Business context and reporting period
Filing identity: The provided filing is Miragen Therapeutics, Inc.’s Form 10-Q for the quarter ended June 30, 2018, not Viridian Therapeutics, Inc. Investors should verify the company and filing before relying on this summary.
Miragen was a clinical-stage biopharmaceutical company developing RNA-targeted therapies. Its clinical-stage candidates were cobomarsen, remlarsen, and MRG-110. It had no approved products and generated no product-sales revenue. Amounts below are in U.S. dollars; financial statements are unaudited.
Financial performance and position
| Metric | Three months ended June 30, 2018 | Six months ended June 30, 2018 |
|---|---|---|
| Total revenue | $2.18 million | $6.97 million |
| Research and development expense | $8.38 million | $14.79 million |
| General and administrative expense | $2.67 million | $5.66 million |
| Operating loss | $8.86 million | $13.48 million |
| Net loss | $8.71 million | $13.38 million |
| Basic and diluted net loss per share | $0.29 | $0.47 |
For the six months, net cash used in operations was $11.87 million, investing activities used $32.98 million (principally purchases of short-term investments), and financing provided $40.81 million. Cash and cash equivalents were $43.40 million at June 30, 2018, versus $47.44 million at year-end 2017; short-term investments were $32.86 million, compared with none at year-end. Combined cash and short-term investments totaled approximately $76.26 million.
Total assets were $81.89 million and total liabilities were $14.22 million. Notes payable totaled $10.11 million, including $0.29 million current and $9.82 million long-term; principal outstanding was $10.0 million. The loan bore interest at prime (5.00% at June 30, 2018) and was secured by business assets, excluding intellectual property. No material off-balance-sheet arrangements were reported. No gross or operating margin measure was presented; with no product sales and collaboration/grant revenue, conventional product margin comparisons are not meaningful.
Changes versus prior comparable periods
- Second-quarter revenue rose to $2.18 million from $0.72 million, mainly from higher Servier reimbursements and grant revenue. Six-month revenue increased to $6.97 million from $1.18 million, principally reflecting a $3.7 million Servier development milestone and increased reimbursable activity.
- R&D expense increased 53% for the quarter and 54% for the six-month period, driven by clinical development, manufacturing, personnel growth, and a licensing milestone. G&A was nearly flat for the quarter and fell modestly for the six months, partly because merger-related legal costs in 2017 did not recur.
- Six-month net loss narrowed to $13.38 million from $14.29 million, despite higher R&D costs, largely because collaboration revenue increased. Operating cash use fell to $11.87 million from $15.26 million.
- In February 2018, Miragen raised approximately $37.9 million net in a public offering; it also raised approximately $2.7 million net through ATM sales during the first half. Common shares outstanding increased to 30.60 million at June 30, 2018 from 22.57 million at December 31, 2017.
Outlook, commentary, risks and unusual items
- Management estimated existing cash and short-term investments would fund normal operations into early 2020. It also said substantial additional capital would be needed; actual cash needs may vary with clinical progress, spending, partnerships, and financing availability.
- Management expected R&D spending and operating losses to rise as trials advanced. Key development updates: cobomarsen CTCL enrollment was complete, with a Phase 2 trial planned for the fourth quarter of 2018; preliminary cobomarsen ATLL data had been presented; and a Phase 2 remlarsen keloid-prevention study began in July 2018.
- The Servier collaboration covered MRG-110 and cardiovascular targets. Miragen reported earning a €3.0 million ($3.7 million) milestone after initiation of the MRG-110 Phase 1 trial. In April 2018, the agreement was amended to update the development plan and specify additional cost reimbursement tied to defined development outcomes.
- After quarter-end, Miragen entered a stock purchase agreement with The Leukemia & Lymphoma Society for up to $5.0 million gross, subject to milestones and other conditions. The initial August 6 closing raised approximately $1.0 million through issuance of 150,987 shares.
- Principal risks include clinical efficacy and safety uncertainty, the unproven nature of microRNA therapeutics, regulatory and manufacturing challenges, reliance on third parties and collaborators, patent and licensing exposure, and the need for further financing. Equity financing may dilute shareholders; debt covenants restrict certain actions. The filing reported no legal proceedings and no material change in internal control over financial reporting; disclosure controls were assessed as effective at a reasonable level of assurance.
- Unusual period items include the Servier milestone revenue, the $0.7 million RICC licensing milestone recorded in R&D expense, substantial equity issuance, and the reallocation of cash into short-term Treasury investments.
Important facts for investors to verify
- Confirm the issuer: this source is Miragen Therapeutics, Inc., while the request names Viridian Therapeutics, Inc.
- Check subsequent clinical data, trial timing, enrollment, safety findings, and regulatory feedback for cobomarsen, remlarsen, and MRG-110.
- Assess the assumptions behind management’s early-2020 cash runway estimate, including trial spending, collaboration reimbursements, and further financing needs.
- Review the Servier agreement’s reimbursement and milestone conditions, and whether expected payments or royalties are achieved.
- Track dilution from the 2018 public offering, ATM sales, the LLS agreement, and equity compensation; verify the timing and conditions of later LLS closings.
- Review SVB loan terms, variable-rate exposure, repayment schedule, and restrictive covenants.