Monopar Therapeutics

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing at the end of this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related financing activities, includes forward-looking statements that involve risks and uncertainties. You should read the “Risk Factors” section of this Annual Report on Form 10-K, Item 1A, for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing at the end of this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related financing activities, includes forward-looking statements that involve risks and uncertainties. You should read the “Item 1A-Risk Factors” section of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Previous wording

Our cash, cash equivalents and investments as of December 31, 2023, were $7.3 million. As discussed further below and elsewhere in this Annual Report, we expect that our current funds will be sufficient at least through June 30, 2025 for us to: (1) conduct and conclude our first-in-human clinical trial with our MNPR-101-Zr radiopharmaceutical program; (2) continue our ongoing open-label Phase 1b camsirubicin clinical trial; and (3) continue to research MNPR-202. We will require additional funding to further advance our clinical and preclinical programs and we anticipate that we will seek to raise additional capital within the next 12 months to fund our future operations.

Current wording

Our cash, cash equivalents and investments as of December 31, 2024, were $60.2 million. As discussed further below and elsewhere in this Annual Report on Form 10-K, we expect that our current funds will be sufficient at least through December 31, 2026, in order for us to: (1) assemble a regulatory package and file an NDA for the in-licensed ALXN1840 investigational drug candidate for Wilson disease; (2) continue to conduct and conclude our first-in-human imaging and dosimetry clinical trial with MNPR-101-Zr; (3) continue to conduct our first-in-human therapeutic clinical trial of MNPR-101-Lu; (4) advance our preclinical MNPR-101-Ac program into the clinic; and (5) invest in internal R&D projects to expand our radiopharmaceutical pipeline.

Previous wording

Our primary funding source over the past three years was sales of shares of our common stock under at-the-market sales programs through Capital on Demand™ Sales Agreements with JonesTrading Institutional Services LLC (“Jones Trading”). For the year ended December 31, 2023, we sold 1,793,441 shares of our common stock at an average gross price per share of $1.21 for net proceeds of $2,072,503 after fees, commissions and expenses of $98,230.

Current wording

Prior to the fourth quarter of 2024, our primary funding source over the past three years was sales of shares of our common stock under at-the-market sales programs. At-the-market sales were through the Capital on Demand™ Sales Agreements with JonesTrading Institutional Services LLC (“Jones Trading”). For the year ended December 31, 2024, we sold 557,761 shares of our common stock at an average gross price per share of $7.72 for net proceeds of approximately $4.2 million after deducting fees, commissions and expenses of $107,806. We may implement additional at-the-market offerings in the future.

Previous wording

Our management team has extensive experience in developing therapeutics and medical technologies through global regulatory approval and commercialization. In aggregate, companies they co-founded have achieved four drug approvals and three diagnostic medical imaging device approvals in the U.S. and the EU, successfully sold an asset developed by management which subsequently had a positive Phase 3 clinical trial, sold two oncology-focused diagnostic imaging businesses to Fortune Global 1000 firms, and completed the clinical and commercial development and ultimately the sale of a commercial biopharmaceutical company for over $800 million in cash. In addition, the team has supported multiple regulatory submissions with the FDA and EMA and launched multiple drugs in the U.S and the EU. Understanding the preclinical, clinical, regulatory and commercial development processes and hurdles are key factors in successful drug development and the expertise demonstrated by our management team across all of these areas increases the probability of success in advancing the product candidates in our product pipeline. Our strategic goal is to acquire, develop and commercialize promising oncology product candidates that address important unmet medical needs of cancer patients. Five key elements of our strategy to achieve this goal are to:

Current wording

Our management team has extensive experience in developing therapeutics and medical technologies through global regulatory approval and commercialization. In aggregate, companies they co-founded have achieved four drug approvals and three diagnostic medical imaging device approvals in the U.S. and the EU, successfully sold an asset developed by management which subsequently had a positive Phase 3 clinical trial, sold two oncology-focused diagnostic imaging businesses to Fortune Global 1000 firms, and completed the clinical and commercial development and ultimately the sale of a commercial biopharmaceutical company for $800 million in cash. In addition, the team has supported multiple regulatory submissions with the FDA and EMA and launched multiple drugs in the U.S and the EU. Understanding the preclinical, clinical, regulatory and commercial development processes and hurdles are key factors in successful drug development, and the expertise demonstrated by our management team across all of these areas increases the probability of success in advancing the product candidates in our product pipeline. Our strategic goal is to acquire, develop, and commercialize innovative treatments for patients with unmet medical needs. Key elements of our strategy to achieve this goal are to:

Previous wording

We are an emerging growth company. We have no approved drugs and have not generated any revenues. To date, we have engaged in acquiring or in-licensing drug product candidates, entering into collaboration agreements for testing and clinical development of our drug product candidates and providing the infrastructure to support the clinical development of our drug product candidates. We do not anticipate commercial revenues from operations until we complete testing and development of one of our drug product candidates and obtain marketing approval or we sell, enter into a collaborative marketing arrangement, or out-license one of our drug product candidates to another party. See “Liquidity and Capital Resources”.

Current wording

We are a microcap biopharma company. We have no approved drugs and have not generated any revenues. To date, we have engaged in acquiring or in-licensing drug product candidates, and in entering into collaboration agreements for the preclinical testing and clinical development of our drug product candidates along with providing the infrastructure to support the clinical development of our drug product candidates. We do not anticipate revenues from operations until we complete testing and development of one of our drug product candidates and obtain marketing approval, or until we sell, enter into a collaborative marketing arrangement, or out-license one of our drug product candidates to another party. See “Liquidity and Capital Resources.”

Previous wording

During the year ended December 31, 2023, there were two recently issued accounting pronouncements that are described in more detail in Note 2 of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Current wording

During the year ended December 31, 2024, there were two recently issued accounting pronouncements applicable to us that are described in more detail in Note 2 of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Previous wording

We account for stock-based compensation arrangements with employees, non-employee directors and consultants using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based compensation grants, including stock option and restricted stock unit (“RSU”) grants. The fair value method requires us to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model or the closing stock price on the date of grant in the case of RSUs.

Current wording

We account for stock-based compensation arrangements with employees, non-employee directors and consultants using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based compensation grants, including stock option and restricted stock unit (“RSU”) grants. The fair value method requires us to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model or, in the case of RSUs, the closing stock price on the date of grant.

Previous wording

Stock-based compensation costs for stock awards granted to our employees, non-employee directors and consultants are based on the fair value of the underlying instruments calculated using the Black-Scholes option-pricing model on the date of grant for stock options and using the closing stock price on the date of grant for RSUs and recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including selecting methods for estimating our future stock price volatility and expected holding term. For options granted in 2023, the expected volatility rates are estimated based on our actual historical volatility over the three-year period from our initial public offering on December 18, 2019, through December 31, 2022. The expected term for stock options granted during the years ended December 31, 2023 and 2022, was estimated using the simplified method. Forfeitures only include actual forfeitures to-date as the Company accounts for forfeitures as they occur due to a limited history of forfeitures. We have not paid dividends and do not anticipate paying a cash dividend in future vesting periods and, accordingly, use an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards.

Current wording

Stock-based compensation costs for stock awards granted to our employees, non-employee directors and consultants are based on the fair value of the underlying instruments calculated using the Black-Scholes option-pricing model on the date of grant for stock options and using the closing stock price on the date of grant for RSUs and recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including selecting methods for estimating our future stock price volatility and expected holding term. For options granted in 2023, the expected volatility rates are estimated based on our actual historical volatility over the three-year period from our initial public offering on December 18, 2019, through December 31, 2022. For options granted in 2024, the expected volatility rates are estimated based on our actual historical volatility over the four-year period from our initial public offering on December 18, 2019, through December 31, 2023. The expected term for stock options granted during the years ended December 31, 2024 and 2023, was estimated using the simplified method. Forfeitures only include actual forfeitures to-date as the Company accounts for forfeitures as they occur due to a limited history of forfeitures. We have not paid dividends and do not anticipate paying a cash dividend in future vesting periods and, accordingly, use an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards.

Previous wording

R&D expenses for the year ended December 31, 2023 were $5,600,000, compared to $7,592,000 for the year ended December 31, 2022. This represents a decrease of $1,992,000 primarily attributed to (1) a $1,375,000 decrease for Validive clinical trial and manufacturing costs as a result of the termination of that program in March 2023, (2) a $904,000 decrease for a reduction in camsirubicin clinical trial and manufacturing costs, (3) a $126,000 decrease in R&D salaries, partially offset by (1) a $408,000 increase related to MNPR-101 radiopharma activity and (2) a $5,000 net increase in other R&D expenses.

Current wording

R&D expenses for the year ended December 31, 2024, were $13,006,000, compared to $5,600,000 for the year ended December 31, 2023. This represents an increase of $7,406,000 primarily attributed to (1) a $8,557,000 increase related to the in-licensing of ALXN1840, (2) a $335,000 increase in R&D personnel expenses and (3) a $130,000 net increase in other R&D expenses, partially offset by (4) a $1,616,000 decrease in Validive clinical trial-related expenses due to the closure of the trial in March 2023.

Previous wording

G&A expenses for the year ended December 31, 2023, were $3,231,000, compared to $2,945,000 for the year ended December 31, 2022. This represents an increase of $286,000 primarily attributed to a $220,000 increase in G&A personnel salaries, bonuses, benefits and stock-based compensation for annual (non-cash) equity grants, and a $66,000 net increase in other G&A expenses.

Current wording

G&A expenses for the year ended December 31, 2024, were $3,156,000, compared to $3,231,000 for the year ended December 31, 2023. This represents a decrease of $75,000 primarily attributed to a decrease in G&A personnel expensesdue to the reduction in equity grants to our Chief Executive Officer in 2024.

Previous wording

We have incurred losses and cumulative negative cash flows from operations since we commenced operations resulting in an accumulated deficit of approximately $60.2 million as of December 31, 2023. We anticipate that we will continue to incur losses for the foreseeable future. We expect that our R&D and G&A expenses will increase to enable the execution of our strategic plan. As a result, we anticipate that we will seek to raise additional capital within the next 12 months to fund our future operations. We will seek to obtain needed capital through a combination of equity offerings, including at-the-market sales programs, debt financings, strategic collaborations and grant funding. To date, we have funded our operations through net proceeds from the initial public offering of our common stock, net proceeds from sales of our common stock through at-the-market sales programs, private placements of our preferred and common stock, and the net receipt of funds related to the acquisition of camsirubicin. We anticipate that the currently available funds as of March 8, 2024, will fund our planned operations at least through June 30, 2025.

Current wording

We have incurred losses and cumulative negative cash flows from operations since we commenced operations, resulting in an accumulated deficit of approximately $75.8 million as of December 31, 2024. We anticipate that we will continue to incur losses for the foreseeable future. We expect that our R&D and G&A expenses will increase to enable the execution of our strategic plan. We anticipate that the currently available funds as of March 14, 2025, will fund our planned operations at least through December 31, 2026. We will seek to obtain needed capital through a variety of methods, including but not limited to the sale of our common stock, debt financings, strategic partnerships or other sources of capital at our disposal.

Previous wording

We invest our cash equivalents in two money market accounts and U.S. Treasury Bills.

Current wording

We invest our cash equivalents in money market accounts and U.S. Treasury securities.

Previous wording

The cash flow used in operating activities during the year ended December 31, 2023, compared to the year ended December 31, 2022 was essentially flat.

Current wording

The decrease of $1,454,000 in cash flow used in operating activities during the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily related to an increase in liabilities including the accrual of $3,000,000 related to the upfront payment payable to Alexion for the in-licensing of ALXN1840.

Previous wording

During the years ended December 31, 2023 and 2022, we had net cash outflows of $920,000 and $12,118,000, respectively, a decrease of $11,198,000. During 2022, we began investing our idle cash due to the rising interest rates, resulting in a significant increase in cash used in investing activities. During 2023, we had net cash provided by investing activities as some of our investments made in 2022 matured and were used in operating activities, as well as higher net cash provided by financing activities due to more funds raised from sales of our common stock under an at-the-market sales program comparedto 2022.

Current wording

Cash Flow (Used in) Provided By Investing Activities

Previous wording

The increase to cash flow provided by investing activities during the year ended December 31, 2023, compared to cash used in investing activities during the year ended December 31, 2022, of $9,847,000 was related to the fact that our investment in U.S. Treasury Bills commenced in December 2022 with maturities reinvested or used as working capital throughout 2023.

Current wording

The increase to cash flow used in investing activities during the year ended December 31, 2024, compared to cash provided by investing activities during the year ended December 31, 2023, of $19,266,000 was related to the purchase of investments in U.S. Treasury securities during 2024 resulting from an increase in cash available for investment from proceeds from sales of our common stock under an at-the-market sales program and from the October 2024 financing.

Previous wording

The increase in cash flow provided by financing activities during the year ended December 31, 2023, compared to the year ended December 31, 2022, of $1,994,000 was primarily due to higher net proceeds from sales of our common stock through an at-the-market sales program.

Current wording

The increase in cash flow provided by financing activities during the year ended December 31, 2024, compared to the year ended December 31, 2023, of $57,265,000 was primarily due to higher net proceeds from sales of our common stock through an at-the-market sales program and the October 2024 and December 2024 financing rounds.

Previous wording

To date, we have not generated any revenue from product sales. We do not know when, or if, we will generate any revenue from product sales. We do not expect to generate any revenue from product sales or royalties unless and until we obtain regulatory approval of and commercialize any of our current or future drug product candidates or we out-license or sell a drug product candidate to another party. At the same time, we expect our expenses to increase in connection with our ongoing development activities, particularly as we continue the research, development, future preclinical studies and clinical trials of, and seek regulatory approval for, our current and future drug product candidates. If we obtain regulatory approval of any of our current or future drug product candidates, we will need substantial additional funding for commercialization requirements and our continuing drug product development operations.

Current wording

To date, we have not generated any revenue from product sales. We do not know when, or if, we will generate any revenue from product sales. We do not expect to generate any revenue from product sales or royalties unless and until we obtain regulatory approval of and commercialize any of our current or future drug product candidates, or we out-license or sell a drug product candidate to another party. At the same time, we expect our expenses to increase in connection with our ongoing development activities, particularly as we continue the research, development, future preclinical studies and clinical trials of, and seek regulatory approval for, our current and future drug product candidates. If we obtain regulatory approval of any of our current or future drug product candidates, we will need substantial additional funding for precommercial and commercialization requirements and our continuing drug product development operations.

Previous wording

We are working towards initiating enrollment for our MNPR-101-Zr Phase 1 dosimetry clinical trial. If the tumor uptake, biodistribution, and safety look encouraging in this Phase 1 dosimetry trial, we may proceed to evaluate the efficacy in humans of a therapeutically radio-labeled version of MNPR-101 bound to an isotope such as Ac-225, which will require additional funding or finding a suitable pharmaceutical partner. There can be no assurance that any such events will occur. We intend to continue evaluating drug product candidates for the purpose of growing our pipeline. Identifying and securing high-quality compounds usually takes time and related expenses; however, our spending could be significantly accelerated in 2024 and onward if additional drug product candidates are acquired and enter clinical development. In this event, we may be required to expand our management team, and pay higher contract manufacturing costs, contract research organization fees, other clinical development costs and insurance costs that are not currently projected. Additional long-term funding is needed to generally to support our current and future product candidates through clinical trials, approval processes and, if applicable, commercialization.

Current wording

We intend to continue evaluating drug product candidates for the purpose of growing our pipeline. Identifying and securing high-quality compounds usually takes time and related expenses. Our spending could be significantly accelerated in the future if additional drug product candidates are acquired and enter clinical development. In this event, we may be required to expand our management team, and pay higher contract manufacturing costs, contract research organization fees, other clinical development costs and insurance costs that are not currently projected. Beyond our current funds, substantial additional long-term funding is needed to further develop our radiopharmaceutical and rare disease programs.

Previous wording

Until we can generate a sufficient amount of product revenue to finance our cash requirements, we expect to finance our future cash needs primarily through a combination of equity offerings, including at-the-market sales programs, debt financings, strategic collaborations and grant funding. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our current stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our current stockholders’ rights. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with other parties, we likely will have to share or relinquish valuable rights to our technologies, future revenue streams, research programs or drug product candidates or grant licenses on terms that may not be favorable to us, which will reduce our future returns and affect our future operating flexibility. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our pipeline product development or commercialization efforts or grant rights to others to develop and market drug product candidates that we would otherwise prefer to develop and market ourselves.

Current wording

Until we can generate a sufficient amount of product revenue to finance our cash requirements, we expect to finance our future cash needs primarily through a combination of equity offerings, debt financings, strategic collaborations and grant funding. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our current stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our current stockholders’ rights. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with other parties, we likely will have to share or relinquish valuable rights to our technologies, future revenue streams, research programs or drug product candidates or grant licenses on terms that may not be favorable to us, which will reduce our future returns and affect our future operating flexibility. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our pipeline product development or commercialization efforts or grant rights to others to develop and market drug product candidates that we would otherwise prefer to develop and market ourselves.

Previous wording

Pursuant to a non-exclusive license agreement with XOMA Ltd. for the humanization technology used in the development of MNPR-101, we are obligated to pay XOMA Ltd. clinical, regulatory and sales milestones which could reach up to $14.925 million if we achieve all milestones for MNPR-101. The agreement does not require the payment of sales royalties. There can be no assurance that we will achieve any milestones. As of March 8, 2024, we had not reached any milestones and had not been required to pay XOMA Ltd. any funds under this license agreement. The first milestone payment is payable upon first dosing of a human patient in a Phase 2 clinical trial.

Current wording

To humanize our MNPR-101 antibody, we have taken a non-exclusive license to XOMA (US) LLC’s humanization technology and know-how. Humanization involves replacing most of the non-critical parts of the mouse sequence of an antibody with the human sequence to minimize the ability of the human immune system to recognize this antibody as foreign. As such, MNPR-101 has been engineered to be 95% human sequence using the XOMA technology. Under the terms of the non-exclusive license with XOMA Ltd., we are to pay only upon the achievement of clinical, regulatory and sales milestones, potentially totaling $14.925 million. The agreement does not require the payment of sales royalties. As of March 14, 2025, we had not reached any milestones and had not been required to pay XOMA Ltd. any funds under this license agreement. The first milestone payment is payable upon first dosing of a human patient in a Phase 2 clinical trial. We are currently conducting Phase 1 clinical trials and cannot reliably predict when we will be able to commence a Phase 2 clinical trial, if at all.

Previous wording

We are currently leasing office space on a month-to-month basis for our executive headquarters at 1000 Skokie Blvd., in the Village of Wilmette, Illinois for $4,238 per month.

Current wording

We recently entered into a 36-month lease beginning April 1, 2025 for our executive headquarters at 1000 Skokie Blvd in the Village of Wilmette, Illinois at a monthly rate of $3,580/month, and we also have a month-to-month lease for additional space at the same location for $2,379 per month. We also recently entered into a lease for a small wet laboratory space and certain equipment at the Helix 51 Bioscience Incubator at The Rosalind Franklin University of Medicine and Science in North Chicago, Illinois at a rate of $1,000/month, which is cancellable after 6 months with 30 days advance written notice.