MediciNova(MNOV) - 2020 Q1 - Quarterly Report

Financial Performance - Total current assets decreased from $64.3 million as of December 31, 2019, to $62.2 million as of March 31, 2020, a decline of approximately 3.3%[17] - Operating expenses for the three months ended March 31, 2020, were $2.9 million, down 41.2% from $5.0 million for the same period in 2019[19] - The net loss applicable to common stockholders for Q1 2020 was $2.7 million, compared to a net loss of $4.7 million in Q1 2019, representing a reduction of 42.2%[19] - Cash and cash equivalents at the end of Q1 2020 were $61.3 million, down from $63.8 million at the end of 2019, a decrease of 3.9%[25] - Total stockholders' equity decreased from $74.9 million as of December 31, 2019, to $73.2 million as of March 31, 2020, a decline of approximately 2.3%[17] - The company’s total liabilities decreased from $4.3 million at the end of 2019 to $3.8 million at the end of Q1 2020, a reduction of about 11.5%[17] - The company reported a basic and diluted net loss per common share of $0.06 for Q1 2020, an improvement from $0.11 in Q1 2019[19] - Net cash used in operating activities was $2.9 million in Q1 2020 compared to $3.0 million in Q1 2019, reflecting net loss and changes in operating assets and liabilities[81] - Net cash provided by financing activities was $0.4 million in Q1 2020, primarily from the sale of 68,952 shares of common stock, compared to $3.9 million in Q1 2019 from the exercise of options[82] Research and Development - Research and development costs totaled $1.2 million for Q1 2020, compared to $1.5 million for Q1 2019, reflecting a decrease of 20%[34] - Research, development, and patents expenses decreased from $1.6 million in Q1 2019 to $1.3 million in Q1 2020, a reduction of $0.3 million due to lower stock compensation expenses[79] - The company’s strategy focuses on developing therapeutics for serious diseases, including MN-166 for neurological disorders and MN-001 for fibrotic diseases[28] - The company intends to advance the development of MN-166 (ibudilast) for multiple neurological disorders and MN-001 (tipelukast) for fibrotic diseases through various funding sources[63] - The company plans to pursue strategic partnerships with leading pharmaceutical companies to support the clinical development and commercialization of its products[64] COVID-19 Impact - The company does not expect any material impact on its long-term development timeline and liquidity due to COVID-19[37] - The company is actively monitoring the impact of COVID-19 on its business, with uncertainty regarding its effects on financial condition and operations[65] - The COVID-19 pandemic has created significant volatility and disruption in financial markets, potentially impacting the company's financial condition and product development timelines[100] Stock and Equity - The company raised $412.7 thousand from the issuance of common stock and other equity awards in Q1 2020, compared to $3.9 million in Q1 2019[25] - For the three months ended March 31, 2020, total stock-based compensation expense was $596,378, a decrease of 77.9% compared to $2,699,500 for the same period in 2019[50] - As of March 31, 2020, there were 215,957 shares available for future issuance under the Employee Stock Purchase Plan (ESPP)[49] - The company had 7,638,250 potentially dilutive outstanding securities excluded from diluted net loss per common share due to their anti-dilutive effect for the three months ended March 31, 2020[57] - The company has 1,448,135 shares remaining available for future grants under the 2013 Equity Incentive Plan as of March 31, 2020[43] Financial Position - Cash equivalents, including money market accounts, were valued at $693,794 as of March 31, 2020[42] - The company had cash and cash equivalents of $61.3 million and working capital of $60.4 million as of March 31, 2020, sufficient to fund operations at least through the end of 2021[87] - The company did not have any off-balance sheet arrangements or relationships with unconsolidated entities as of March 31, 2020, mitigating exposure to financing, liquidity, market, or credit risk[88] - A hypothetical 100 basis point adverse move in interest rates would not materially affect the fair value of the company's interest-rate sensitive financial instruments due to their short-term nature[89] - Cash and cash equivalents were primarily invested in money market interest-bearing accounts and funds, with a hypothetical 10% adverse change in average interest rates having no material effect on net loss for the three months ended March 31, 2020[90] Internal Controls and Legal Matters - The company maintains effective disclosure controls and procedures, providing reasonable assurance that required information is recorded and reported timely[94] - There have been no changes in internal control over financial reporting that materially affected the company's controls during the most recent fiscal quarter[95] - The company is not involved in any material legal proceedings as of March 31, 2020, but may face disputes in the ordinary course of business[98] - The company assessed the collaboration agreement with Kissei Pharmaceutical Co., Ltd. and recognized no revenue for the three months ended March 31, 2020[41] - The company has incurred no revenue from the collaboration agreement with Kissei Pharmaceutical Co., Ltd. for the three months ended March 31, 2020[66] - The company adopted ASU 2018-13 on January 1, 2020, with no material impact on its consolidated financial statements[39]