Monopar Therapeutics Inc. — Q1 2020 Form 10-Q
Reporting period: Three months ended March 31, 2020; filed May 7, 2020. Monopar is a clinical-stage biopharmaceutical company developing oncology therapies. It has no approved products and generated no revenue.
Financial position and results
| Metric | Q1 2020 / March 31, 2020 | Comparable period / prior year-end |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $344,407 | $835,600 in Q1 2019 |
| General and administrative expense | $791,607 | $571,709 in Q1 2019 |
| Total operating expenses | $1,136,014 | $1,407,309 in Q1 2019 |
| Net loss | $1,090,877; $0.10 per share | $1,376,235; $0.15 per share in Q1 2019 |
| Cash and cash equivalents | $12,592,362 | $13,213,929 at December 31, 2019 |
| Operating cash used | $1,125,570 | $995,972 in Q1 2019 |
| Current liabilities / total liabilities | $443,520 | $724,165 at December 31, 2019 |
| Total assets | $12,838,937 | $13,352,021 at December 31, 2019 |
The company reported no debt. Cash and cash equivalents exceeded current liabilities by approximately $12.1 million. The filing does not present a meaningful operating margin because there was no revenue. Accumulated deficit was approximately $27.0 million.
Changes versus Q1 2019 and year-end
- Net loss narrowed by approximately $285,000, while total operating expenses fell by approximately $271,000.
- R&D expense declined approximately $491,000, mainly because Validive trial-planning and accrued material costs were lower; the company also reversed approximately $30,000 of accrued camsirubicin collaboration fees. These decreases were partly offset by higher personnel costs.
- G&A expense rose approximately $220,000, reflecting higher stock-based compensation and personnel costs, legal, patent and audit fees, and other operating costs.
- Cash decreased approximately $622,000 from year-end. Financing included $542,428 of gross proceeds from the at-the-market sales agreement, less commissions and offering costs.
- Weighted-average shares increased to 10.6 million from 9.3 million in Q1 2019. The company had 10,622,823 shares outstanding at quarter-end.
Outlook, programs and risks
- Liquidity: Management stated that resources available as of April 30, 2020 were expected to fund planned operations past June 2021, and concluded there was no substantial doubt about the company’s ability to continue as a going concern. The company expects to need additional capital within 12–18 months; assumptions underlying the runway estimate may prove inaccurate.
- Validive: In response to COVID-19 and clinical-trial constraints, the planned adaptive Phase 3 design was modified to a Phase 2b/3 trial, with a Phase 2b data readout before proceeding to Phase 3. First-patient enrollment was targeted for the second half of 2020. Moving into Phase 3 depends on trial results and raising additional funding or finding a partner; the company estimated the Phase 3 funding need in the millions or tens of millions of dollars. Validive is licensed from Onxeo, with potential milestones up to $108 million and royalties of 5%–10% on net sales.
- Camsirubicin: A GEIS-led randomized Phase 2 trial against doxorubicin in approximately 170 patients with advanced soft tissue sarcoma was expected to begin enrollment in the second half of 2020. Monopar expected to provide drug and supplemental support averaging approximately $2 million–$3 million annually. The filing describes prior Phase 2 results as showing clinical benefit in 52.6% of evaluable patients; these results are not a forecast of future trial outcomes.
- MNPR-101: The uPAR-targeting antibody program was pre-IND stage; most IND-enabling work had been completed. Potential XOMA milestones could total up to $14.925 million; no milestones had been reached by quarter-end.
- COVID-19: The pandemic could impede fundraising, manufacturing and supply, trial initiation and enrollment, and clinical-site operations. Its duration and financial impact were uncertain. Employees were working from home.
- Funding and dilution risks: The company expected losses and expenses to rise as trials advance. It may seek equity, debt, collaborations or grants; equity issuance could dilute shareholders, while partnerships may require relinquishing rights. Failure to obtain funding could delay, reduce or terminate development programs.
- Commitments and contingencies: No material legal proceedings or asserted claims were reported. The filing disclosed no off-balance-sheet arrangements. Validive and MNPR-101 milestone obligations and Validive royalties are contingent on future development and commercial achievements.
Most important facts for investors to verify
- Whether the company’s cash runway assumptions remain achievable and whether additional financing or a Validive partnership is secured in time for Phase 3.
- Whether Validive Phase 2b/3 enrollment began as targeted, and the resulting data and regulatory feedback.
- Whether the GEIS camsirubicin trial began on schedule, its funding requirements, and subsequent enrollment and results.
- Subsequent cash burn, equity sales and dilution under the $19.7 million Capital on Demand agreement; as of April 30, 2020, the company reported 45,155 shares sold for net proceeds of $614,592 under the agreement.
- COVID-19-related effects on trial execution, drug manufacturing, financing access and operating costs.