MEDICINOVA, INC. You should read the following discussion and analysis together with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those expressed or implied in any forward-looking statements as a result of various factors, including those set forth under the caption "Item 1A. Risk Factors."
Overview Background
We are a biopharmaceutical company focused on developing novel, therapeutics for
the treatment of serious diseases with unmet medical needs and a commercial
focus on
We have incurred significant net losses since our inception. For the year ended
Upon completion of proof-of-concept Phase 2 clinical trials, we intend to
discuss strategic alliances with leading pharmaceutical or biotechnology
companies who seek late stage product candidates to support further clinical
development and product commercialization. Depending on decisions we may make as
to further clinical development, we may seek to raise additional capital. We may
also pursue potential partnerships and potential acquirers of license rights to
our programs in markets outside
Critical Accounting Policies
Our management's discussion and analysis of our financial condition and results
of operations is based on our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in
Our significant accounting policies are more fully described in Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Our most critical accounting estimates include research, development and patent expenses which impacts operating expenses and accrued liabilities. We review our estimates and assumptions periodically and reflect the effects of revisions in the period in which they are deemed to be necessary. We believe that the following accounting policies are critical to the judgments and estimates used in preparation of our consolidated financial statements.
Research, Development and Patent Expenses
Our research, development and patents expenses consist primarily of license fees related to our product candidates, salaries and related employee benefits, costs associated with the preclinical and clinical development of our product development programs, costs associated with non-clinical activities, such as regulatory expenses, and
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pre-commercialization manufacturing development activities. We use external service providers to manufacture our compounds to be used in clinical trials and for the majority of the services performed in connection with the preclinical and clinical development of our product candidates. Research, development and patents expenses include fees paid to consultants, contract research organizations, contract manufacturers and other external service providers, including professional fees and costs associated with legal services, patents and patent applications for our intellectual property. Internal research and development expenses include costs of compensation and other expenses for research and development personnel, supplies, facility costs and depreciation. To date, our accrued research, development and patent expenses have not differed significantly from the actual expenses incurred.
The following table summarizes our research, development and patent expenses for
the periods indicated for each of our product development programs. To the
extent that costs, including personnel costs, are not tracked to a specific
product development program, such costs are included in the "Other R&D expense"
category (in thousands):
Year Ended December 31,
2021 2020
External development expense:
MN-221 $ 11 $ 2
MN-166 5,962 4,250
MN-001 192 197
MN-029 3 3
Other 28 240
Total external development expense 6,196 4,692
R&D personnel expense 1,378 2,149
R&D facility and depreciation expense 47 47
Patent expense 438 357
Other R&D expense 479 240
Total research, development and patent expense
Recent Accounting Pronouncements
The impact of recent accounting pronouncements is more fully described in Note 1 of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Results of Operations
Comparison of the Years ended
Revenues
We recognized
Research, Development and Patent Expenses
Research, development and patent expenses for the year ended
General and Administrative
General and administrative expenses for the year ended
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100% approval in 2020, including a decrease in the estimated fair value of the
options granted for the year ended
Other Expense, net
Other expense for the years ended 2021 and 2020 was approximately
Interest Income
Interest income for the year ended
Liquidity and Capital Resources
We incurred losses of
The following table shows a summary of our cash flows for the years ended
2021 2020
Net cash (used in) provided by:
Operating activities (9,382 ) (10,826 )
Investing activities (29 ) (36 )
Financing activities 20,778 7,106
Total $ 11,367 $ (3,756 )
Equity Financing
On
For the year ended
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Factors That May Affect Future Financial Condition and Liquidity
As of
Our future funding requirements will depend on many factors, including, but not limited to:
• progress in, and the costs of, future planned clinical trials and other
research and development activities;
• the scope, prioritization and number of our product development programs;
• our obligations under our license agreements, pursuant to which we may be
required to make future milestone payments upon the achievement of various
milestones related to clinical, regulatory or commercial events;
• our ability to establish and maintain strategic collaborations, including
licensing and other arrangements, and to complete acquisitions of
additional product candidates;
• the time and costs involved in obtaining regulatory approvals;
• the costs of securing manufacturing arrangements for clinical or
commercial production of our product candidates;
• the costs associated with any expansion of our management, personnel,
systems and facilities;
• the costs associated with any litigation;
• the costs associated with the operations or wind-down of any business we
may acquire;
• the costs involved in filing, prosecuting, enforcing and defending patent
claims and other intellectual property rights; and
• the costs of establishing or contracting for sales and marketing
capabilities and commercialization activities if we obtain regulatory
approval to market any of our product candidates.
At
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