MediciNova(MNOV) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Presents MediciNova's unaudited condensed consolidated financial statements and management's analysis of financial condition ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Presents MediciNova's unaudited condensed consolidated financial statements, detailing balance sheets, operations, equity, cash flows, and related accounting notes Condensed Consolidated Balance Sheets Provides a snapshot of the company's assets, liabilities, and equity at specific reporting dates | Metric | June 30, 2025 (USD) | December 31, 2024 (USD) | | :-------------------------------- | :------------------ | :---------------------- | | Cash and cash equivalents | $34,259,637 | $40,359,738 | | Total current assets | $35,123,834 | $41,074,279 | | Total assets | $49,823,875 | $55,875,926 | | Total current liabilities | $2,648,176 | $2,959,123 | | Total liabilities | $2,967,006 | $3,372,375 | | Total stockholders' equity | $46,856,869 | $52,503,551 | - Cash and cash equivalents decreased by approximately $6.1 million from December 31, 2024, to June 30, 2025[16] Condensed Consolidated Statements of Operations and Comprehensive Loss Details the company's revenues, expenses, and net loss over specific reporting periods | Metric (Three months ended June 30) | 2025 (USD) | 2024 (USD) | | :---------------------------------- | :------------ | :------------ | | Revenues | $134,599 | $0 | | Operating expenses | $3,741,691 | $3,046,496 | | Operating loss | $(3,607,092) | $(3,046,496) | | Net loss | $(3,281,185) | $(2,628,200) | | Basic and diluted net loss per share| $(0.07) | $(0.05) | | Metric (Six months ended June 30) | 2025 (USD) | 2024 (USD) | | :---------------------------------- | :------------ | :------------ | | Revenues | $134,599 | $0 | | Operating expenses | $6,944,201 | $6,182,489 | | Operating loss | $(6,809,602) | $(6,182,489) | | Net loss | $(6,145,305) | $(5,382,718) | | Basic and diluted net loss per share| $(0.13) | $(0.11) | - Revenues increased to $0.13 million for both the three and six months ended June 30, 2025, from zero in the prior year periods, primarily due to a new agreement with Mayo Foundation for Medical Education and Research[17][79][84] - Net loss increased for both the three-month and six-month periods ended June 30, 2025, compared to 2024, driven by higher operating expenses, particularly in research, development, and patents[17][81][86] Condensed Consolidated Statements of Stockholders' Equity Outlines changes in the company's equity due to net loss, share-based compensation, and other transactions | Metric (Six Months Ended June 30) | 2025 (USD) | 2024 (USD) | | :-------------------------------- | :------------ | :------------ | | Balance at December 31 | $52,503,551 | $62,378,424 | | Share-based compensation | $490,840 | $422,885 | | Net loss | $(6,145,305) | $(5,382,718) | | Balance at June 30 | $46,856,869 | $57,405,154 | - Total stockholders' equity decreased from $52.5 million at December 31, 2024, to $46.9 million at June 30, 2025, primarily due to the net loss incurred during the period[19] Condensed Consolidated Statements of Cash Flows Reports the cash inflows and outflows from operating, investing, and financing activities | Metric (Six months ended June 30) | 2025 (USD) | 2024 (USD) | | :-------------------------------- | :------------ | :------------ | | Net cash used in operating activities | $(6,090,067) | $(6,679,178) | | Net cash used in investing activities | $0 | $(891) | | Effect of exchange rate changes | $(10,034) | $18,451 | | Net change in cash and cash equivalents | $(6,100,101) | $(6,661,618) | | Cash and cash equivalents, end of period | $34,259,637 | $44,337,824 | - Net cash used in operating activities decreased by $0.6 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to changes in operating assets and liabilities[22][89] Notes to Condensed Consolidated Financial Statements Provides detailed explanations of accounting policies, significant transactions, and financial statement items - MediciNova, Inc. is a biopharmaceutical company focused on developing novel therapeutics for serious diseases with unmet medical needs, primarily MN-166 (ibudilast) for neurological disorders and MN-001 (tipelukast) for fibrotic and metabolic disorders[25][68] - The company has incurred net losses since its inception and expects to continue incurring substantial net losses as it advances its clinical trial programs[28][69] 1. Interim Financial Information Outlines the company's business focus, financial statement basis, liquidity, and key accounting policies - MediciNova's primary development focus is on MN-166 (ibudilast) for neurological disorders and MN-001 (tipelukast) for fibrotic and metabolic disorders[25][68] - The company had $34.3 million in cash and cash equivalents as of June 30, 2025, and believes it has sufficient cash for at least the next 12 months, but expects to require additional capital for future clinical trial programs[28][90] - The company operates in a single operating segment: the acquisition and development of small molecule therapeutics for serious diseases with unmet medical needs[30] 2. Revenue Recognition Details the company's revenue recognition policy, primarily from R&D services, including a new Mayo agreement - MediciNova recognized $0.1 million in revenue for the three and six months ended June 30, 2025, from an agreement with Mayo Foundation for Medical Education and Research to support clinical research services for MN-166 (ibudilast) in ALS[42][79][84] 3. Fair Value Measurements Describes the fair value hierarchy for financial instruments, classifying mutual funds as Level 1 | Financial Instrument | June 30, 2025 (Carrying Amount USD) | June 30, 2025 (Fair Value USD) | December 31, 2024 (Carrying Amount USD) | December 31, 2024 (Fair Value USD) | Valuation Inputs | | :------------------- | :---------------------------------- | :----------------------------- | :-------------------------------------- | :------------------------------- | :--------------- | | Mutual funds | $31,972,516 | $31,972,516 | $21,501,081 | $21,501,081 | Level 1 | 4. Commitments and Contingencies Details lease commitments, potential milestone payments, and confirms no material legal proceedings | Lease Liability Metric | June 30, 2025 (USD) | December 31, 2024 (USD) | | :--------------------- | :------------------ | :---------------------- | | Current operating lease liabilities | $184,842 | $193,769 | | Non-current operating lease liabilities | $117,038 | $211,460 | | Total operating lease liabilities | $301,880 | $405,229 | | Weighted-average remaining lease term (years) | 1.57 | 1.98 | | Weighted-average discount rate | 9.6% | 9.6% | - Future potential milestone payments for MN-166 (ibudilast) and MN-001 (tipelukast) are $10 million, with an additional $16.5 million for other products, as of June 30, 2025[48] 5. Stock-based Compensation Describes equity incentive plans, stock option activity, and recognized compensation expense | Stock Option Activity (Six months ended June 30, 2025) | Number of Option Shares | Weighted Average Exercise Price (USD) | | :----------------------------------------------------- | :---------------------- | :------------------------------------ | | Outstanding at December 31, 2024 | 7,040,894 | $5.12 | | Granted | 1,380,500 | $2.00 | | Cancelled | (512,000) | $2.84 | | Outstanding at June 30, 2025 | 7,909,394 | $4.73 | | Exercisable at June 30, 2025 | 6,678,933 | $5.22 | | Stock-based Compensation Expense (Six months ended June 30) | 2025 (USD) | 2024 (USD) | | :---------------------------------------------------------- | :---------- | :---------- | | Research, development and patents | $196,273 | $160,218 | | General and administrative | $294,567 | $262,667 | | Total stock-based compensation expense | $490,840 | $422,885 | - As of June 30, 2025, 2,025,173 shares remain available for future grants under the 2023 Plan[52] 6. Stockholders' Equity Discusses the At-The-Market (ATM) Issuance Sales Agreement and its usage - The company has an ATM Agreement allowing it to sell common stock up to an aggregate offering price of $75.0 million through B. Riley FBR, Inc[60][91] - No shares of common stock were sold under the ATM Agreement during the three and six months ended June 30, 2025, or 2024[61][92] 7. Net Loss Per Share Explains the calculation of basic and diluted net loss per share, excluding anti-dilutive options | Potentially Dilutive Stock Options Excluded | June 30, 2025 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------ | | Three months ended | 7,909,394 | 8,431,644 | | Six months ended | 7,909,394 | 8,431,644 | 8. Subsequent Events Discloses the Standby Equity Purchase Agreement (SEPA) with Yorkville for future equity sales - On July 30, 2025, MediciNova entered into a Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing the company to sell up to $30.0 million of its common stock over 36 months[64] - The SEPA includes a Nasdaq Exchange Cap, limiting the issuance to 19.99% of outstanding shares unless stockholder approval is obtained or the average price per share meets a specified threshold[64] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Provides management's perspective on MediciNova's financial condition, operational results, and strategic development goals - MediciNova's strategy focuses on advancing MN-166 (ibudilast) for multiple indications and MN-001 (tipelukast) for fibrotic and other diseases, seeking non-dilutive financings and strategic partnerships[70] - The company expects to increase research, development, and patent costs through the remainder of 2025 as development programs progress[71] Overview Introduces MediciNova's biopharmaceutical focus and accumulated deficit - MediciNova is a biopharmaceutical company focused on developing novel therapeutics for serious diseases with unmet medical needs, specifically MN-166 (ibudilast) and MN-001 (tipelukast)[68] - The company has an accumulated deficit of $432.9 million as of June 30, 2025, and anticipates substantial net losses for the next several years[69] Research, Development and Patents Expenses Details the company's expenditures on research, development, and patent activities | R&D Expense Category (Three months ended June 30) | 2025 (USD) | 2024 (USD) | | :------------------------------------------------ | :---------- | :---------- | | External development expense (MN-166) | $1,535,000 | $947,000 | | External development expense (MN-001) | $187,000 | $128,000 | | Total research, development and patent expense | $2,189,000 | $1,646,000 | | R&D Expense Category (Six months ended June 30) | 2025 (USD) | 2024 (USD) | | :------------------------------------------------ | :---------- | :---------- | | External development expense (MN-166) | $2,618,000 | $2,011,000 | | External development expense (MN-001) | $406,000 | $222,000 | | Total research, development and patent expense | $4,028,000 | $3,428,000 | - Research, development and patents expenses increased by $0.6 million for both the three and six months ended June 30, 2025, primarily due to increased MN-166 related expenses (MRC-001 PK study and DCM study) and MN-001 clinical trial expenses, partially offset by decreased MN-166 manufacturing costs and payroll[81][86] General and Administrative Expenses Reports the company's general and administrative operational costs - General and administrative expenses remained stable at $1.4 million for the three months and $2.8 million for the six months ended June 30, 2025, compared to the same periods in 2024[82][87] Critical Accounting Estimates Confirms no material changes to critical accounting policies from the prior annual report - There have been no material changes to the critical accounting policies discussed in the Annual Report on Form 10-K for the year ended December 31, 2024[76] IPR&D and Goodwill Discusses the annual impairment testing for goodwill and indefinite-lived intangible assets - Goodwill and indefinite-lived intangible assets are tested annually for impairment, with a qualitative assessment as of December 31, 2024, indicating no impairment[77][78] Results of Operations Compares financial performance for the three and six months ended June 30, 2025 and 2024 Comparison of the three months ended June 30, 2025 and 2024 Compares key financial metrics for the three-month periods, highlighting revenue and expense changes | Metric (Three months ended June 30) | 2025 (USD) | 2024 (USD) | Change (USD) | | :---------------------------------- | :------------ | :------------ | :------------ | | Revenues | $134,599 | $0 | +$134,599 | | Cost of Services | $116,349 | $0 | +$116,349 | | Research, Development and Patents | $2,188,652 | $1,646,049 | +$542,603 | | General and Administrative | $1,436,690 | $1,400,447 | +$36,243 | | Interest Income | $324,955 | $435,351 | -$(110,396) | - The increase in revenues and cost of services is attributed to the new agreement with Mayo, which began principal services in April 2025[79][80] - Interest income decreased due to a lower cash balance generating interest[83] Comparison of the six months ended June 30, 2025 and 2024 Compares key financial metrics for the six-month periods, detailing revenue and expense changes | Metric (Six months ended June 30) | 2025 (USD) | 2024 (USD) | Change (USD) | | :-------------------------------- | :------------ | :------------ | :------------ | | Revenues | $134,599 | $0 | +$134,599 | | Cost of Services | $116,349 | $0 | +$116,349 | | Research, Development and Patents | $4,028,454 | $3,427,918 | +$600,536 | | General and Administrative | $2,799,398 | $2,754,571 | +$44,827 | | Interest Income | $661,066 | $832,861 | -$(171,795) | - The increase in R&D expenses for the six-month period was primarily due to MN-166 (MRC-001 PK and DCM studies) and MN-001 clinical trial expenses, partially offset by reduced MN-166 manufacturing costs and payroll[86] Liquidity and Capital Resources Assesses the company's cash position, working capital, and ability to fund future operations - Net cash used in operating activities decreased to $6.1 million for the six months ended June 30, 2025, from $6.7 million in the prior year, mainly due to changes in operating assets and liabilities[89] - As of June 30, 2025, the company had $34.3 million in cash and cash equivalents and $32.5 million in working capital, which is believed to be sufficient to fund operations through at least August 2026[90] Equity Financing Discusses the company's At-The-Market (ATM) equity sales agreement - No shares were sold under the At-The-Market (ATM) Agreement during the three and six months ended June 30, 2025, or 2024[92] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK States that there are no applicable quantitative and qualitative disclosures about market risk for the company - The company has no applicable quantitative and qualitative disclosures about market risk[93] ITEM 4. CONTROLS AND PROCEDURES Confirms effective disclosure controls and procedures with no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[96] - There have been no material changes in internal control over financial reporting during the most recent fiscal quarter[97] PART II. OTHER INFORMATION Provides additional information including legal proceedings, risk factors, equity sales, and exhibits ITEM 1. LEGAL PROCEEDINGS States MediciNova is not involved in any material legal proceedings as of June 30, 2025 - MediciNova is not involved in any material legal proceedings as of June 30, 2025[100] ITEM 1A. RISK FACTORS Refers to previously disclosed risk factors with no material changes reported - There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[101] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Indicates no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities and use of proceeds to report[102] ITEM 3. DEFAULTS UPON SENIOR SECURITIES States there were no defaults upon senior securities to report - No defaults upon senior securities to report[102] ITEM 4. MINE SAFETY DISCLOSURES Indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[102] ITEM 5. OTHER INFORMATION Reports no officer or director trading arrangement adoptions or terminations during the quarter - No officers or directors informed the company of the adoption or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[102] ITEM 6. EXHIBITS Lists exhibits filed with the Quarterly Report, including certifications and XBRL documents - The report includes certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002[104] SIGNATURES Confirms the official signing of the report by the company's principal executive and financial officers - The report is signed by Yuichi Iwaki, M.D., Ph.D., President and Chief Executive Officer, and Jason Kruger, Chief Financial Officer, on August 14, 2025[109]