Full Press Release Details
MediciNova Reports Third Quarter 2009 Results
November 12, 2009 MediciNova, Inc., a biopharmaceutical company that is publicly traded on the Nasdaq Global Market (Trading Symbol: MNOV) and the Hercules Market of the Osaka Securities Exchange (Code Number: 4875), today
announced financial results for the third quarter ended September 30, 2009.
A detailed discussion of financial results and product
development programs can be found in MediciNova s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, which was filed November 12, 2009 and is available through http://investors.medicinova.com.
For the quarter ended
September 30, 2009, MediciNova reported a net loss of $4.8 million, or $0.40 per share, compared to a net loss of $4.8 million, or $0.40 per share, for the same period last year. There were no revenues for the quarters ended September 30,
2009 and 2008. Research and development expenses were $2.4 million for the quarter ended September 30, 2009, compared to $3.5 million for the quarter ended September 30, 2008. The decrease in research and development expenses was primarily
due to the completion of a Phase II clinical trial for MN-221 designed to determine the safety and efficacy of MN-221 with more prolonged infusions and
different infusion rates in patients with moderate to severe, but stable asthma (MN-221-CL-005). General and administrative expenses were $2.6 million for the quarter ended September 30,
2009, compared to $2.2 million for the quarter ended September 30, 2008. The increase in general and administrative expenses was due to an increase in legal fees in connection with the proposed merger with Avigen, Inc. and an increase in
consulting fees related to business development activities.
As of September 30, 2009, the carrying value of MediciNova s cash, cash
equivalents, investment securities and ARS Put, net of the ARS Loan, was $37.2 million, compared to $49.1 million at December 31, 2008.
At September 30, 2009, all of MediciNova s investment securities were Auction Rate Securities, or ARS, of which $21.7 million consisted primarily of government-guaranteed student loan securities and $2.2 million consisted of
private placement securities. None of the underlying collateral for the company s ARS consisted of subprime mortgages or collateralized debt obligations. The ARS were previously designated as trading securities. Therefore, for the three months
ended September 30, 2009, MediciNova recorded in its consolidated statement of operations an overall net gain on its ARS portfolio of approximately $0.4 million to record their increase in fair value and recorded a corresponding impairment
charge in its consolidated statement of operations of approximately $0.3 million on the associated ARS Put to record its decline in fair value. In addition, during the three months ended September 30, 2009, $0.2 million of current investment
securities were redeemed at par value and $0.5 million of long-term investment securities were sold at their approximate fair market value as recorded on MediciNova s consolidated balance sheet.
In August 2008, UBS AG, the brokerage firm through which MediciNova purchased the majority of its ARS, entered into a settlement with the SEC, the New York
Attorney General and other state agencies. Under the settlement, UBS issued Auction Rate Security Rights to MediciNova, which would allow the company to sell to UBS the ARS held in accounts with UBS, or the ARS
Rights Offer. Pursuant to the ARS Rights Offer, MediciNova received the right to sell to UBS the ARS at par value at any time during the period beginning June 30, 2010 and ending
July 2, 2012, or the ARS Put. UBS also offered to MediciNova a no net cost loan program, or ARS Loan, whereby the company would be able to borrow up to 75 percent of the market value, as determined by UBS at its sole discretion, of its ARS that
have been pledged as collateral at an interest cost that would not exceed the interest being paid on the underlying ARS investments. In January 2009, MediciNova was approved for the ARS Loan in the amount of $15.9 million and drew down the entire
preapproved amount. In February 2009, MediciNova borrowed an additional $2.2 million under the ARS Loan, bringing the total amount outstanding under the ARS Loan to $18.1 million, following UBS decision to increase its availability under the
ARS Loan. All cash received under the ARS Loan was invested in money market accounts. At September 30, 2009, the amount outstanding under the ARS Loan was $17.7 million.
The quarter was highlighted by the signing of the definitive merger agreement with Avigen, and we currently anticipate the merger with Avigen to close
in the fourth quarter of 2009, subject to receipt of stockholder approval, said Yuichi Iwaki, M.D., Ph.D., President and Chief Executive Officer of MediciNova, Inc. In addition, we are excited to expand the utility of MN-221 into other
respiratory diseases with a Phase Ib clinical trial to evaluate the safety and efficacy of MN-221 in patients with stable, moderate to severe COPD.
MediciNova, Inc. is a publicly-traded biopharmaceutical company focused
on acquiring and developing novel, small-molecule therapeutics for the treatment of diseases with unmet need with a specific 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 assets having claims 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, 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 its resources on its two prioritized product candidates, MN-221 for the treatment of acute exacerbations of asthma and chronic obstructive pulmonary disease
exacerbations and MN-166 for the treatment of multiple sclerosis, and either pursue development independently in the U.S., in the case of MN-221, or establish a strategic collaboration to support further development, in the case of MN-166.
MediciNova will seek to monetize its other product candidates at key value inflection points. For more information on MediciNova, Inc., please visit www.medicinova.com.
Statements in 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 MediciNova s clinical trials supporting safety and efficacy of product candidates and the potential novelty of such product candidates as treatments for
disease, plans and objectives for present and future clinical trials and product development, strategies, future performance, expectations, assumptions, financial condition, liquidity and capital resources. These forward-looking statements may be
preceded by, followed by or otherwise include the words believes, expects, anticipates, intends, estimates, projects, can, could, may,
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 and 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
delays or failure to obtain or maintain regulatory approval, 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 FDA, MediciNova s failure to execute strategic plans or strategies successfully, 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, intellectual property or contract rights, 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, 2008 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.
(a development stage company)
CONSOLIDATED BALANCE
| September 30, 2009 | December 31, 2008 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 25,644,717 | $ | 19,297,284 | ||||
| Investment securities-current | 21,389,607 | |||||||
| ARS put-current | 5,334,985 | |||||||
| Prepaid expenses and other current assets | 892,969 | 718,317 | ||||||
| Total current assets | 53,262,278 | 20,015,601 | ||||||
| Property and equipment, net | 203,874 | 368,299 | ||||||
| Long-term investment securities | 2,482,370 | 24,047,314 | ||||||
| Long-term ARS put | 5,792,701 | |||||||
| Total assets | $ | 55,948,522 | $ | 50,223,915 | ||||
| Liabilities and Stockholders Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 429,502 | $ | 392,572 | ||||
| ARS loan payable | 17,650,538 | |||||||
| Accrued expenses | 1,522,451 | 1,011,916 | ||||||
| Income taxes payable | 9,748 | |||||||
| Accrued compensation and related expenses | 493,330 | 765,147 | ||||||
| Total current liabilities | 20,095,821 | 2,179,383 | ||||||
| Stockholders equity: | ||||||||
| Preferred stock, $0.01 par value; 500,000 shares authorized at September 30, 2009 and December 31, 2008; no shares outstanding at September 30, 2009 and December 31, 2008 | ||||||||
| Common stock, $0.001 par value; 30,000,000 shares authorized at September 30, 2009 and December 31, 2008; 12,149,881 and 12,072,027 shares issued at September 30, 2009 and December 31, 2008, respectively, and 12,099,588 and 11,984,713 shares outstanding at September 30, 2009 and December 31, 2008, respectively | 12,149 | 12,072 | ||||||
| Additional paid-in capital | 278,571,428 | 276,361,775 | ||||||
| Accumulated other comprehensive loss | (59,958 | ) | (29,744 | ) | ||||
| Treasury stock, at cost; 50,293 shares at September 30, 2009 and 87,314 shares at December 31, 2008 | (1,235,395 | ) | (1,317,362 | ) | ||||
| Deficit accumulated during the development stage | (241,435,523 | ) | (226,982,209 | ) | ||||
| Total stockholders equity | 35,852,701 | 48,044,532 | ||||||
| Total liabilities and stockholders equity | $ | 55,948,522 | $ | 50,223,915 |
(a development stage company)
STATEMENTS OF OPERATIONS
| Three months ended September 30, | Nine months ended September 30, | Period from September 26, 2000 (inception) to September 30, | ||||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | 2009 | ||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | 1,558,227 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Cost of revenues | 1,258,421 | |||||||||||||||||||
| Research and development | 2,379,588 | 3,500,876 | 8,226,305 | 11,823,065 | 141,899,003 | |||||||||||||||
| General and administrative | 2,563,772 | 2,195,787 | 6,926,849 | 6,993,195 | 85,587,556 | |||||||||||||||
| Total operating expenses | 4,943,360 | 5,696,663 | 15,153,154 | 18,816,260 | 228,744,980 | |||||||||||||||
| Operating loss | (4,943,360 | ) | (5,696,663 | ) | (15,153,154 | ) | (18,816,260 | ) | (227,186,753 | ) | ||||||||||
| Gain/(impairment charge) on investment securities and ARS put, net | 72,967 | 213,793 | (3,295,621 | ) | (1,046,191 | ) | ||||||||||||||
| Foreign exchange (loss)/gain | (11,600 | ) | 532,392 | (2,424 | ) | (90,997 | ) | (90,583 | ) | |||||||||||
| Interest income, net | 87,433 | 352,768 | 489,003 | 1,696,687 | 18,285,217 | |||||||||||||||
| Income taxes | (527 | ) | (3,664 | ) | (532 | ) | (3,811 | ) | (34,091 | ) | ||||||||||
| Net loss | (4,795,087 | ) | (4,815,167 | ) | (14,453,314 | ) | (20,510,002 | ) | (210,072,401 | ) | ||||||||||
| 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 | $ | (4,795,087 | ) | $ | (4,815,167 | ) | $ | (14,453,314 | ) | $ | (20,510,002 | ) | $ | (241,435,523 | ) | |||||
| Basic and diluted net loss per common share | $ | (0.40 | ) | $ | (0.40 | ) | $ | (1.20 | ) | $ | (1.70 | ) | ||||||||
| Shares used to compute basic and diluted net loss per common share | 12,119,511 | 12,072,027 | 12,088,029 | 12,072,027 |