Monopar Therapeutics(MNPR) - 2019 Q1 - Quarterly Report

Part I - Financial Information Financial Statements The company reported a Q1 2019 net loss of $1.38 million with no revenue and a decrease in total assets to $6.35 million Condensed Consolidated Balance Sheets Total assets decreased to $6.35 million as of March 31, 2019, driven by a reduction in cash and cash equivalents Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2019 (unaudited) | December 31, 2018 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $5,881 | $6,893 | | Total current assets | $6,354 | $7,318 | | Total assets | $6,354 | $7,318 | | Liabilities and Equity | | | | Total current liabilities | $580 | $400 | | Total liabilities | $580 | $400 | | Total stockholders' equity | $5,774 | $6,918 | | Total liabilities and stockholders' equity | $6,354 | $7,318 | Condensed Consolidated Statements of Operations and Comprehensive Loss The company's Q1 2019 net loss increased to $1.38 million due to higher R&D and G&A operating expenses Condensed Consolidated Statements of Operations (Unaudited) | | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Revenues | $ — | $ — | | Research and development | $835,600 | $457,141 | | General and administrative | $571,709 | $440,119 | | Total operating expenses | $1,407,309 | $897,260 | | Loss from operations | ($1,407,309) | ($897,260) | | Net loss | ($1,376,235) | ($876,347) | | Net loss per share (Basic and diluted) | ($0.15) | ($0.09) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased to $5.77 million, primarily driven by the quarterly net loss of $1.38 million - The change in stockholders' equity for the quarter ended March 31, 2019 was primarily due to the net loss of $1,376,235 and non-cash stock compensation of $233,776[22] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $995,972, contributing to a total cash decrease of $1.01 million Cash Flow Summary (in thousands) | | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(996) | $(809) | | Net cash used in financing activities | $(14) | $— | | Net decrease in cash | $(1,012) | $(809) | | Cash at end of period | $5,881 | $8,973 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail the company's oncology-focused business, accounting policies, and potential future milestone payments - The company is focused on developing three main compounds: Validive® (Phase 3-ready), camsirubicin (Phase 2), and MNPR-101 (pre-IND)[27] - Management believes that currently available resources will provide sufficient funds to enable the Company to meet its minimum obligations through June 2020[29] - The company has potential future milestone payment obligations of up to $108 million to Onxeo and up to $14.925 million to XOMA Ltd[98][104] Management's Discussion and Analysis of Financial Condition and Results of Operations The analysis attributes the increased Q1 2019 net loss to higher R&D and G&A expenses for clinical trial preparations Overview The company is a clinical-stage biopharmaceutical firm with a pipeline including Validive®, camsirubicin, and MNPR-101 - The company intends to begin a Phase 3 clinical development program for its lead product candidate, Validive®, in the second half of 2019[126] - A larger, randomized Phase 2 trial of camsirubicin compared to doxorubicin is planned for patients with metastatic soft tissue sarcoma[131] - IND-enabling work for MNPR-101 is nearly complete, and the company anticipates requesting a pre-IND meeting with the FDA[132] Results of Operations The net loss increased by $500,000 year-over-year, driven by higher CRO fees and non-cash stock compensation Comparison of Operations (in thousands) | | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | Variance | | :--- | :--- | :--- | :--- | | Research and development expenses | $835 | $457 | $378 | | General and administrative expenses | $572 | $440 | $132 | | Total operating expenses | $1,407 | $897 | $510 | | Net loss | $(1,376) | $(876) | $(500) | - The increase in R&D expenses was primarily due to a $402,000 increase in CRO fees and a $134,000 increase in clinical materials manufacturing for the Validive Phase 3 trial[157] - The increase in G&A expenses was mainly attributed to higher non-cash stock-based compensation for the Board ($82,000) and employees ($42,000) following August 2018 option grants[158] Liquidity and Capital Resources With an accumulated deficit of $23.0 million, current funds are expected to cover operations through June 2020 - The company has an accumulated deficit of approximately $23.0 million as of March 31, 2019[160] - The company anticipates that funds raised to-date will fund its minimal required operations through June 2020[160] Cash Flow Summary (in thousands) | | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | Variance | | :--- | :--- | :--- | :--- | | Cash used in operating activities | $(996) | $(809) | $(187) | | Cash used in financing activities | $(14) | — | $(14) | | Net change in cash | $(1,012) | $(809) | $(203) | Future Funding Requirements Significant expense increases are expected for clinical development, necessitating additional capital beyond June 2020 - The company expects to continue incurring significant increases in expenses and operating losses for the foreseeable future[170] - Key drivers of increased future spending include advancing clinical development of Validive, camsirubicin, and MNPR-101, seeking regulatory approvals, and potentially establishing sales and marketing infrastructure[171][172] - Future cash needs will be financed through a combination of equity offerings, debt financings, strategic collaborations, and grant funding, and failure to raise additional funds could require the company to delay, limit, or terminate its development programs[175] Controls and Procedures The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2019 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2019[188] - No changes in internal control over financial reporting occurred during the three months ended March 31, 2019, that have materially affected, or are reasonably likely to materially affect, internal controls[190] Part II - Other Information Legal Proceedings The company is not currently a party to any material legal proceedings - The company is not party to any material legal proceedings[191] Risk Factors No material changes to risk factors have occurred since the last Annual Report on Form 10-K - No material changes in risk factors have occurred since the company's last Annual Report on Form 10-K[192] Exhibits Filed exhibits include required CEO/CFO certifications and XBRL interactive data files - Exhibits filed with the report include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and XBRL interactive data files (Exhibit 101 series)[195]