MONOPAR THERAPEUTICS INC.
TABLE OF CONTENTS
| Page |
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| Part I |
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| Item 1. | Business | 7 |
| Item 1A. | Risk Factors | 20 |
| Item 1C. | Cybersecurity | 55 |
| Item 2. | Properties | 55 |
| Item 3. | Legal Proceedings | 55 |
| Item 4. | Mine Safety Disclosures | 55 |
| Part II |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 56 |
| Item 6. | [Reserved] | 56 |
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 57 |
| Item 8. | Financial Statements and Supplementary Data | 65 |
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 65 |
| Item 9A. | Controls and Procedures | 65 |
| Item 9B. | Other Information | 66 |
| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 66 |
| Part III |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 66 |
| Item 11. | Executive Compensation | 66 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 66 |
| Item 13. | Certain Relationships and Related Transactions and Director Independence | 66 |
| Item 14. | Principal Accountant Fees and Services | 66 |
| Part IV |
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| Item 15. | Exhibits and Financial Statement Schedules | 67 |
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 in order for us to support continued clinical, regulatory and commercial development of our programs and to make contractual future milestone payments, 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, the approval processes and, if applicable, commercialization; |
| ● | 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 any 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 copper-chelating therapies and radiopharmaceutical therapeutics and imaging agents; |
| ● | the uncertainty of timeframes for our clinical trials and regulatory reviews for approval to market products; |
| ● | uncertainties related to the regulatory discussions we may initiate related to ALXN1840 and the outcome(s) thereof; |
| ● | potential delays and/or additional significant expenses related to developing and filing a New Drug Application (“NDA”) for ALXN1840; |
| ● | our ability to address the fulfillment and logistical challenges posed by the potential time-limited shelf-life of our current radiopharmaceutical programs 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 in the future into our drug candidates; |
| ● | market uptake and competitiveness in terms of pricing, efficacy and safety, of any products for which we receive marketing approval, and our ability to competitively market and position any such products as compared to larger pharmaceutical companies; |
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; |
| ● | U.S. political leadership changes that may affect the economy and future laws, tariffs, and regulations or executive orders including increased or decreased governmental control of healthcare and pharmaceuticals, governmental regulations affecting cost requirements and structures for importing ingredients or products or selling therapeutic or imaging products, and governmental legislation, executive orders and/or tariffs affecting other industries which may indirectly increase our costs of obtaining goods and services and our cost of capital; |
| ● | the uncertain impact of any COVID-19 resurgence or of another pandemic may 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 the potential for an economic recession, resulting in higher costs for obtaining goods and services and/or make financing more difficult to obtain on acceptable terms or at all; |
| ● | the uncertain impact of the Russia-Ukraine war, the Israel-Hamas war, and/or any potential future conflicts on our clinical material manufacturing expenses and timelines, as well as on general political, economic, trade and financial market conditions; and |
| ● | the 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 whether such risks will materialize or that other risks will not 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 biopharma 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. |
| ● | Our ability to raise sufficient funds in order for us to support continued clinical, regulatory and commercial development of our programs and to make contractual future milestone payments, as well as our ability to further raise additional funds in the future to support any existing or future product candidate programs through completion of clinical trials, the approval processes and, if applicable, commercialization. |
| ● | Although a completed pivotal Phase 3 trial with ALXN1840 met its primary endpoint as described in this report, Alexion Pharmaceuticals, Inc (“Alexion”) terminated the ALXN1840 program in Wilson disease based on a review of results from the Phase 2 mechanistic trials and discussions with the regulatory authorities. In the near term, we will focus on assembling a regulatory package and submitting an NDA, all with uncertain outcomes. |
| ● | The regulatory approval process can be lengthy, expensive and uncertain. The U.S. Food and Drug Administration (“FDA”) and other regulatory agencies around the world may require us to perform additional nonclinical and/or clinical studies to obtain ALXN1840 approval, which we may be unable to raise sufficient capital to complete or the results of which may not meet clinical and/or statistical significance required by the FDA and other regulatory agencies. |
| ● | 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 the necessary regulatory approvals will be delayed or prevented, which could materially delay or terminate 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 and/or at defined quality specifications, or are unable to obtain regulatory approvals for the manufacturing facility, we may be unable to develop and to meet the demand for our products as well as lose time to market and associated potential revenues. |
| ● | We rely on qualified third parties to conduct our active pharmaceutical ingredient manufacturing, our drug product manufacturing, non-clinical studies, and 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, which would adversely affect our financial condition. |
| ● | Radiopharmaceutical technology is a relatively novel approach to cancer imaging and treatment, which may create significant and potentially unpredictable challenges for such technology, including the availability of radioisotopes, potential misconception about its safety, and low market uptake due to its novelty. Perceptions of these challenges may pose funding challenges as we devote efforts to our radiopharmaceutical programs. |
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 political, 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 introduce additional financing difficulties and/or costs, any of which could adversely affect our clinical and preclinical programs and our financial condition. |
| ● | Market variables, such as inflation of product costs, labor rates and fuel, freight and energy costs, as well as geopolitical events may significantly increase our operating and administrative expenses. |
| ● | Unstable market and economic conditions, such as volatility in the financial markets due to concerns about bank stability and economic challenges due to inflation, may limit our ability to raise funds, potentially causing us to delay, restructure or cease our operations. |
| ● | U.S. political leadership changes may affect the economy and future laws, tariffs, and regulations or executive orders including increased or decreased governmental control of healthcare and pharmaceuticals, governmental regulations impacting cost requirements and structures for importing ingredients or products or selling therapeutic or imaging products, and governmental legislation, executive orders and/or tariffs affecting other industries which may indirectly increase our costs of obtaining goods and services and our cost of 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, more robust 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 and/or technologies which are essential to the development and marketing of 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 may experience significant program delays and increased operational and compensation costs, and our business may be materially disrupted. |
| ● | Any future or long-term impacts of COVID-19 or of 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 capital. |
