Monopar Therapeutics(MNPR) - 2020 Q1 - Quarterly Report

Part I Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2020, detailing financial position, performance, cash flows, and notes on business, pipeline, and COVID-19's impact on the Validive trial Condensed Consolidated Balance Sheets As of March 31, 2020, total assets were $12.84 million, primarily cash, with liabilities at $0.44 million and stockholders' equity at $12.40 million Condensed Consolidated Balance Sheet Data (Unaudited) | | March 31, 2020 ($) | December 31, 2019 ($) | | :--- | :--- | :--- | | Total Current Assets | $12,716,556 | $13,229,640 | | Total Assets | $12,838,937 | $13,352,021 | | Total Current Liabilities | $443,520 | $724,165 | | Total Liabilities | $443,520 | $724,165 | | Total Stockholders' Equity | $12,395,417 | $12,627,856 | Condensed Consolidated Statements of Operations and Comprehensive Loss For Q1 2020, net loss improved to $1.09 million ($0.10 per share) from $1.38 million in Q1 2019, driven by reduced R&D expenses offsetting increased G&A costs Statement of Operations Highlights (Three Months Ended March 31) | Metric | 2020 ($) | 2019 ($) | | :--- | :--- | :--- | | Research and development | $344,407 | $835,600 | | General and administrative | $791,607 | $571,709 | | Total operating expenses | $1,136,014 | $1,407,309 | | Net loss | ($1,090,877) | ($1,376,235) | | Net loss per share | ($0.10) | ($0.15) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased to $12.40 million by March 31, 2020, primarily due to a $1.09 million net loss, partially offset by $0.53 million from common stock issuance and $0.34 million in stock-based compensation - During Q1 2020, the company issued 33,903 shares of common stock under its Capital on Demand™ Sales Agreement, raising net proceeds of $526,143 after commissions[22] Condensed Consolidated Statements of Cash Flows Q1 2020 saw $1.13 million net cash used in operations, offset by $0.51 million from financing, resulting in a $0.62 million net decrease in cash, ending at $12.59 million Cash Flow Summary (Three Months Ended March 31) | Cash Flow Activity | 2020 ($) | 2019 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,125,570) | $(995,972) | | Net cash provided by financing activities | $508,044 | $(13,855) | | Net decrease in cash and cash equivalents | $(621,567) | $(1,011,708) | | Cash and cash equivalents at end of period | $12,592,362 | $5,881,064 | Notes to Condensed Consolidated Financial Statements Notes detail Monopar's business, liquidity, and accounting policies, highlighting its three clinical programs, sufficient cash through June 2021, and COVID-19's impact on Validive trial design and significant milestone commitments - The company is a clinical-stage biopharmaceutical firm focused on cancer therapeutics with three compounds in development: Validive®, camsirubicin, and MNPR-101[28] - Due to the COVID-19 pandemic, the company modified its Validive clinical trial from a Phase 3 to a Phase 2b/3 design to enable initiation without near-term financing[30] - The company has a clinical collaboration with Grupo Español de Investigación en Sarcomas (GEIS) for a Phase 2 trial of camsirubicin, for which Monopar will provide the study drug and financial support averaging approximately $2 million to $3 million per year[99] - The license agreement for Validive with Onxeo includes potential clinical, regulatory, and sales milestones up to $108 million, plus royalties, while the license for MNPR-101 technology from XOMA Ltd. includes potential milestones up to $14.925 million[86][90] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses business, pipeline, and financing, highlighting the Validive trial's Phase 2b/3 adjustment due to COVID-19, improved Q1 2020 net loss from reduced R&D, and the need for substantial capital within 12-18 months to advance clinical programs Overview and Product Candidates Monopar, an oncology-focused biopharmaceutical company, details its lead candidate Validive® (Phase 2b/3 for SOM), camsirubicin (Phase 2 for ASTS), and MNPR-101 (pre-IND monoclonal antibody), with trial initiations planned for H2 2020 - The company adjusted its clinical plan for Validive to a Phase 2b/3 trial to allow for a near-term data readout and to initiate the trial without requiring immediate new financing[113] - A Phase 2 trial of camsirubicin, in collaboration with GEIS, will evaluate it head-to-head against doxorubicin in approximately 170 ASTS patients, with enrollment anticipated to begin in H2 2020[120] - Validive® demonstrated a 26.3% absolute reduction in SOM incidence in a prior Phase 2 trial for the 100 µg dose group[115] Results of Operations Q1 2020 net loss decreased to $1.09 million from $1.38 million in Q1 2019, driven by a $491,000 reduction in R&D expenses, despite a $220,000 increase in G&A costs due to IPO-related expenses Comparison of Operations (in thousands) | | Three Months Ended March 31, 2020 ($ in thousands) | Three Months Ended March 31, 2019 ($ in thousands) | Variance ($ in thousands) | | :--- | :--- | :--- | :--- | | Research and development expenses | $344 | $835 | $(491) | | General and administrative expenses | $792 | $572 | $220 | | Net loss | $(1,091) | $(1,376) | $285 | - The decrease in R&D expenses was mainly due to a reduction in Validive clinical trial planning and accrued material costs of approximately $531,000[130] - The increase in G&A expenses was primarily attributed to higher stock-based compensation, legal, patent, and audit fees, and other general costs of operations[131] Liquidity and Capital Resources As of March 31, 2020, the company had a $27.0 million accumulated deficit, with funds sufficient through June 2021, but requires substantial additional capital within 12-18 months for Phase 3 Validive trial and other development, to be sought via equity, debt, or collaborations - The company anticipates needing to raise additional capital in the next 12 to 18 months to fund its operations, particularly the Phase 3 portion of the Validive trial[134] - Available funds as of April 30, 2020, are expected to fund planned operations past June 2021[143] - Future funding is needed to advance clinical development for Validive, camsirubicin, and MNPR-101, and to potentially acquire or license additional drug candidates[144][145] Controls and Procedures Management, including CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2020[162] - There were no material changes in the company's internal control over financial reporting during the first quarter of 2020[164] Part II Risk Factors This section updates risk factors related to the COVID-19 pandemic, highlighting its adverse impact on stock price, fundraising ability, product manufacturing, and clinical trial conduct, potentially delaying development programs - The COVID-19 pandemic has negatively impacted the company's stock price and its ability to raise significant funds in the near-term[167][168] - The pandemic poses risks to the company's ability to manufacture product candidates and conduct clinical trials due to potential quarantines, site closures, and supply chain disruptions[168] - In response to COVID-19, the Validive trial was modified to a Phase 2b/3 design, with commencing the Phase 3 portion contingent on raising millions or tens of millions of dollars, which may be challenging in the current environment[168] Exhibits This section lists exhibits filed with the quarterly report, including CEO and CFO certifications required by Sarbanes-Oxley Act, and XBRL data files - The exhibits filed with the report include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and XBRL interactive data files[171] Signatures The report concludes with formal signatures of the company's principal executive and financial officers, as required by the Securities Exchange Act of 1934 - The report was duly signed on May 7, 2020, by Chandler D. Robinson, Chief Executive Officer, and Kim R. Tsuchimoto, Chief Financial Officer[176][177]