Monopar Therapeutics(MNPR) - 2019 Q3 - Quarterly Report

Part I: Financial Information This section provides the company's financial statements, management's analysis of financial condition, and details on internal controls Financial Statements Monopar Therapeutics Inc. presents unaudited condensed consolidated financial statements, reporting no revenue and a net loss of $3.02 million for the nine months ended September 30, 2019 Condensed Consolidated Balance Sheet Data (Unaudited) | Account | September 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,494,540 | $6,892,772 | | Total current assets | $5,108,621 | $7,317,955 | | Total liabilities | $483,666 | $399,551 | | Total stockholders' equity | $4,624,955 | $6,918,404 | | Total liabilities and stockholders' equity | $5,108,621 | $7,317,955 | Condensed Consolidated Statements of Operations (Unaudited) | Account | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Revenues | $0 | $0 | | Research and development | $219,846 | $1,384,740 | | General and administrative | $539,602 | $1,714,126 | | Loss from operations | ($759,448) | ($3,098,866) | | Net loss | ($736,080) | ($3,018,015) | | Net loss per share (Basic and diluted) | ($0.08) | ($0.32) | Condensed Consolidated Statements of Cash Flows (Unaudited) | Account | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,348,975) | ($2,161,275) | | Net cash used in financing activities | ($39,458) | $0 | | Net decrease in cash and cash equivalents | ($2,398,232) | ($2,163,660) | | Cash and cash equivalents at end of period | $4,494,540 | $7,618,265 | Notes to Unaudited Condensed Consolidated Financial Statements These notes detail Monopar's biopharmaceutical business, accounting policies, and financial position, including an accumulated deficit of $24.7 million and key licensing agreements - The company is an emerging biopharmaceutical firm developing three main cancer drug candidates: Validive® (Phase 3-ready), camsirubicin (Phase 2), and MNPR-101 (pre-IND)[30] - As of September 30, 2019, the company has an accumulated deficit of approximately $24.7 million, with current cash expected to fund minimum obligations through December 2020, requiring additional future funding[32] - A license agreement for Validive with Onxeo S.A. includes potential milestone payments up to $108 million and royalties of 5-10%, with $1 million paid to date[97] - Monopar entered a clinical collaboration with GEIS in June 2019 for a Phase 2 camsirubicin trial, providing study drug and financial support averaging $1 million to $2 million per year[110] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Monopar's clinical-stage biopharmaceutical focus, detailing development plans for Validive® and camsirubicin, increased operating expenses, and the need for additional capital beyond December 2020 Overview Monopar is a clinical-stage biopharmaceutical company advancing Validive® (Phase 3), camsirubicin (Phase 2), and MNPR-101 (pre-IND) for cancer treatment - Lead product candidate Validive® is planned to start a Phase 3 clinical program in Q1 2020 for severe oral mucositis, holding U.S. fast track and EU orphan designations[124] - Second product candidate, camsirubicin, a doxorubicin analog, is expected to begin a Phase 2 trial in collaboration with GEIS in Q1 2020 for advanced soft tissue sarcoma[128][129] - Third product candidate, MNPR-101, a first-in-class humanized monoclonal antibody for advanced cancers, has nearly completed IND-enabling work[130] Results of Operations Total operating expenses increased to $3.1 million for the nine months ended September 30, 2019, driven by higher G&A and R&D costs, resulting in a net loss of $3.0 million Comparison of Operating Results (in thousands) | | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | Variance | | :--- | :--- | :--- | :--- | | Research and development expenses | $1,385 | $1,253 | $132 | | General and administrative expenses | $1,714 | $1,151 | $563 | | Total operating expenses | $3,099 | $2,404 | $695 | | Net loss | ($3,018) | ($2,337) | ($681) | - R&D expenses for the nine months ended Sep 30, 2019, increased by $132,000 year-over-year, primarily due to higher CRO fees for Validive Phase 3 trial preparation and employee stock-based compensation[155][156] - G&A expenses for the nine months ended Sep 30, 2019, increased by $563,000 year-over-year, mainly due to increased board and employee stock-based compensation[157][158] Liquidity and Capital Resources The company has an accumulated deficit of $24.7 million as of September 30, 2019, with available funds expected to cover minimal operations through December 2020, and increased net cash used in operating activities - The company has an accumulated deficit of approximately $24.7 million as of September 30, 2019, and anticipates continued losses[160] - Available funds as of November 12, 2019, are expected to fund minimal operations through December 2020, requiring additional capital for strategic execution[160] Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Cash used in operating activities | ($2,349) | ($2,161) | | Cash used in financing activities | ($39) | $0 | | Net change in cash | ($2,398) | ($2,164) | Future Funding Requirements The company anticipates significant expense increases for clinical programs, requiring additional capital through equity, debt, or collaborations to fund operations beyond 2020 - The company expects a significant increase in expenses and operating losses as it advances clinical development for Validive, camsirubicin, and MNPR-101[169][171] - Expenditures are expected to increase starting in Q1 2020 for the Validive Phase 3 trial, camsirubicin manufacturing, and increased employee compensation[174] - Future cash needs will be financed through equity offerings, debt financings, or strategic collaborations, potentially leading to stockholder dilution or relinquishing technology rights[175] Controls and Procedures As of September 30, 2019, the CEO and CFO concluded the company's disclosure controls and procedures were effective, with no material changes to internal controls - Management, including the CEO and CFO, concluded disclosure controls and procedures were effective as of September 30, 2019[190] - No material changes to internal control over financial reporting occurred during the nine months ended September 30, 2019[192] Part II: Other Information This section covers legal proceedings, risk factors, and exhibits filed with the quarterly report Legal Proceedings The company is not currently a party to any material legal proceedings - As of the report date, the company is not involved in any material legal proceedings[193] Risk Factors No material changes have occurred regarding the company's risk factors since the Annual Report on Form 10-K filed February 26, 2019 - No material changes have occurred regarding the company's risk factors since the last Annual Report on Form 10-K[194] Exhibits This section lists exhibits filed with the Quarterly Report, including CEO and CFO certifications and XBRL data files - The exhibits filed with this report include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and XBRL interactive data files[197]