Monopar Therapeutics Inc. — 2019 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2019. The company filed the audited annual report on March 27, 2020. Monopar is a clinical-stage oncology biopharmaceutical company with no approved products and no commercial revenue.
Financial performance and position
| Metric | 2019 | 2018 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $1.969 million | $1.774 million |
| General and administrative expense | $2.355 million | $1.557 million |
| Total operating expenses / operating loss | $4.324 million | $3.331 million |
| Net loss | $4.225 million | $3.228 million |
| Basic and diluted loss per share | $0.45 | $0.35 |
| Net cash used in operating activities | $3.018 million | $2.680 million |
At December 31, 2019, cash and cash equivalents were $13.214 million, total current assets were $13.230 million, total current liabilities were $724,165, and stockholders’ equity was $12.628 million. Total liabilities were $724,165; the filing reports no debt balance. No meaningful profit margin is applicable because the company had no revenue. The accumulated deficit was $25.881 million.
The December 2019 IPO sold 1,277,778 shares at $8.00 per share. The company reported approximately $9.4 million in net proceeds. Financing cash flow was $9.347 million, including IPO proceeds, offering costs and option exercises. Cash increased by $6.321 million during 2019.
Changes versus 2018
- Net loss widened by approximately $997,000, or 31%; operating expenses increased $993,000, or 30%.
- R&D expense rose $195,000, mainly due to Validive Phase 3 preparation and camsirubicin collaboration and development work.
- G&A expense rose $798,000, reflecting stock-based compensation, compensation and bonuses, higher audit fees, and board fees.
- Operating cash use increased by $337,000. The year-end cash increase principally reflected IPO financing; 2018 cash had declined by $2.889 million.
Pipeline, outlook and material risks
- Validive: A clonidine mucobuccal tablet being developed to prevent severe oral mucositis in oropharyngeal cancer patients receiving chemoradiotherapy. In the 64-patient oropharyngeal cancer subgroup of a prior Phase 2 study, the 100 μg dose showed 38.9% SOM incidence versus 65.2% for placebo; the difference was a trend, not statistically significant (p=0.09). Monopar planned an adaptive Phase 3 program, conditional on securing substantial additional financing or a partner. Validive has U.S. Fast Track designation and EU orphan designation.
- Camsirubicin: A doxorubicin analog intended to reduce cardiotoxicity. In a completed single-arm Phase 2 study, 52.6% of evaluable patients had partial response or stable disease. GEIS is expected to sponsor a randomized Phase 2 comparison with doxorubicin in about 170 advanced soft-tissue sarcoma patients, with enrollment anticipated in the second half of 2020. Monopar expected to contribute drug and approximately $2–3 million annually. Manufacturing delays related to geopolitical conditions at the Ukrainian plant could delay the program or raise costs.
- MNPR-101: A pre-IND humanized antibody targeting uPAR; IND-enabling work was described as nearly complete. The company had not secured a manufacturing agreement for this candidate.
- Management said year-end funds, together with financing available as of March 13, 2020, were expected to cover minimum operations through March 2021. That runway was not sufficient to start Validive Phase 3; management estimated additional funding in the millions or tens of millions of dollars, depending on partnership arrangements, and further financing would be needed thereafter. The company was pursuing financing and partnering options; neither was assured.
- COVID-19 was identified as a potential source of financing, supply-chain, trial-start and enrollment disruption. The company stated it could not estimate the pandemic’s financial or operational impact. Other major risks include clinical and regulatory failure, reliance on contract manufacturers and research organizations, patient-enrollment delays, competition, and dependence on licensed intellectual property.
- Onxeo’s Validive agreement includes potential milestones up to $108 million and 5%–10% royalties on net sales. XOMA’s MNPR-101 agreement includes potential milestones up to $14.925 million and no sales royalties. No milestones were achieved in 2019. The company reported no material legal proceedings and no off-balance-sheet arrangements.
Most important facts for investors to verify
- Current cash, actual cash burn and financing raised after the filing date; reconcile management’s March 2021 minimum-operations runway with the funding needed for planned trials.
- Whether Validive Phase 3 financing or a partner was secured, and whether regulators accepted the final protocol and trial design.
- Current GEIS trial status, camsirubicin manufacturing resolution, supply costs and expected enrollment timing.
- Whether clinical evidence supports the efficacy and safety claims, particularly Validive’s subgroup results and camsirubicin’s uncontrolled Phase 2 findings.
- Potential dilution from equity sales, outstanding options and restricted stock; also review the company’s substantial controlling-stockholder ownership.