BOTHELL, WA--(Marketwired - Mar 31, 2016) - Marina Biotech, Inc. (
"During 2015, we continued to see the clinical advancement of our SMARTICLES delivery technology through licensees ProNAi Therapeutics and Mirna Therapeutics, as well as the expansion of our intellectual property estate with key patent issuances in the U.S., Europe and Japan," stated J. Michael French, president and chief executive officer of Marina Biotech. "In addition, the past few months have presented us with some great traction within the nucleic acid sector. We recently entered into two agreements that will advanced our delivery technologies in the emerging field of gene editing. These two transactions represent the first opportunity to prove that our SMARTICLES technology would effectively deliver these types of novel compounds. Although these are not the transformative transactions that we anticipated closing in 2015, these transactions continue to build downstream success-based milestones and royalties for the company."
Mr. French continued, "Although we have pursued, and continue to pursue, additional licensing and partnering opportunities, our limited cash runway necessitated the initiation of a formal process to identify potential strategic partners to allow for the continued advancement of our proprietary nucleic acid drug discovery platform and clinical pipeline. The proposed sale of our RNA assets to Microlin Bio, with whom we entered into a term sheet in March 2016, provides such an opportunity. We believe that our proprietary chemistries and delivery technologies are best suited for development of therapeutic compounds that modulate non-coding RNA. Therefore, we feel strongly that these technologies are synergistic and complimentary to Microlin's novel microRNA assets and that Microlin is in a stronger position to advance these assets. As we go through this process with Microlin, we will continue to pursue licensing and partnering opportunities in order to increase value to our shareholders."
KEY 2015 AND RECENT ACTIVTIIES
KEY 2015 AND RECENT IP ISSUANCES AND ALLOWANCES
2015 FINANCIAL RESULTS
Cash
At December 31, 2015, we had cash of $0.7 million compared to $1.8 million at December 31, 2014..
Net Income (Loss)
Net income for the year ended December 31, 2015 was $3.3 million compared to a net loss of $6.5 million for the year ended December 31, 2014. This change was due primarily to changes in the fair value of certain warrant liabilities and derivatives, interest expense charges in 2014, and increased operating expenses related to limited growth of business operations in 2015. Operating losses for the year ended December 31, 2015 increased slightly from $3.5 million for the year ended December 31, 2014, to $4.0 million for the year ended December 31, 2015.
Revenue
Revenue of $0.7 million was recorded for the year ended December 31, 2015 from milestone payments with Mirna Therapeutics and MiNA Therapeutics, compared to revenues of $0.5 million representing the upfront fee for execution of the MiNA licensing agreement during the year ended December 31, 2014.
Operating Expenses
Research and development (R&D) expense increased slightly from $0.7 million for the year ended December 31, 2014, to $0.8 million for the year ended December 31, 2015. R&D expenses were primarily related to increased preclinical and clinical development expenses, as well as an increase in sublicense fees. General and administrative (G&A) costs increased from $3.3 million for the year ended December 31, 2014 to $3.9 million for the year ended December 31, 2015. G&A increases were primarily due to an increase in legal fees for corporate legal services, SEC filings, patent filings and licensing activities, as well as an increase in stock-based compensation expenses, partially offset by a decrease in travel-related costs.
Other Income and Expense
Net other income and expense increased from $3.0 million in the year ended December 31, 2014 to $7.3 million for the year ended December 31, 2015. Net other income in 2015 relates to the change in the fair value liability for price adjustable warrants. Net other expense in 2014 relates primarily to changes in fair value measurements of certain liabilities of $2.5 million for the year ended December 31, 2014. These changes in fair value are related to stock price changes over each period impacting the fair value of certain liabilities and derivatives. Additionally, we recorded an expense of $1.0 million related to the fair value of an embedded feature in the Series C Convertible Preferred Stock recorded as interest expense and a $0.5 million gain on settled liabilities in the year ended December 31, 2014.
About Marina Biotech, Inc.
Marina Biotech is an oligonucleotide therapeutics company with broad drug discovery technologies providing the ability to develop proprietary single and double-stranded nucleic acid therapeutics including siRNAs, microRNA mimics, antagomirs, and antisense compounds, including messengerRNA therapeutics. These technologies were built via a roll-up strategy to discover and develop different types of nucleic acid therapeutics in order to modulate (up or down) a specific protein(s) which is either being produced too much or too little thereby causing a particular disease. We believe that the Marina Biotech technologies have unique strengths as a drug discovery engine for the development of nucleic acid-based therapeutics for rare and orphan diseases. Further, we believe Marina Biotech is the only company in the sector that has a delivery technology in human clinical trials with differentiated classes of payloads, through licensees ProNAi Therapeutics and Mirna Therapeutics, delivering single-stranded and double-stranded nucleic acid payloads, respectively. Our novel chemistries and other delivery technologies have been validated through license agreements with Roche, Novartis, Monsanto, and Tekmira. The Marina Biotech pipeline currently includes a clinical program in Familial Adenomatous Polyposis (a precancerous syndrome) and a preclinical program in myotonic dystrophy. Marina Biotech's goal is to improve human health through the development of RNAi- and oligonucleotide-based compounds and drug delivery technologies that together provide superior therapeutic options for patients. Additional information about Marina Biotech is available at www.marinabio.com.
Marina Biotech Forward-Looking Statements
Statements made in this news release may be forward-looking statements within the meaning of Federal Securities laws that are subject to certain risks and uncertainties and involve factors that may cause actual results to differ materially from those projected or suggested. Factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to: (i) the ability of Marina Biotech to obtain additional funding; (ii) the ability of Marina Biotech to attract and/or maintain manufacturing, research, development and commercialization partners; (iii) the ability of Marina Biotech and/or a partner to successfully complete product research and development, including preclinical and clinical studies and commercialization; (iv) the ability of Marina Biotech and/or a partner to obtain required governmental approvals; and (v) the ability of Marina Biotech and/or a partner to develop and commercialize products prior to, and that can compete favorably with those of, competitors. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in Marina Biotech's most recent filings with the Securities and Exchange Commission. Marina Biotech assumes no obligation to update or supplement forward-looking statements because of subsequent events.
MARINA BIOTECH, INC. AND SUBSIDIARIES | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
December 31, | December 31, | |||||||||
(In thousands, except share and per share data) | 2014 | 2015 | ||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash | $ | 1,824 | $ | 710 | ||||||
Accounts receivable | 500 | - | ||||||||
Prepaid expenses and other current assets | 192 | 140 | ||||||||
Total current assets | 2,516 | 850 | ||||||||
Intangible assets | 6,700 | 6,700 | ||||||||
Other assets | - | 45 | ||||||||
Total assets | $ | 9,216 | $ | 7,595 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 687 | $ | 763 | ||||||
Accrued payroll and employee benefits | 183 | 377 | ||||||||
Other accrued liabilities | 1,072 | 1,296 | ||||||||
Total current liabilities | 1,942 | 2,436 | ||||||||
Fair value liability for price adjustable warrants | 9,225 | 2,491 | ||||||||
Fair value of stock to be issued to settle liabilities | 75 | 60 | ||||||||
Deferred tax liabilities | 2,345 | 2,345 | ||||||||
Total liabilities | 13,587 | 7,332 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' equity (deficit): | ||||||||||
Preferred stock, $0.01 par value; 100,000 shares authorized | ||||||||||
Series C convertible preferred stock, $0.01 par value; 1,200 shares authorized, 1,200 and 1,020 shares issued and outstanding at December 31, 2014 and 2015, respectively (preference in liquidation of $5,100 at December 31, 2015) | - | - | ||||||||
Series D convertible preferred stock, $0.01 par value; 0 and 170 shares issued and outstanding at December 31, 2014 and 2015, respectively (preference in liquidation of $850 at December 31, 2015) | - | - | ||||||||
Common stock, $0.006 par value; 180,000,000 shares authorized, 25,523,216 and 27,704,340 shares issued and outstanding at December 31, 2014 and 2015, respectively | 153 | 166 | ||||||||
Additional paid-in capital | 333,264 | 334,548 | ||||||||
Accumulated deficit | (337,788 | ) | (334,451 | ) | ||||||
Total stockholders' equity (deficit) | (4,371 | ) | 263 | |||||||
Total liabilities and stockholders' equity (deficit) | $ | 9,216 | $ | 7,595 | ||||||
See report of independent registered public accounting firm and accompanying notes to the consolidated financial statements. | ||||||||||
MARINA BIOTECH, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
Year Ended December 31, | |||||||||
(In thousands, except share and per share data) | 2014 | 2015 | |||||||
License and other revenue | $ | 500 | $ | 680 | |||||
Operating expenses: | |||||||||
Research and development | 686 | 801 | |||||||
General and administrative | 3,334 | 3,868 | |||||||
Total operating expenses | 4,020 | 4,669 | |||||||
Loss from operations | (3,520 | ) | (3,989 | ) | |||||
Other income (expense): | |||||||||
Interest and other expense | (1,006 | ) | (1 | ) | |||||
Change in fair value liability for price adjustable warrants | 13 | 7,309 | |||||||
Change in fair value of stock reserved for issuance to settle liabilities | (2,503 | ) | - | ||||||
Gain on debt extinguishment | 5 | - | |||||||
Gain on settled liabilities | 534 | 18 | |||||||
Total other income (expense), net | (2,957 | ) | 7,326 | ||||||
Net income (loss) | (6,477 | ) | 3,337 | ||||||
Deemed dividend related to discount on beneficial conversion feature in Series C convertible preferred shares | (6,000 | ) | - | ||||||
Deemed dividend related to discount on beneficial conversion feature in Series D convertible preferred shares | - | (690 | ) | ||||||
Net income (loss) applicable to common stockholders | $ | (12,477 | ) | $ | 2,647 | ||||
Net income (loss) per common share | |||||||||
Basic | $ | (0.51 | ) | $ | 0.10 | ||||
Diluted | $ | (0.51 | ) | $ | (0.14 | ) | |||
Shares used in computing net loss per share | |||||||||
Basic | 24,634,535 | 26,302,394 | |||||||
Diluted | 24,634,535 | 32,874,955 | |||||||
See report of independent registered public accounting firm and accompanying notes to the consolidated financial statements. | |||||||||
MARINA BIOTECH, INC. AND SUBSIDIARIES | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Year Ended December 31, | |||||||||||
(In thousands) | 2014 | 2015 | |||||||||
Operating activities: | |||||||||||
Net income (loss) | $ | (6,477 | ) | $ | 3,337 | ||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||||||
Non-cash gain on debt extinguishment | (5 | ) | - | ||||||||
Non-cash interest expense | 1,006 | - | |||||||||
Non-cash license expense | - | 192 | |||||||||
Non-cash gain on settlement of liabilities | (534 | ) | (18 | ) | |||||||
Share based compensation expense | 277 | 504 | |||||||||
Changes in fair market value of liabilities: | |||||||||||
Stock reserved for issuance to settle liabilities | 2,503 | - | |||||||||
Price adjustable warrants | (13 | ) | (7,309 | ) | |||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (495 | ) | 500 | ||||||||
Prepaid expenses and other current assets | (181 | ) | 52 | ||||||||
Accounts payable | (563 | ) | 94 | ||||||||
Accrued restructuring | (12 | ) | - | ||||||||
Accrued and other liabilities | (285 | ) | 483 | ||||||||
Net cash used in operating activities | (4,779 | ) | (2,165 | ) | |||||||
Investing activities: | |||||||||||
Increase in other assets | - | (45 | ) | ||||||||
Net cash used in investing activities | - | (45 | ) | ||||||||
Financing activities: | |||||||||||
Proceeds from sales of preferred shares and warrants, net | 5,929 | 1,095 | |||||||||
Payments of notes payable | (250 | ) | - | ||||||||
Proceeds from exercise of warrants | 23 | 1 | |||||||||
Insurance financing | (8 | ) | - | ||||||||
Net cash provided by financing activities | 5,694 | 1,096 | |||||||||
Net increase (decrease) in cash | 915 | (1,114 | ) | ||||||||
Cash -- beginning of year | 909 | 1,824 | |||||||||
Cash -- end of year | $ | 1,824 | $ | 710 | |||||||
Non-cash financing activities: | |||||||||||
Reclassification of fair value liability for price adjustable warrants exercised | $ | 1,917 | $ | - | |||||||
Issuance of common stock to settle liabilities | $ | 3,517 | $ | 207 | |||||||
Fair value of warrants to purchase common stock issued to settle liabilities | $ | - | $ | 65 | |||||||
Debt conversion to common shares | $ | 1,479 | $ | - | |||||||
Deemed dividend to Series C convertible preferred stockholders | $ | 6,000 | $ | - | |||||||
Deemed dividend to Series D convertible preferred stockholders | $ | - | $ | 690 | |||||||
Par value of common stock issued upon conversion of Series C convertible preferred stock | $ | - | $ | 7 | |||||||
Par value of common stock issued upon conversion of Series D convertible preferred stock | $ | - | $ | 4 | |||||||
Supplemental Disclosure | |||||||||||
Cash paid for interest | $ | 83 | $ | - | |||||||
See report of independent registered public accounting firm and accompanying notes to the consolidated financial statements. | |||||||||||
Contact Information:
For Marina inquires:
J. Michael French
President and CEO
Marina Biotech, Inc.
Email: admin@marinabio.com
Phone: +1 (425) 892-4322