Monopar Therapeutics Inc. — Q2 2019 Form 10-Q
Reporting period: Three and six months ended June 30, 2019. Monopar is a clinical-stage biopharmaceutical company developing oncology therapies. It had no approved products and generated no revenue.
Financial performance and position
| Metric | Q2 2019 | Q2 2018 | Six months 2019 | Six months 2018 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development | $329,294 | $492,647 | $1,164,894 | $949,788 |
| General and administrative | $602,815 | $347,350 | $1,174,524 | $787,469 |
| Total operating expenses | $932,109 | $839,997 | $2,339,418 | $1,737,257 |
| Net loss | $905,700 | $820,939 | $2,281,935 | $1,697,287 |
| Basic and diluted loss per share | $0.10 | $0.09 | $0.25 | $0.18 |
| Net cash used in operations | Not separately reported | Not separately reported | $1,735,707 | $1,561,712 |
Balance sheet at June 30: Cash and cash equivalents were $5.13 million; current assets were $5.60 million; current liabilities were $468,272; total liabilities were $468,272; and stockholders’ equity was $5.13 million. No debt is reported on the balance sheet. Accumulated deficit was $23.94 million. Cash declined $1.76 million from year-end 2018. The filing reports no meaningful gross or operating margins because there was no revenue.
Changes versus the prior comparable period
- Q2 net loss increased by about $85,000 year over year; first-half net loss increased by about $585,000.
- Q2 R&D expense decreased about $164,000, mainly reflecting lower clinical-trial planning costs and lower R&D compensation, partly offset by Validive trial-material costs and stock compensation. First-half R&D increased about $215,000, chiefly due to Validive Phase 3 preparation and manufacturing costs.
- G&A rose $256,000 in Q2 and $388,000 in the first half. The filing attributes increases primarily to stock-based compensation, audit fees, board fees, and compensation.
- First-half operating cash use increased about $174,000 year over year. First-half 2019 financing cash use of $26,177 reflected deferred offering costs.
Pipeline, outlook, and risks
- Validive: The company planned to begin a Phase 3 program in Q4 2019 following FDA and EMA feedback. The planned program included an adaptive trial with an interim analysis about 12 months after the first patient is dosed, followed by a confirmatory trial. Validive had U.S. Fast Track and EU orphan-drug designations. The company said significant additional funding would be needed for development.
- Camsirubicin: A June 2019 collaboration with GEIS provides for a randomized, open-label Phase 2 comparison against doxorubicin in about 170 advanced soft-tissue-sarcoma patients, with enrollment expected in early 2020. Monopar expected to provide study drug and financial support averaging approximately $1 million to $2 million annually. The company reported that a prior Phase 2 study showed clinical benefit in 52.6% of patients; this is company-reported data, not a result of the planned GEIS trial.
- MNPR-101: The pre-IND antibody program’s IND-enabling work was described as nearly complete.
- Liquidity and funding: Management estimated available resources would fund minimum or minimal required operations through September 2020 and reported no substantial doubt about going concern. The estimate is subject to assumptions; the company anticipated rising expenses from Q4 2019 and onward and expected to seek capital through equity, debt, collaborations, or grants. Financing could dilute shareholders or require concessions.
- Commitments and contingencies: Validive’s Onxeo license includes potential development and commercial milestones of up to $108 million and royalties of 5%–10%; no milestones had been reached. MNPR-101’s XOMA agreement includes potential milestones up to $14.925 million; none had been reached. No material legal proceedings were reported. The company reported no clinical trials in progress during the periods presented.
- The company expects operating losses and R&D and G&A expenses to increase. Development, regulatory, clinical, manufacturing, financing, competitive, and intellectual-property risks could affect timing, costs, and the ability to advance candidates. The filing reported effective disclosure controls and no material changes in internal control over financial reporting.
Important facts for investors to verify
- Whether the September 2020 minimum-operations runway remains adequate once planned Validive and camsirubicin trial costs are included.
- Whether the Validive Phase 3 program began as planned, and the resulting protocol, enrollment, timing, and funding requirements.
- GEIS trial start, budget, enrollment, and any updated camsirubicin efficacy or safety data.
- Future financing needs and potential dilution, as well as the timing and size of the deferred offering costs.
- The scope and timing of potential Onxeo and XOMA milestones, and the company’s reported ownership structure and related-party arrangements.