Monopar Therapeutics Inc. — Q3 2020 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2020; filed November 12, 2020. Monopar is a clinical-stage biopharmaceutical company with no approved products or product revenue. Its programs are Validive (Phase 2b/3 planned), camsirubicin (Phase 2 development), and preclinical MNPR-101, including a collaboration exploring radio-immunotherapeutics for severe COVID-19.
Financial performance and liquidity
| Metric | Q3 2020 | Q3 2019 | Nine months 2020 | Nine months 2019 |
|---|---|---|---|---|
| Revenue | None reported | |||
| Research and development expense | $1.256 million | $0.220 million | $2.433 million | $1.385 million |
| General and administrative expense | $0.392 million | $0.540 million | $1.815 million | $1.714 million |
| Total operating expenses | $1.648 million | $0.759 million | $4.248 million | $3.099 million |
| Net loss | $1.639 million | $0.736 million | $4.176 million | $3.018 million |
| Net loss per share, basic and diluted | $0.15 | $0.08 | $0.39 | $0.32 |
- At September 30, cash and cash equivalents were $17.983 million, versus $13.214 million at December 31, 2019. Total assets were $18.156 million and total liabilities $0.664 million; liabilities included a $122,400 PPP loan.
- For the first nine months, operating cash use was $3.422 million, compared with $2.349 million in 2019. Financing provided $8.189 million, principally from $8.175 million net ATM stock-sale proceeds and the PPP loan. Cash increased $4.769 million.
- No meaningful revenue-based margin is reported because the company had no revenue. Accumulated deficit was $30.1 million.
- Management estimated available funds would support planned operations through December 2021 and, in its October 2020 going-concern assessment, concluded there was no substantial doubt about continuing operations for the relevant assessment period. This estimate is subject to assumptions and does not fund all planned development.
Changes versus prior comparable periods
- Net loss increased $0.903 million in Q3 and $1.158 million for the first nine months versus 2019. R&D expense rose substantially, reflecting camsirubicin trial preparation and manufacturing, Validive planning and manufacturing, personnel costs, and increased allocation of the CEO’s compensation to R&D.
- Q3 G&A expense declined $0.147 million, mainly due to the CEO compensation reallocation; nine-month G&A increased $0.101 million, including higher stock compensation and public-company legal and audit costs.
- Cash grew from year-end, largely following equity issuance under the ATM. Shares outstanding rose from 10,587,632 at year-end to 11,452,177 at September 30.
Outlook, risks, and unusual items
- Validive: The company planned to begin a seamless Phase 2b/3 trial in Q4 2020, with first-patient enrollment targeted then. Phase 3 progression depended on interim Phase 2b results and additional funding or a partner; management estimated funding in the millions or tens of millions of dollars would be needed to start and complete Phase 3. The stated target was to complete Phase 3 enrollment in Q4 2022.
- Camsirubicin: GEIS was expected to begin a roughly 170-patient randomized Phase 2 trial against doxorubicin at the end of 2020 or early 2021. Monopar expected to provide study drug and supplemental support averaging about $2–3 million annually. It recorded $612,304 in GEIS and related clinical expenses for the first nine months of 2020.
- MNPR-101/COVID-19: A 50/50 development collaboration with NorthStar was announced in June 2020; expenses through September were immaterial. Candidate conjugates were being evaluated, with the goal of identifying one or two development candidates by year-end 2020. Development and therapeutic benefit remained uncertain.
- Funding and dilution: The company expected losses and expenses to increase and planned to seek equity, debt, collaboration, or grant funding. Equity financing could dilute existing holders; collaboration or licensing could require surrendering valuable rights. Inability to secure funding could delay, limit, or terminate programs. COVID-19 could disrupt manufacturing, trial-site operations, recruitment, regulatory responses, and fundraising.
- PPP loan: The $122,400 loan was recorded as a liability pending forgiveness. The company intended to apply for forgiveness; if not forgiven, it would bear 1% annual interest and scheduled repayment obligations.
- Contingent obligations: Validive’s Onxeo agreement includes potential milestones up to $108 million and royalties of 5%–10% on net sales; MNPR-101’s XOMA license includes potential milestones up to $14.925 million. No milestones or royalties were accrued in the periods reported. No material legal proceedings or off-balance-sheet arrangements were reported.
Investor facts to verify
- Whether Validive enrollment began as targeted, what the Phase 2b interim results show, and whether sufficient financing or a partner is secured for Phase 3.
- Actual cash burn and runway against management’s December 2021 estimate, particularly as trial and manufacturing costs rise.
- Whether the PPP loan was forgiven and whether any repayment liability remains.
- GEIS trial initiation, enrollment, costs, and progress, and the status of MNPR-101 candidate selection and NorthStar collaboration.
- Potential dilution from further equity financing and the terms of any collaboration, financing, milestone, or royalty obligations.