Full Press Release Details
MediciNova Reports Fourth Quarter and Full Year 2010 Results
SAN DIEGO, Calif. March 31, 2011 MediciNova, Inc., a biopharmaceutical company that is publicly traded on the Nasdaq Global Market
(Trading Symbol: MNOV) and the Jasdaq Market of the Osaka Securities Exchange (Code Number: 4875), today announced financial results for the fourth quarter and full year ended December 31, 2010.
A detailed discussion of financial results and product development programs can be found in MediciNova s Annual Report on Form 10-K for the
year ended December 31, 2010, which was filed with the Securities and Exchange Commission on March 31, 2011 and is available through investors.medicinova.com/sec.cfm.
For the quarter ended December 31, 2010, MediciNova reported a net
loss of $5.0 million, or $0.40 per share, compared to a net loss of $5.9 million, or $0.49 per share, for the same period last year. There were no revenues for the quarters ended December 31, 2010 and 2009. Research and development expenses
were $2.2 million for the quarter ended December 31, 2010, compared to $2.6 million for the quarter ended December 31, 2009. The decrease in research and development expenses was primarily due to the completion of the clinical trial of
MN-221 for the treatment of patients suffering from moderate-to-severe chronic obstructive pulmonary disease (COPD), offset by an increase in expense related to the on-going clinical trial of MN-221 for acute exacerbations of asthma and expenses
related to neurological drug candidate, ibudilast (MN-166/AV411) for opioid withdrawal. General and administrative expenses were $2.1 million for the quarter ended December 31, 2010, compared to $3.4 million for the quarter ended
December 31, 2009. The decrease in general and administrative expenses was primarily due to the absence of bonus accruals in 2010 for company management and the lack of transaction costs related to the Avigen acquisition which completed in the
fourth quarter of 2009. The reduction in research and development expense and general and administrative expense in the fourth quarter of 2010 was offset in part by a net realized impairment charge on investment securities and an increase in
interest expense and other expense relating to the amortization of debt issuance costs for convertible notes that were not outstanding in 2009.
For the year ended December 31, 2010, MediciNova reported a net loss of $20.2 million, or $1.63 per share, as compared to a net loss of $20.4
million, or $1.68 per share, for the year ended December 31, 2009. There were no revenues for the years ended December 31, 2010 and 2009. Research and development expenses were $9.7 million for the year ended December 31, 2010, as
compared to $10.9 million for the year ended December 31, 2009. The decrease in research and development expenses primarily related to the completion of the clinical trial evaluating MN-221 at planned escalating doses in patients with severe
acute exacerbations of asthma treated in emergency departments in 2009 and a reduction in unallocated R&D costs. General and administrative expenses were $8.2 million for the year ended December 31, 2010, as compared to $10.4 million for
the year ended December 31, 2009. The decrease in general and administrative expenses was primarily due to a decrease in professional fees incurred due to the completion of the Avigen transaction in 2009 and to the absence of bonus
accruals in 2010 for company management.
At December 31, 2010, we had $28.3 million in cash and cash equivalents (excluding restricted cash), as
compared to $19.2 million of cash and cash equivalents at December 31, 2009. Restricted cash and letter of credit of $29.3 million would be included in our capital resources if the holders of the convertible notes convert them into our common
stock at a conversion price of $6.80 per share prior to their maturity. As described below, on March 29, 2011 we received net proceeds of approximately $7.9 million from an underwritten public offering and on March 31, 2011 we announced
the signing of a loan pay-off letter with Oxford Finance Corporation that states that we pay approximately $15.2 million in principal, interest and fees to retire our outstanding loan on April 1, 2011.
Preliminary data analyses by Drs. Comer and Cooper indicated that ibudilast was safe and well-tolerated in all subjects and that certain endpoints revealed ibudilast efficacy. Dr. Comer concluded,
Ibudilast treatment appeared to dose-dependently decrease the subjective symptoms of opioid withdrawal and appears to reverse tolerance to opioid-elicited analgesic, physiological, and subjective effects.
Recent Highlights in 2011
The formation of the Joint Venture Company with Zhejiang Medicine
Co., Ltd. provides a unique opportunity to advance the development of MN-221 with a very successful Chinese pharmaceutical partner, said Yuichi Iwaki M.D., Ph.D., Chief Executive Officer of MediciNova, Inc. Chunbo Li, Chairman of Zhejiang
Medicine Co., Ltd., commented, This JV can provide an enabling path for MN-221 as a promising therapeutic to become available to the millions of patients in China who suffer from acute bronchospasm. We are very pleased to be joining with
MediciNova in providing better solutions for asthma patients
During 2010 we made significant progress as a company. The clinical development of MN-221 has been
very promising and significant. We have shown improved efficacy in both acute asthma and stable moderate-to-severe COPD, a reduction in hospitalizations from acute asthma, all without an increase in safety risk in our MN-221 trials completed to
date. We are very pleased to continue to support the development of MN-221 in an on-going 200 patient Phase 2b trial treating patients suffering from acute exacerbations of asthma in the Emergency Department, said Yuichi Iwaki, M.D., Ph.D.,
President and Chief Executive Officer of MediciNova, Inc. Since acquisition of Avigen in 2009, both Dr. Kirk Johnson, Chief Scientific Officer and Michael Coffee, Chief Business Officer/Interim Chief Financial Officer have been
well-integrated into our management team. They have been invaluable in supporting the clinical development and corporate development of our two lead compounds: MN-221 and Ibudilast. The recent data in opioid withdrawal and the additional
intellectual property for Ibudilast has made it a very attractive asset for MediciNova and potential collaborators.
MediciNova, Inc. is a publicly traded biopharmaceutical company founded upon acquiring and developing novel, small-molecule therapeutics
for the treatment of serious diseases with a commercial focus on the U.S. market. Through strategic alliances primarily with Japanese pharmaceutical companies, MediciNova holds rights to a diversified portfolio of clinical and preclinical product
candidates, each of which MediciNova believes has a well-characterized and differentiated therapeutic profile, attractive commercial potential, and patent coverage of commercially adequate scope. MediciNova s pipeline includes six
clinical-stage compounds for the treatment of acute exacerbations of asthma, chronic obstructive pulmonary disease exacerbations, multiple sclerosis and other neurologic conditions, asthma, interstitial cystitis, solid tumor cancers, Generalized
Anxiety Disorder, preterm labor and urinary incontinence and two preclinical-stage compounds for the treatment of thrombotic disorders. MediciNova s current strategy is to focus on its two prioritized product candidates, MN-221, for the
treatment of acute exacerbations of asthma and chronic obstructive pulmonary disease exacerbations, and Ibudilast (MN-166/AV411), for the treatment of multiple sclerosis, chronic pain, spinal cord injury, or drug addiction. Each drug candidate is
involved in clinical trials under U.S. and Investigator INDs. MediciNova is engaged in strategic partnering discussions to support further development of the MN-221 and Ibudilast programs. Additionally, MediciNova will seek to monetize
opportunistically its other pipeline candidates. For more information on MediciNova, Inc., please visit www.medicinova.com.
this press release that are not historical in nature constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without
limitation, statements regarding the anticipated cash burn for the fiscal year ending December 31, 2011 and the full year net loss forecast, statements regarding MediciNova s clinical trials supporting safety and efficacy of product
candidates and the potential of such product candidates as treatments for disease, including the potential use of ibudilast for the treatment of drug addiction, dependence or withdrawal syndrome, as well as statements regarding the protection
afforded by intellectual property rights in the company s product candidates. These forward-looking statements may be preceded by, followed by or otherwise include the words believes, expects, anticipates,
intends, estimates, projects, can, could, may, will, would, or similar expressions. These forward-looking statements involve a number of risks and
uncertainties that may cause
actual results or events to differ materially from those expressed or implied by such forward-looking statements. Factors that may cause actual results or events to differ materially from those
expressed or implied by these forward-looking statements, include, but are not limited to, the risks and uncertainties inherent in clinical trials, product development and commercialization, such as the uncertainty in results of clinical trials for
product candidates, the uncertainty of whether the results of clinical trials will be predictive of results in later stages of product development, the risk of delays or failure to obtain or maintain regulatory approval, risks regarding intellectual
property rights in product candidates and the ability to defend and enforce such intellectual property rights, the risk of failure of the third parties upon whom MediciNova relies to conduct its clinical trials and manufacture its product candidates
to perform as expected, the risk of increased cost and delays due to delays in the commencement, enrollment, completion or analysis of clinical trials or significant issues regarding the adequacy of clinical trial designs or the execution of
clinical trials and the timing, cost and design of future clinical trials and research activities, the timing of expected filings with the regulatory authorities, MediciNova s collaborations with third parties, the availability of funds to
complete product development plans and MediciNova s ability to raise sufficient capital when needed, and the other risks and uncertainties described in MediciNova s filings with the Securities and Exchange Commission, including its annual
report on Form 10-K for the year ended December 31, 2010 and its subsequent periodic reports on Forms 10-Q and 8-K. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. MediciNova
disclaims any intent or obligation to revise or update these forward-looking statements.
CONTACT: MediciNova, Inc.
Mark Johnson, Investor Relations
CONSOLIDATED BALANCE SHEETS
| December 31, | ||||||||
| 2010 | 2009 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 28,252,204 | $ | 19,241,581 | ||||
| Investment securities-current | 24,254,987 | |||||||
| ARS put current | 2,557,007 | |||||||
| Restricted cash | 28,688,892 | |||||||
| Restricted investment | 623,751 | |||||||
| Restricted letter of credit | 47 | |||||||
| Prepaid expenses and other current assets | 779,103 | 869,649 | ||||||
| Total current assets | 58,343,997 | 46,923,224 | ||||||
| Restricted cash | 30,045,965 | |||||||
| Goodwill | 9,600,241 | 9,142,205 | ||||||
| In-process research and development | 4,800,000 | 4,800,000 | ||||||
| Restricted investment | 676,499 | |||||||
| Restricted letter of credit | 500,042 | |||||||
| Property and equipment, net | 65,209 | 153,547 | ||||||
| Long-term investments | 2,085,425 | |||||||
| Other assets | 124,722 | |||||||
| Total assets | $ | 72,934,169 | $ | 94,326,907 | ||||
| Liabilities and Stockholders Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,099,625 | $ | 1,300,271 | ||||
| ARS loan payable | 17,605,485 | |||||||
| Management transition plan liability | 623,751 | |||||||
| Current portion of long-term debt | 4,951,610 | |||||||
| Convertible notes | 28,626,296 | |||||||
| Escrow holdback | 47 | 1,094,045 | ||||||
| Accrued expenses | 1,133,273 | 1,276,036 | ||||||
| Income taxes payable | 6,847 | |||||||
| Accrued compensation and related expenses | 348,755 | 1,146,960 | ||||||
| Total current liabilities | 36,790,204 | 22,422,797 | ||||||
| Management transition plan liability | 676,499 | |||||||
| Deferred tax liability | 1,956,000 | 1,956,000 | ||||||
| Long-term debt, less current portion | 9,483,605 | |||||||
| Convertible notes | 29,258,137 | |||||||
| Total liabilities | 48,229,809 | 54,313,433 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders equity: | ||||||||
| Preferred stock, $0.01 par value; 500,000 shares authorized at December 31, 2010 and December 31, 2009; no shares outstanding at December 31, 2010 and December 31, 2009 | ||||||||
| Common stock, $0.001 par value; 30,000,000 shares authorized at December 31, 2010 and December 31, 2009; 12,482,867 and 12,172,510 shares issued at December 31, 2010 and December 31, 2009, respectively, and 12,439,132 and 12,122,217 shares outstanding at December 31, 2010 and December 31, 2009, respectively | 12,484 | 12,170 | ||||||
| Additional paid-in capital | 293,483,920 | 288,652,712 | ||||||
| Accumulated other comprehensive loss | (55,702 | ) | (64,914 | ) | ||||
| Treasury stock, at cost; 43,735 shares at December 31, 2010 and 50,293 shares at December 31, 2009 | (1,197,935 | ) | (1,235,395 | ) | ||||
| Deficit accumulated during the development stage | (267,538,407 | ) | (247,351,099 | ) | ||||
| Total stockholders equity | 24,704,360 | 40,013,474 | ||||||
| Total liabilities and stockholders equity | $ | 72,934,169 | $ | 94,326,907 |
CONSOLIDATED STATEMENTS OF OPERATIONS
| Years ended December 31, | Period from September 26, 2000 (inception) to December 31, 2010 | |||||||||||||||
| 2010 | 2009 | 2008 | ||||||||||||||
| Revenues | $ | $ | $ | $ | 1,558,227 | |||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of revenues | 1,258,421 | |||||||||||||||
| Research and development | 9,710,977 | 10,873,169 | 13,827,651 | 154,256,844 | ||||||||||||
| General and administrative | 8,171,811 | 10,366,291 | 8,773,695 | 97,198,809 | ||||||||||||
| Total operating expenses | 17,882,788 | 21,239,460 | 22,601,346 | 252,714,074 | ||||||||||||
| Operating loss | (17,882,788 | ) | (21,239,460 | ) | (22,601,346 | ) | (251,155,847 | ) | ||||||||
| (Impairment charge)/gain, net on investment securities and ARS put | (785,478 | ) | 310,250 | (1,259,984 | ) | (1,735,212 | ) | |||||||||
| Foreign exchange gain/(loss) | 3,955 | (13,622 | ) | (88,159 | ) | (97,826 | ) | |||||||||
| Other expense | (180,507 | ) | (180,507 | ) | ||||||||||||
| Interest expense | (1,768,354 | ) | (242,371 | ) | (2,010,725 | ) | ||||||||||
| Other income | 438,542 | 823,320 | 2,038,219 | 19,058,076 | ||||||||||||
| Income taxes | (12,678 | ) | (7,007 | ) | (13,559 | ) | (53,244 | ) | ||||||||
| Net loss | (20,187,308 | ) | (20,368,890 | ) | (21,924,829 | ) | (236,175,285 | ) | ||||||||
| Accretion to redemption value of redeemable convertible preferred stock | (98,445 | ) | ||||||||||||||
| Deemed dividend resulting from beneficial conversion feature on Series C redeemable convertible preferred stock | (31,264,677 | ) | ||||||||||||||
| Net loss applicable to common stockholders | $ | (20,187,308 | ) | $ | (20,368,890 | ) | $ | (21,924,829 | ) | $ | (267,538,407 | ) | ||||
| Basic and diluted net loss per common share | $ | (1.63 | ) | $ | (1.68 | ) | $ | (1.82 | ) | |||||||
| Shares used to compute basic and diluted net loss per share | 12,410,576 | 12,105,835 | 12,072,027 |