MONOPAR THERAPEUTICS INC.
TABLE OF CONTENTS
| Page |
|---|
| Part I |
|---|
| Item 1. | Business | 7 |
| Item 1A. | Risk Factors | 23 |
| Item 1C. | Cybersecurity | 23 |
| Item 2. | Properties | 58 |
| Item 3. | Legal Proceedings | 58 |
| Part II |
|---|
| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 59 |
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 59 |
| Item 8. | Financial Statements and Supplementary Data | 69 |
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 69 |
| Item 9A. | Controls and Procedures | 70 |
| Item 9B. | Other Information | 70 |
| Part III |
|---|
| Item 10. | Directors, Executive Officers and Corporate Governance | 71 |
| Item 11. | Executive Compensation | 74 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 80 |
| Item 13. | Certain Relationships and Related Transactions and Director Independence | 83 |
| Item 14. | Principal Accountant Fees and Services | 84 |
| Part IV |
|---|
| Item 15. | Exhibits and Financial Statement Schedules | 85 |
Forward-Looking Statements
This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this Annual Report on Form 10-K are forward-looking statements. The words “hopes,” “believes,” “anticipates,” “plans,” “seeks,” “estimates,” “projects,” “expects,” “intends,” “may,” “could,” “should,” “would,” “will,” “continue,” and similar expressions are intended to identify forward-looking statements. The following uncertainties and factors, among others, could affect future performance and cause actual results to differ materially from those matters expressed in or implied by forward-looking statements:
| ● | our ability to raise sufficient funds within the next 12 months in order for us to support continued clinical development of MNPR-101 for radiopharmaceutical use in advanced cancers, and if supported by positive data from the ongoing Phase 1b dose escalation study, continue the clinical development of camsirubicin and preclinical development of MNPR-202 and related compounds; as well as our ability to further raise additional funds in the future to support any future product candidate programs through completion of clinical trials, and our current and future product candidate programs through the approval processes and, if applicable, commercialization; |
| ● | our ability to regain compliance with the Nasdaq listing standards requiring our stock closing bid price to be at least $1.00 for at least 10 consecutive trading days (and potentially up to 20) by August 26, 2024, and, in the event it is necessary to effect a reverse stock split to attempt to cure the bid price deficiency, the uncertain impact on our stock price, or if more time is needed, our ability to win an appeal to Nasdaq requesting additional time; |
| ● | our ability to raise funds on acceptable terms; |
| ● | our ability to find a suitable pharmaceutical partner or partners to further our development efforts, under acceptable financial terms; |
| ● | risks and uncertainties associated with our or our development partners' research and development activities, including preclinical studies, clinical trials, regulatory submissions, and manufacturing and quality expenses; |
| ● | known and unknown risks associated with developing new radiopharmaceutical therapeutics and imaging agents; |
| ● | estimated timeframes for our clinical trials and regulatory reviews for approval to market products are uncertain; |
| ● | our ability to address the fulfillment and logistical challenges posed by the potential time-limited shelf-life of our current radiopharma or future drug candidates; |
| ● | our ability to obtain an adequate supply at reasonable costs of radioisotopes that we are currently using or that we may incorporate into our drug candidates, as such supply may be impacted by the ongoing wars between Russia-Ukraine, Israel-Hamas and other uncertain economic and market effects; |
| ● | the rate of market acceptance and competitiveness in terms of pricing, efficacy and safety, of any products for which we receive marketing approval, and our ability to competitively market any such products as compared to larger pharmaceutical firms; |
Forward-Looking Statements (continued)
| ● | the difficulties of commercialization, marketing and product manufacturing and overall strategy; |
| ● | uncertainties of intellectual property position and strategy including new discoveries and patent filings; |
| ● | our ability to attract and retain experienced and qualified key personnel and/or to find and utilize external sources of experience, expertise and scientific, medical and commercialization knowledge to complete product development and commercialization of new products; |
| ● | the risks inherent in our estimates regarding the level of needed expenses, capital requirements and the availability of required additional financing at acceptable terms; |
| ● | the impact of government laws and regulations including increased governmental control of healthcare and pharmaceuticals, resulting in direct price controls driving lower prices, other governmental regulations affecting cost requirements and structures for selling therapeutic or imaging products, and recent governmental legislation affecting other industries which may indirectly increase our costs of obtaining goods and services and our cost of capital; |
| ● | the uncertain impact any resurgence of COVID-19 or another pandemic could have on our ability to advance our clinical programs and raise additional financing; |
| ● | the cumulative impact of domestic and global inflation, volatility in financial markets and/or the potential for an economic recession increasing our costs of obtaining goods and services or making financing more difficult to obtain on acceptable terms or at all; |
| ● | the uncertain impact of the Russia-Ukraine war or the Israel-Hamas war on our clinical material manufacturing expenses and timelines, as well as on general economic, trade and financial market conditions; and |
| ● | uncertainty of our financial projections and operational timelines and the development of new competitive products and technologies. |
Although we believe that the risk assessments identified in such forward-looking statements are appropriate, we can give no assurance that such risks will materialize. Cautionary statements are disclosed in this Annual Report on Form 10-K, including without limitation statements in the section entitled “Item 1A - Risk Factors,” addressing forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements. We undertake no obligation to update any statements made in this Annual Report on Form 10-K or elsewhere, including without limitation any forward-looking statements, except as required by law.
Any forward-looking statements in this Annual Report on Form 10-K reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances projected in this information.
Summary Risk Factors
Our business is subject to numerous risks and uncertainties, including those highlighted in “Item 1A - Risk Factors” located elsewhere in this Annual Report on Form 10-K. These risks include, among others, the following:
| ● | We are a clinical stage biopharmaceutical company with a history of financial losses. We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain cash self-sufficiency or profitability, which could result in a decline in the market value of our common stock. |
| ● | Funds raised to date are not sufficient to support clinical development of MNPR-101 for radiopharmaceutical use in advanced cancers beyond the planned Phase 1 clinical trial and, if supported by positive data from the ongoing Phase 1b dose escalation study, continue the clinical development of camsirubicin and preclinical development of MNPR-202 and related compounds. If we are unable to raise enough funds within the next 12 months from the sale of our common stock or other financing efforts, or conclude a strategic agreement or collaboration such as out-licensing our product candidates, or enter into a clinical or commercial partnership, we will likely have to prioritize and/or terminate one or more programs. There can be no assurance that we will be able to secure such financing or find a suitable development partner on satisfactory terms. |
| ● | The termination of our Validive clinical trial at the end of March 2023 resulted in a decrease in our stock price. The closing bid price of our stock fell below $1.00 for more than 30 consecutive trading days and on August 28, 2023, we received a notice from Nasdaq stating that we were out of compliance with Nasdaq listing standards giving us 180 days to regain compliance. On February 27, 2024, we received a notice from Nasdaq granting us an additional 180-day period to regain compliance. If we do not regain compliance by August 26, 2024 or win an appeal to extend the deadline, we would face delisting or needing to do a reverse stock split and it may have serious adverse consequences on our stock price and our ability to raise funds, which may cause us to delay, restructure or otherwise reconsider our operations. If it is necessary to effect a reverse stock split to attempt to cure the bid price deficiency, the impacts on our stock price are uncertain and could be adverse. |
| ● | We do not have and may never have any approved products on the market. Our business is highly dependent upon receiving marketing approvals from various U.S. and international governmental agencies and would be severely harmed if we are not granted approvals to manufacture and sell our product candidates. |
| ● | Our clinical trials may not yield sufficiently conclusive results for regulatory agencies to approve the marketing and sale of our products, which would adversely affect our financial condition. |
| ● | If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals will be delayed or prevented, which could materially delay our program schedules and adversely affect our financial condition. |
| ● | If we or our licensees, development collaborators, or suppliers are unable to manufacture our products in sufficient quantities or at defined quality specifications, or are unable to obtain regulatory approvals for the manufacturing facility, we may be unable to develop and/or meet demand for our products as well as lose time to market and potential revenues. |
| ● | We rely on qualified third parties to conduct our active pharmaceutical ingredient manufacturing, our drug product manufacturing, non-clinical studies, and our clinical trials. If these third parties do not or cannot successfully carry out their contractual duties and meet expected deadlines or performance goals, the initiation or conduct of our clinical trials would be delayed and we may be unable to obtain regulatory approval for, or commercialize, our current product candidates or any future products, and our financial condition would be adversely affected. |
| ● | Radiopharmaceutical technology is a relatively novel approach to cancer imaging and treatment, which may create significant and potentially unpredictable challenges for it, including the availability of radioisotopes, potential misconception about the safety of radiopharmaceuticals, and low market uptake due to its novelty. Perceptions of these challenges may make it more difficult to raise funding as we focus efforts on our radiopharmaceutical program. |
Summary Risk Factors (continued)
| ● | The Russia-Ukraine war, and resulting sanctions against Russia and Russian entities, and Russian reduction in gas shipments to the EU and other allies, have increased fuel costs, reduced access to critical supplies and may cause shipping delays. Separately, the Israel-Hamas war has created additional uncertainties. The broader economic, trade and financial market consequences are uncertain at this time, which may increase the cost of supplies for our clinical materials, delay the manufacture of our clinical materials, restrict the availability of radioisotopes, increase costs of other goods and services or make it more difficult or costly to raise additional financing, any of which could cause an adverse effect on our clinical programs and on our financial condition. |
| ● | Market variables, such as inflation of product costs, labor rates and fuel, freight and energy costs, as well as geopolitical events could likely cause us to suffer significant increases in our operating and administrative expenses. |
| ● | Unstable market and economic conditions, such as volatility in the markets due to concerns about bank stability and economic challenges due to inflation, may have serious adverse consequences on our ability to raise funds, which may cause us to delay, restructure or cease our operations. |
| ● | The effects of economic and political pressure to lower pharmaceutical prices are a major threat to the economic viability of new research-based pharmaceutical products, and any significant decrease in drug prices could materially and adversely affect the financial appeal of our products and prospects for us to raise additional capital. |
| ● | We face significant competition from other radiopharmaceutical, biotechnology and pharmaceutical companies, and from research-based academic medical institutions, in our targeted medical indications, and our operating results would be adversely affected if we fail to compete effectively. Many competitors in our industry have greater organizational capabilities, much higher available capital resources, and established marketing and sales resources and experience in the targeted markets. Competition and technological change may make our product candidates obsolete or non-competitive. |
| ● | The termination of third-party licenses would adversely affect our rights to important compounds or technologies which are essential to develop and market our products. |
| ● | If we and our third-party licensors do not obtain and preserve protection for our respective intellectual property rights, our competitors may be able to develop and market competing drugs, which would adversely affect our financial condition. |
| ● | If we lose key management leadership, and/or the expertise and experience of our scientific personnel, and if we cannot recruit qualified employees or other highly qualified and experienced personnel for future requirements, we would be at risk to experience significant program delays and increased operational and compensation costs, and our business would be materially disrupted. |
| ● | Any future or long-term impacts of COVID-19 or any other pandemic remain uncertain, and their scope and impact could have a substantial negative bearing on our business, financial condition, operating results, stock price and ability to raise additional funds. |
