EXHIBIT 99.1

Molecular Templates, Inc. Reports Third Quarter 2020 Financial Results and Provides a Corporate Update

AUSTIN, Texas, Nov. 05, 2020 (GLOBE NEWSWIRE) -- Molecular Templates, Inc. (Nasdaq: MTEM, “Molecular Templates,” “MTEM” or “the Company”), a clinical-stage biopharmaceutical company focused on the discovery and development of proprietary targeted biologic therapeutics, engineered toxin bodies (ETBs), today reported financial results for the third quarter of 2020 and an update on its clinical pipeline.

On November 4, 2020, the U.S. Food and Drug Administration (FDA) notified MTEM that MT-3724 clinical studies have been placed on partial clinical hold following a treatment-related fatality in one subject who experienced Grade 5 capillary leak syndrome (CLS) in the Phase 2 MT-3724 monotherapy study. This subject and four others in the Phase 2 monotherapy study who were treated with material from the same MT-3724 product lot had markedly higher than expected peak drug exposure (Cmax). Subjects already enrolled in MT-3724 clinical studies will continue to be dosed but no new patients will be enrolled until the partial hold is removed. There are no changes to the trials or plans for other ETB product candidates, including MT-5111, TAK-169, and MT-6402, all of which utilize a next-generation ETB scaffold that has been designed to reduce or eliminate the propensity for innate immunity, including CLS.

“We are saddened to report the patient death in our MT-3724 monotherapy study. We are committed to working with the FDA to fulfill their information requests, resolve the partial clinical hold, and to resume enrollment of the affected MT-3724 clinical trials as quickly as possible,” said Eric Poma, Ph.D., Molecular Templates’ Chief Executive and Chief Scientific Officer. “In the meantime, our other ETB programs, which are built on our proprietary, next generation de-immunized toxin scaffold with a simplified manufacturing process, are continuing as planned with study updates expected in late 2020 and into 2021.”

Company Highlights, Pipeline Status, and Upcoming Milestones

MT-3724 (CD20 ETB)

TAK-169 (CD38 ETB)

MT-5111 (HER2 ETB)

Research

COVID-19 Impact

Details on MT-3724 Update

On November 4, 2020, the FDA notified MTEM that MT-3724 clinical studies have been placed on partial clinical hold following a fatality in one subject in the Phase 2 monotherapy study due to treatment-related capillary leak syndrome (CLS) on October 20, 2020. The fatality occurred in a diffuse large B-cell lymphoma (DLBCL) subject who had been treated with six prior lines of therapy including rapid progression through three lines of therapy in the six months prior to MT-3724 dosing (including most recently a first generation anti-CD19 CAR T-cell). The subject had transformed DLBCL from Waldenstrom’s Macroglobulinemia and came onto the MT-3724 study with a CD4/CD8 T-cell ratio of 0.47. The subject did not have a radiographic assessment of response but an elevated LDH was thought by the principal investigator to represent disease progression. The subject initially had Grade 2 CLS following treatment with MT-3724, recovered after a dosing interruption, resumed dosing and then had CLS that was ultimately fatal. While Grade 1 and 2 CLS is an expected potential adverse reaction of MT-3724, this was the only subject in any MT-3724 study to date with CLS that was more severe than Grade 2.

In addition, markedly higher than expected peak drug exposure (Cmax) was observed in five of the last six subjects enrolled in the monotherapy study, including the subject with the fatal CLS. All of these subjects had been treated with drug product from the same lot of MT-3724 and while the other four subjects with higher than predicted exposure exhibited signs or symptoms of innate immunity, none experienced any unexpected serious adverse events. This lot of drug product met all specifications for drug product release as well as its ongoing stability testing specifications. MTEM is investigating the higher than expected drug exposure findings to determine if this was caused by an issue with this specific lot of MT-3724.

MTEM is working to address the clinical and MT-3724 product lot information requests from the FDA and will then seek agreement from FDA to remove the partial clinical hold. In the meantime, no new patients will be enrolled in any MT-3724 study. MTEM’s trials and plans for its other ETB product candidates, including MT-5111, TAK-169, and MT-6402, which utilize next-generation ETB technology, are not affected. Next-generation ETB scaffolds have been designed to reduce or eliminate the propensity for innate immunity or CLS; no cases of CLS have been observed in human subjects who have been dosed with any next-generation ETBs.

Financial Results

The net loss attributable to common shareholders for the third quarter of 2020 was $23.2 million, or $0.47 per basic and diluted share. This compares with a net loss attributable to common shareholders of $38.2 million, or $1.03 per basic and diluted share, for the same period in 2019.

Revenues for the third quarter of 2020 were $4.3 million, compared to $3.6 million for the same period in 2019. Revenues for the third quarter of 2020 were comprised of revenues from collaborative research and development agreements with Takeda and Vertex. Total research and development expenses for the third quarter of 2020 were $19.6 million, compared with $15.2 million for the same period in 2019. Total general and administrative expenses for the third quarter of 2020 were $7.5 million, compared with $4.5 million for the same period in 2019.

As of September 30, 2020, MTEM’s cash and investments totaled $118.2 million, which is expected to fund operations into 2H22.

About Molecular Templates

Molecular Templates is a clinical-stage company focused on the discovery and development of targeted biologic therapeutics. Our proprietary drug platform technology, known as engineered toxin bodies, or ETBs, leverages the resident biology of a genetically engineered form of Shiga-like Toxin A subunit to create novel therapies with potent and differentiated mechanisms of action for cancer and other serious diseases.

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 potential lifting of the partial clinical hold on the Company’s MT-3724 clinical trials, our investigation into our pharmacokinetic findings in our MT-3724 monotherapy study and potential plans for our MT-3724 studies, statements regarding the safety or potential efficacy of the Company’s drug or biologic candidates, statements relating to the development of the MT-3724, MT-5111, TAK-169, and MT-6402; our utilization of a next-generation ETB scaffold that has been designed to reduce or eliminate the propensity for innate immunity, including CLS; the expected timing of submitting various IND applications and conducting studies; the expected participation and presentation at upcoming medical conferences; the anticipated effects of the COVID-19 pandemic on the Company’s ongoing clinical studies, manufacturing and preclinical development; 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 risks associated with the Company’s ability to satisfactorily respond to requests from the FDA for further information and data regarding MT-3724 on the timeline expected or at all; successfully resolve the partial clinical hold with regard to MT-3724; 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; risks from global pandemics including COVID-19; 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)
 
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2020  2019  2020  2019 
Research and development revenue, related party$1,566 $2,903 $4,962 $14,527 
Research and development revenue, other 2,732  284  7,176  284 
Grant revenue   431  3,210  1,262 
Total revenue 4,298  3,618  15,348  16,073 
Operating expenses:       
Research and development 19,622  15,249  70,667  33,946 
General and administrative 7,547  4,509  19,606  14,049 
Loss on impairment of in-process research and development   22,123    22,123 
Total operating expenses 27,169  41,881  90,273  70,118 
Loss from operations 22,871  38,263  74,925  54,045 
Interest and other income, net 167  396  925  1,449 
Interest and other expense, net (521) (353) (1,229) (947)
Loss on extinguishment of debt     (1,237)  
Change in fair value of warrant liabilities   1    3 
Loss before provision for income taxes 23,225  38,219  76,466  53,540 
Provision for income taxes     5   
Net loss 23,225  38,219  76,471  53,540 
Net loss attributable to common shareholders$23,225 $38,219 $76,471 $53,540 
Net loss per share attributable to common shareholders:       
Basic and diluted$0.47 $1.03 $1.63 $1.45 
Weighted average number of shares used in net loss per share calculations:       
Basic and diluted 49,026,499  36,937,912  46,808,437  36,832,966 
             


Molecular Templates, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
 
 September 30,
2020 (unaudited)
 December 31,
2019
ASSETS   
Current assets:   
Cash and cash equivalents$33,410 $85,451 
Marketable securities, current 82,816  39,633 
Prepaid expenses 4,889  2,318 
Grants revenue receivable 3,490  7,100 
Accounts receivable, related party 301  408 
In-process research and development - held for sale 4,500  4,500 
Other current assets 249  489 
Total current assets 129,655  139,899 
Marketable securities, non-current 2,000  1,510 
Operating lease right-of-use assets, non-current 11,589  9,959 
Property and equipment, net 20,889  18,158 
Other assets 5,244  4,676 
Total assets$169,377 $174,202 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$2,565 $1,465 
Accrued liabilities 13,231  14,544 
Deferred revenue, current 12,496  8,511 
Deferred revenue, current, related party 4,566  8,780 
Other current liabilities, related party 5,498   
Other current liabilities 2,041  2,501 
Total current liabilities 40,397  35,801 
Deferred revenue, long-term 7,785  18,944 
Deferred revenue, long-term, related party 935  441 
Long-term debt, net 14,822  2,940 
Operating lease liabilities, non-current 12,828  11,682 
Other liabilities, related party 6,711   
Other liabilities 1,458  1,366 
Total liabilities 84,936  71,174 
Commitments and contingencies (Note 10)   
Stockholders’ equity   
Preferred stock, $0.001 par value:   
Authorized: 2,000,000 shares at September 30, 2020 and December 31, 2019;
 issued and outstanding: 250 shares at September 30, 2020 and December 31, 2019
    
Common stock, $0.001 par value:   
Authorized: 150,000,000 shares at September 30, 2020 and December 31, 2019;
 issued and outstanding: 49,963,732 shares at September 30, 2020 and 45,589,157 shares at December 31, 2019
 50  46 
Additional paid-in capital 324,914  267,089 
Accumulated other comprehensive income 73  18 
Accumulated deficit (240,596) (164,125)
Total stockholders’ equity 84,441  103,028 
Total liabilities and stockholders’ equity$169,377 $174,202