

 

 

Supplemental disclosures of noncash investing items:

 

 

 

 

 

 

Purchases of property and equipment in accounts payable and accrued liabilities

 

$

29

 

 

$

54

 

 

See accompanying notes to condensed financial statements.

8


 

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

 

1. Description of the Business

CytomX Therapeutics, Inc. (the “Company”) is a clinical-stage, oncology-focused biopharmaceutical company dedicated to destroying cancer differently. The Company aims to build a commercial enterprise to maximize its impact on the treatment of cancer. The Company is advancing potential first-in-class and best-in-class antibody-based therapeutics created using its Probody® therapeutic technology platform that could meaningfully improve outcomes for cancer patients. Its proprietary and unique Probody technology platform is designed to enable “conditional activation” of antibody-based drugs in the tumor microenvironment while minimizing drug activity in healthy tissues and in circulation. The Company is located in South San Francisco, California and was incorporated in the state of Delaware in September 2010.

2. Basis of Presentation and Summary of Significant Accounting Policies<