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MediciNova Reports Second Quarter 2010 Results

About MediciNova

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, COPD exacerbations, multiple sclerosis and other neurologic conditions, 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 COPD exacerbations and MN-166 for the treatment of multiple sclerosis and other central nervous system disorders. We intend to establish strategic collaborations to support further development of our prioritized product candidates. MediciNova will seek to monetize its other product candidates. For more information on MediciNova, Inc., please visit www.medicinova.com.

The MediciNova, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3135

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," "will," "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 of 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, MediciNova's ability to realize the anticipated strategic and financial benefits from its acquisition of Avigen, Inc., to integrate the two ibudilast development programs and to pursue discussions with potential partners to secure a strategic collaboration to advance the clinical development of the combined development program, 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, 2009 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.  

MEDICINOVA, INC.    
CONSOLIDATED BALANCE SHEETS    
     
  June 30,2010 December 31, 2009  
  (Unaudited)  
Assets    
Current assets:    
Cash and cash equivalents $ 25,357,050 $ 19,241,581
Investment securities-current  9,902,415  24,254,987
ARS put-current  1,587,881  2,557,007
Restricted letter of credit   500,292  — 
Prepaid expenses and other current assets  1,147,200  869,649
Total current assets  38,494,838  46,923,224
Restricted cash  28,296,766  30,045,965
Restricted investment  643,098  676,499
Restricted letter of credit  —   500,042
In-process research and development  4,800,000  4,800,000
Goodwill  9,368,205  9,142,205
Property and equipment, net  90,381  153,547
Long-term investments  1,769,468  2,085,425
Other assets  167,986   — 
Total assets $ 83,630,742 $ 94,326,907
Liabilities and Stockholders' Equity    
Current liabilities:    
Accounts payable $ 514,605 $ 1,300,271
ARS loan payable  2,002,624  17,605,485
Current portion of long-term debt    2,178,849  —
Escrow holdback  1,094,324  1,094,045
Accrued expenses  1,184,638  1,276,036
Accrued compensation and related expenses  289,327  1,146,960
Total current liabilities  7,264,367  22,422,797
Management transition plan liability  643,098  676,499
Deferred tax liability  1,956,000  1,956,000
Convertible notes  27,571,523  29,258,137
Long-term debt, less current portion  11,904,359  — 
Total liabilities  49,339,347  54,313,433
     
Commitments and contingencies    
     
Stockholders' equity:    
Preferred stock, $0.01 par value; 500,000 shares authorized at June 30, 2010 and December 31, 2009; no shares outstanding at June 30, 2010 and December 31, 2009   —   — 
Common stock, $0.001 par value; 30,000,000 shares authorized at June 30, 2010 and December 31, 2009; 12,448,520 and 12,172,510 shares issued at June 30, 2010 and December 31, 2009, respectively, and 12,402,713 and 12,122,217 shares outstanding at June 30, 2010 and December 31, 2009, respectively  12,449  12,170
Additional paid-in capital  292,401,018  288,652,712
Accumulated other comprehensive loss  (63,375)  (64,914)
Treasury stock, at cost; 45,807 shares at June 30, 2010 and 50,293 shares at December 31, 2009  (1,212,288)  (1,235,395)
Deficit accumulated during the development stage  (256,846,409)  (247,351,099)
Total stockholders' equity  34,291,395  40,013,474
Total liabilities and stockholders' equity $ 83,630,742 $ 94,326,907
     

 

MEDICINOVA, INC.          
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)          
           
  Three months ended June 30, Six months ended June 30, Period from September 26, 2000 (inception) to June 30, 2010
  2010   2009   2010   2009  
Revenues $ —  $ —  $ —  $ —  $ 1,558,227
Operating expenses:          
Cost of revenues  —   —   —   —   1,258,421
Research and development  2,304,518  2,745,816  5,253,974  5,846,717  149,799,841
General and administrative  1,847,284  2,198,883  4,134,236  4,363,077  93,161,234
Total operating expenses  4,151,802  4,944,699  9,388,210  10,209,794  244,219,496
Operating loss  (4,151,802)  (4,944,699)  (9,388,210)  (10,209,794) (242,661,269)
Gain/(impairment charge) on investment securities  64,018  114,155  56,539  140,826  (893,196)
Foreign exchange gain/(loss)  2,020  (17,912)  (1,726)   9,176  (103,507)
Other expense  (43,324)  —  (74,631)   —  (74,631)
Interest expense  (406,269)  (65,118)  (450,443)   (107,595)  (692,815)
Other income  201,297  248,738  362,410  509,165  18,981,946
Income taxes  —   —   751  (5)  (39,815)
Net loss  (4,334,060)  (4,664,836)  (9,495,310)  (9,658,227) (225,483,287)
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 $ (4,334,060) $ (4,664,836) $ (9,495,310) $ (9,658,227) $ (256,846,409)
Basic and diluted net loss per common share $ (0.35) $ (0.39) $ (0.77) $ (0.80)  
Shares used to compute basic and diluted net loss per common share 12,431,395 12,072,027  12,350,697  12,072,027  
CONTACT:  MediciNova, Inc.
          Shintaro Asako, Chief Financial Officer
          (858) 373-1500
          info@medicinova.com

MediciNova, Inc. Logo

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