Monopar Therapeutics Inc. — Q1 2018 Form 10-Q
Reporting period: Three months ended March 31, 2018; filed May 11, 2018. Monopar is a clinical-stage oncology biopharmaceutical company with no approved products and no product revenue.
Financial performance and liquidity
| Metric | Q1 2018 | Q1 2017 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $457,141 | $133,736 |
| General and administrative expense | $440,119 | $240,103 |
| Total operating expenses / operating loss | $897,260 / $(897,260) | $373,839 / $(373,839) |
| Interest and other income | $20,913 | $924 |
| Net loss | $(876,347) | $(372,915) |
| Basic and diluted loss per share | $(0.09) | $(0.04) |
| Cash used in operating activities | $(808,849) | $(311,486) |
At March 31, 2018, cash and cash equivalents were $8.17 million, restricted cash was $0.80 million, and total assets were $9.15 million. Current and total liabilities were $290,597, consisting of accounts payable and accrued expenses; no debt is reported. Stockholders’ equity was $8.86 million and accumulated deficit was $19.30 million. Gross and operating margins are not meaningful given the absence of revenue.
Changes versus the prior comparable period
- Net loss increased by approximately $503,000. Operating expenses rose by approximately $523,000, including a $323,000 increase in R&D and a $200,000 increase in G&A.
- Management attributed higher R&D primarily to personnel hired in late 2017, consultant stock compensation, and increased Validive development consulting. Higher G&A reflected increased compensation and staffing, board costs, MNPR-201 intellectual-property legal expenses, public-company audit and legal costs, and facilities.
- Operating cash use increased by approximately $497,000. There was no financing cash inflow in Q1 2018, compared with $990,002 in Q1 2017.
- Cash, cash equivalents and restricted cash totaled $8.97 million at quarter-end, down $808,849 from the beginning of the quarter.
Programs, outlook and risks
- Validive: The lead candidate is described as Phase 3-ready for radiation-induced severe oral mucositis in oropharyngeal cancer. Management reported prior Phase 1/2 results showing a 26.3 percentage-point lower incidence of severe oral mucositis in the 100 μg group than placebo. Following an FDA pre-Phase 3 meeting in early May 2018, the company intended to begin a Phase 3 program in late 2018 or early 2019, subject to review of meeting minutes. The planned program included an adaptive-design trial and a conventional trial.
- MNPR-201: The company reported completion of a Phase 2 sarcoma trial, with six-month progression-free survival of 38%, and planned further development in the first half of 2019.
- MNPR-101: Cancer Research UK notified Monopar on March 21, 2018 that it was closing its project and terminating the collaboration. The company was pursuing alternative collaboration opportunities and expected transfer of generated data. It anticipated a pre-IND meeting request in the second half of 2018.
- Management stated available resources were expected to fund minimum operations through June 2019, while emphasizing that additional funding or collaboration transactions would be needed to support development, particularly Validive Phase 3. The filing cautions that funding may not be available on acceptable terms and that programs could be delayed, reduced, or terminated.
- Potential Onxeo payments for Validive include milestones of up to $108 million and royalties of 5%–10% of net sales. MNPR-101 has potential XOMA milestones of up to $14.925 million. No milestones or royalties were incurred in the quarter. These are contingent obligations, not current recorded liabilities.
- The $800,000 Cancer Research UK escrow remained restricted at quarter-end; the company expected release after termination was completed. Future lease payments for the Wilmette office were $52,910 through 2019. No material legal proceedings were reported; no claims had been asserted.
- Management expected R&D and G&A spending to increase as development and staffing expand. Equity financing could dilute shareholders; debt or collaborations could impose restrictive terms or require surrender of valuable rights.
Important facts for investors to verify
- Whether the Cancer Research UK agreement was formally terminated, the MNPR-101 data transfer completed, and the $800,000 escrow released.
- FDA feedback, financing availability, and actual timing, design, and cost of the proposed Validive Phase 3 trials.
- Whether the stated runway through June 2019 remains achievable as operating costs rise; the filing also refers more generally to funding minimum operations for at least the next 12 months.
- Development plans and funding for MNPR-201 and MNPR-101, including the availability of replacement collaboration support for MNPR-101.
- Potential dilution: 690,596 shares were reserved for outstanding options at March 31, 2018; 381,968 were fully vested and exercisable. The filing also reports that Tactic Pharma and TacticGem together owned approximately 77% of the common stock.