Medicinova Inc 10-Q for FY2020 Q2

Medicinova Inc (MNOV)

10-Q 2020-07-28 For: 2020-06-30

Added on April 06, 2026

About this 10-Q

Medicinova Inc filed this 10-Q on July 28, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $4.45M; compared with a net loss of $3.88M a year earlier

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Delaware		33-0927979
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

4275 Executive Square, Suite 300 La Jolla, CA		92037
(Address of Principal Executive Offices)		(Zip Code)


Common Stock, $0.001 par value	MNOV	The Nasdaq Stock Market LLC
(Title of each class)	(Trading symbol(s))	(Name of each exchange on which registered)


	•	The widespread outbreak of an illness or any other communicable disease, such as COVID-19, or any other public health crisis, could adversely affect our business, results of operations and financial condition;
	•	Inability to raise additional capital if needed;
	•	Inability to generate revenues from product sales to continue business operations;
	•	Inability to develop and commercialize our product candidates;
	•	Failure or delay in completing clinical trials or obtaining Food and Drug Administration or foreign regulatory approval for our product candidates in a timely manner;
	•	Unsuccessful clinical trials stemming from clinical trial designs, failure to enroll a sufficient number of patients, undesirable side effects and other safety concerns;
	•	Inability to demonstrate sufficient efficacy of product candidates;
	•	Reliance on the success of our MN-166 (ibudilast) and MN-001 (tipelukast) product candidates;
	•	Delays in commencement or completion of clinical trials or suspension or termination of clinical trials;
	•	Loss of our licensed rights to develop and commercialize a product candidate as a result of the termination of the underlying licensing agreement;
	•	Competitors may develop products rendering our product candidates obsolete and noncompetitive;
	•	Inability to successfully attract partners and enter into collaborations on acceptable terms;
	•	Dependence on third parties to conduct clinical trials and to manufacture product candidates;
	•	Dependence on third parties to market and distribute products;
	•	Our product candidates, if approved, may not gain market acceptance or obtain adequate coverage for third party reimbursement;
	•	Disputes or other developments concerning our intellectual property rights;
	•	Actual and anticipated fluctuations in our quarterly or annual operating results;
	•	Price and volume fluctuations in the overall stock markets;
	•	Litigation or public concern about the safety of our potential products;
	•	International trade or foreign exchange restrictions, increased tariffs, foreign currency exchange;
	•	High quality material for our products may become difficult to obtain or expensive;


	•	Strict government regulations on our business;
	•	Regulations governing the production or marketing of our product candidates;
	•	Loss of, or inability to attract, key personnel; and
	•	Economic, political, foreign exchange and other risks associated with international operations.

PART I. FINANCIAL INFORMATION		6

ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS (unaudited)	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	21
ITEM 4.	CONTROLS AND PROCEDURES	21

PART II. OTHER INFORMATION		22

ITEM 1.	LEGAL PROCEEDINGS	22
ITEM 1A.	RISK FACTORS	22
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	22
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	22
ITEM 4.	MINE SAFETY DISCLOSURES	22
ITEM 5.	OTHER INFORMATION	22
ITEM 6.	EXHIBITS	23

SIGNATURES		24

	June 30,			December 31,
	2020			2019
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	60,440,450		$	63,792,657
Prepaid expenses and other current assets		605,677			511,916
Total current assets		61,046,127			64,304,573
Goodwill		9,600,240			9,600,240
In-process research and development		4,800,000			4,800,000
Property and equipment, net		32,927			40,550
Other non-current assets		359,147			459,811
Total assets	$	75,838,441		$	79,205,174
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	576,506		$	451,326
Accrued expenses and other liabilities		2,197,254			1,776,912
Total current liabilities		2,773,760			2,228,238
Long-term deferred revenue		1,694,163			1,694,163
Deferred tax liability		201,792			201,792
Other non-current liabilities		75,783			186,358
Total liabilities		4,745,498			4,310,551
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized at June 30, 2020 and December 31, 2019; 44,263,578 and 43,908,065 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		44,264			43,908
Additional paid-in capital		447,379,208			444,016,341
Accumulated other comprehensive loss		(92,796	)		(92,681	)
Accumulated deficit		(376,237,733	)		(369,072,945	)
Total stockholders’ equity		71,092,943			74,894,623
Total liabilities and stockholders' equity	$	75,838,441		$	79,205,174

	Three months ended						Six months ended
	June 30,						June 30,
	2020			2019			2020			2019
Operating expenses:
Research, development and patents	$	2,199,036		$	1,465,512		$	3,449,781		$	3,099,390
General and administrative		2,311,330			2,716,509			3,985,084			6,061,990
Total operating expenses		4,510,366			4,182,021			7,434,865			9,161,380
Operating loss		(4,510,366	)		(4,182,021	)		(7,434,865	)		(9,161,380	)
Interest income		63,691			307,574			286,971			611,819
Other expense		(4,554	)		(7,429	)		(16,894	)		(29,505	)
Net loss applicable to common stockholders	$	(4,451,229	)	$	(3,881,876	)	$	(7,164,788	)	$	(8,579,066	)
Basic and diluted net loss per common share	$	(0.10	)	$	(0.09	)	$	(0.16	)	$	(0.20	)
Shares used to compute basic and diluted net loss per common share		44,091,568			43,069,007			44,020,429			42,770,117
Net loss applicable to common stockholders	$	(4,451,229	)	$	(3,881,876	)	$	(7,164,788	)	$	(8,579,066	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		5			3,355			(115	)		1,574
Comprehensive loss	$	(4,451,224	)	$	(3,878,521	)	$	(7,164,903	)	$	(8,577,492	)

	Six Months Ended June 30, 2020
	Common stock				Additional paid-in		Accumulated other comprehensive			Accumulated			Total stockholders’
	Shares		Amount		capital		income (loss)			deficit			equity
Balance at December 31, 2019		43,908,065	$	43,908	$	444,016,341	$	(92,681	)	$	(369,072,945	)	$	74,894,623
Share-based compensation	—		—			596,378	—			—				596,378
Issuance of shares under an employee stock purchase plan (ESPP)		1,979		2		6,252	—			—				6,254
Issuance of common stock under at-the-market equity distribution and sales agreements, net of offering costs		68,952		69		412,623		—			—			412,692
Net loss	—		—		—		—				(2,713,559	)		(2,713,559	)
Foreign currency translation adjustments	—		—		—			(120	)	—				(120	)
Balance at March 31, 2020		43,978,996		43,979		445,031,594		(92,801	)		(371,786,504	)		73,196,268
Share-based compensation		—		—		1,147,154		—			—			1,147,154
Issuance of common stock for option exercises		143,863		144		438,118	—			—				438,262
Issuance of common stock under at-the-market equity distribution and sales agreements, net of offering costs		140,719		141		762,342		—			—			762,483
Net loss		—		—		—		—			(4,451,229	)		(4,451,229	)
Foreign currency translation adjustments		—		—		—		5			—			5
Balance at June 30, 2020		44,263,578	$	44,264	$	447,379,208	$	(92,796	)	$	(376,237,733	)	$	71,092,943

	Six Months Ended June 30, 2019
	Common stock				Additional paid-in			Accumulated other comprehensive			Accumulated			Total stockholders’
	Shares		Amount		capital			income (loss)			deficit			equity
Balance at December 31, 2018		42,081,306	$	42,081	$	429,289,968		$	(93,150	)	$	(356,131,287	)	$	73,107,612
Share-based compensation		—		—		2,699,500			—			—			2,699,500
Issuance of shares under an employee stock purchase plan		2,401		2		16,901			—			—			16,903
Issuance of common stock under at-the-market equity distribution and sales agreements, net of offering costs		—		—		(8,532	)		—			—			(8,532	)
Issuance of common stock for option exercises		977,454		978		3,919,757			—			—			3,920,735
Net loss		—		—		—			—			(4,697,190	)		(4,697,190	)
Foreign currency translation adjustments		—		—		—			(1,781	)		—			(1,781	)
Balance at March 31, 2019		43,061,161		43,061		435,917,594			(94,931	)		(360,828,477	)		75,037,247
Share-based compensation		—		—		1,842,514			—			—			1,842,514
Issuance of common stock for option exercises		38,000		38		180,332			—			—			180,370
Net loss		—		—		—			—			(3,881,876	)		(3,881,876	)
Foreign currency translation adjustments		—		—		—			3,355			—			3,355
Balance at June 30, 2019		43,099,161	$	43,099	$	437,940,440		$	(91,576	)	$	(364,710,353	)	$	73,181,610

Level 1:	Observable inputs such as quoted prices in active markets;

Level 2:	Inputs are quoted prices for similar items in active markets or quoted prices for identical or similar items in markets that are not active near the measurement date; and

Level 3:	Unobservable inputs due to little or no market data, which require the reporting entity to develop its own assumptions.

	Number of Option Shares			Weighted Average Exercise Price
Outstanding at December 31, 2019		6,802,093		$	5.61
Granted		1,331,000			6.70
Exercised		(143,863	)		3.05
Cancelled		(379,843	)		9.17
Outstanding at June 30, 2020		7,609,387		$	5.67
Exercisable at June 30, 2020		6,285,887		$	5.45

	Six months ended
	June 30, 2020		June 30, 2019
Stock Option assumptions:
Risk-free interest rate	0.29 - 1.68%		1.76 - 2.19%
Expected volatility of common stock	57.44 - 66.49%		61.9 - 62.58%
Dividend yield	0%		0%
Expected term (in years)	4.5 - 5.6		5.0 - 5.3
ESPP assumptions:
Risk-free interest rate	0.14%		2.46%
Expected volatility of common stock	81.70%		72.5%
Dividend yield	0.0%		0.0%
Expected term (in years)		0.5		0.5

Exhibit Number		Description

3.1		Restated Certificate of Incorporation of the Registrant, as amended (incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q filed August 9, 2012).

3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed April 25, 2019).

31.1⁽¹⁾		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2⁽¹⁾		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1⁽¹⁾		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

32.2⁽¹⁾		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

101⁽¹⁾		The following financial statements from the MediciNova, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations and Comprehensive Loss; (iii) Consolidated Statements of Stockholders’ Equity; (iv) Consolidated Statements of Cash Flows; and (v) the notes to the consolidated financial statements.
104⁽¹⁾		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	MEDICINOVA, INC.

Date: July 28, 2020	By:	/s/ YUICHI IWAKI
		Yuichi Iwaki, M.D., Ph.D.
		President and Chief Executive Officer
		(on behalf of the registrant and
		as the registrant’s Principal Executive Officer)

	By:	/s/ EDWARD STEPANOW
		Edward Stepanow
		Chief Financial Officer
		(on behalf of the registrant and
		as the registrant’s Principal Financial Officer)

	Three months ended					Six months ended
	June 30,					June 30,
		2020			2019		2020			2019
External development expense:
MN-221	$	(8	)	$	5	$	(5	)	$	14
MN-166		1,415			499		2,033			896
MN-001		48			37		96			63
MN-029		1			1		2			1
Total external development expense		1,456			542		2,126			974
R&D personnel expense		604			791		1,034			1,866
R&D facility and depreciation expense		12			11		24			23
Patent expenses		127			74		198			157
Other R&D expense		0			47		68			79
Total research, development and patent expense	$	2,199		$	1,465	$	3,450		$	3,099