BOTHELL, WA--(Marketwired - Feb 25, 2015) - Marina Biotech, Inc. (
"The Company continued to make significant progress toward commercializing our nucleic acid therapeutics platform throughout 2014," stated J. Michael French, president and chief executive officer of Marina Biotech. "Foremost, we executed on our objective to continue to pursue and consummate additional licensing and partnering opportunities by establishing another SMARTICLES® license, this time with MiNA Therapeutics, to deliver now a third type of nucleic acid payload - small activating RNA. In addition, as part of our rare disease pipeline focus, we established a strategic partnership with Rosetta Genomics and initiated a clinical study to identify novel microRNA candidates for the treatment of Duchenne Muscular Dystrophy (DMD), one of our preclinical programs. With regard to our product pipeline, we made great strides toward restarting our Phase 1 program for CEQ508, a product in clinical development for the treatment of Familial Adenomatous Polyposis. In January 2015, we completed our analysis of Cohort 2, applied for Fast Track designation with the U.S. Food and Drug Administration and identified a new contract manufacturing organization. We intend to manufacture new clinical material before dosing Cohort 3 to ensure the availability of sufficient material to complete the Phase 1 and then intend to move quickly into the Phase 2 trial with a more efficient fermentation process. Though this will delay our dosing of Cohort 3, we do not expect it to delay our projected commercial launch in 2018. I am looking forward to additional progress in 2015 as I expect Marina to deliver advances to our pipeline programs and significant pharma collaborations."
Regarding our intellectual property estate, over 40 new patent grants were issued over the last six months of 2014 covering our major technology platforms, including SMARTICLES, tkRNAi, DILA2, lipopeptide delivery, and formulation processes. Marina Biotech's global intellectual property estate covering its biochemistry and delivery technologies has expanded to over 144 issued and allowed patents, and further includes over 90 pending U.S. and foreign patent applications. We believe the patent portfolio provides global protection and freedom to operate for the development of nucleic acid-based therapeutics, as well as molecular diagnostics, applicable to a wide range of human conditions and diseases.
KEY RECENT IP ISSUANCES AND ALLOWANCES
- SMARTICLES
- Patent allowance in the United States (12/807,707) and an issuance in Japan (Pat No 5,571,308) covering a leading SMARTICLES formulation for RNA delivery, NOV340. NOV340 is currently used for delivery of a single-stranded DNA decoy and a double-stranded microRNA mimic in clinical studies by licensees ProNAi Therapeutics and Mirna Therapeutics, respectively.
- Patent issued in Australia (Pat No 2008309880) that broadens the compositional scope of NOV340-like formulations to discourage design-around and to provide further options for clinic development.
- Patent issued in Japan (Pat No 5,480,764) covering serum-stable formulations of the NOV340-like formulations.
- Patent issued in Japan (Pat No 5,424,885) covering processes for making amphoteric liposomes of the NOV340-like formulations.
- Patent issuances in the United States (Pat No 8,580,297), as well as an allowance in Europe (07856910.0) covering lipid assemblies composed of a broad genus of amphoteric molecules.
- transKingdom RNAi
- Patent issued in Japan (Pat No 5,601,756) covering the tkRNAi bacterial-mediated delivery technology, which along with Europe (Pat No 1,838,838) provides extraordinarily broad coverage of the technology.
- Patent allowed in the United States (Pat No 12/632,985) covering a plasmid carrying a key prokaryotic promoter for the technology and a bacterial carrier therefor.
- Di-terminal Amino Acid Lipids
- Patents issued in the United States (Pat Nos. 8,501,824; 8,877,729), Europe (EP Pat No 2,157,982), Japan (Pat No 5,475,643), China, Australia, as well as other key jurisdictions broadly covering the library of DILA2 delivery molecules and their uses with strong composition of matter claims.
- Lipopeptide Delivery Technologies
- Patent issuances in China (Pat No 200880110140.7) covering part of the Company's proprietary lipopeptide delivery technology which are molecules with enhanced nucleic acid delivery capabilities and include lipid-like tails.
- Patent issuances in the United States (Pat No 8,299,236) and Europe (EP Pat No 2,145,957) covering the Company's peptide-enhanced delivery formulations.
2014 FINANCIAL RESULTS
Cash
At December 31, 2014, we had cash of $1.8 million and assets totaling $9.2 million compared to cash of $0.9 million and assets totaling $7.7 million at December 31, 2013.
Net loss
Net loss for the year ended December 31, 2014 was $6.5 million compared to net loss of $1.6 million for the year ended December 31, 2013. This change was due primarily to changes in the fair value of certain liabilities and derivatives, changes in other income and expenses related to debt extinguishment accounting in 2013, and increased operating expenses related to 2014 resumption of business operations.
Revenue
Revenue of $0.5 million was recorded for the year ended December 31, 2014 for a licensing agreement with MiNA Therapeutics, compared to revenues of $2.1 million for certain agreements related to the sale or licensing of our chemistry and delivery technologies during the year ended December 31, 2013.
Operating Expenses
Research and development (R&D) expense remained relatively flat at $0.7 million for the years ended December 31, 2013 and 2014. R&D expenses were primarily related to increased investment in CEQ508 product development offset by reduced sublicensing fees. G&A costs increased from $1.8 million for the year ended December 31, 2013 to $3.3 million for the year ended December 31, 2014. General and administrative (G&A) increases were primarily due to expenses related to regaining SEC compliance, conducting our annual shareholder meeting, and director and officer compensation. R&D and G&A expense increases were partially offset by reversal of compensation charges associated with staff reductions.
Other Income and Expense
Net other expense increased from $1.2 million in the year ended December 31, 2013 to $3.0 million for the year ended December 31, 2014. Changes in fair value measurements of certain liabilities and derivatives resulted in a gain of $1.0 million for the year ended December 31, 2013 compared to a loss of $2.5 million for the year ended December 31, 2014. This change in fair value is related to stock price changes over each period impacting the fair value of certain liabilities and derivatives. Other expenses related to interest, fair value adjustments of debt features, and debt extinguishment accounting totaled $2.3 million for the year ended December 31, 2013, compared to 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 for the year ended December 31, 2014. Additionally, we sold equipment for an immaterial gain in the year ended December 31, 2013 and we recorded 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, MiNA, 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 per share data) | 2013 | 2014 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash | $ | 909 | $ | 1,824 | |||||||
| Accounts receivable | 5 | 500 | |||||||||
| Prepaid expenses and other current assets | 128 | 192 | |||||||||
| Total current assets | 1,042 | 2,516 | |||||||||
| Intangible assets | 6,700 | 6,700 | |||||||||
| Total assets | $ | 7,742 | $ | 9,216 | |||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 1,614 | $ | 687 | |||||||
| Accrued payroll and employee benefits | 1,505 | 183 | |||||||||
| Accrued interest | 147 | - | |||||||||
| Other accrued liabilities | 1,315 | 1,072 | |||||||||
| Accrued restructuring | 12 | - | |||||||||
| Notes payable | 1,615 | - | |||||||||
| Other debt | 8 | - | |||||||||
| Total current liabilities | 6,216 | 1,942 | |||||||||
| Fair value liability for price adjustable warrants | 5,226 | 9,225 | |||||||||
| Fair value of stock to be issued to settle liabilities | 1,019 | 75 | |||||||||
| Deferred tax liabilities | 2,345 | 2,345 | |||||||||
| Total liabilities | $ | 14,806 | $ | 13,587 | |||||||
| Commitments and contingencies | |||||||||||
| Stockholders' deficit: | |||||||||||
| Preferred stock, $.01 par value; 100,000 shares authorized, 0 and 1,200 shares of Series C convertible preferred stock issued and outstanding at December 31, 2013 and 2014, respectively (preference in liquidation of Series C convertible preferred stock of $6,000,000 at December 31, 2014) | - | - | |||||||||
| Common stock, $0.006 par value; 180,000,000 shares authorized, 16,937,661 and 25,523,216 shares issued and outstanding at December 31, 2013 and 2014, respectively | 102 | 153 | |||||||||
| Additional paid-in capital | 324,145 | 333,264 | |||||||||
| Accumulated deficit | (331,311 | ) | (337,788 | ) | |||||||
| Total stockholders' deficit | (7,064 | ) | (4,371 | ) | |||||||
| Total liabilities and stockholders' deficit | $ | 7,742 | $ | 9,216 | |||||||
| 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 per share data) | 2013 | 2014 | |||||||
| License and other revenue | $ | 2,115 | $ | 500 | |||||
| Operating expenses: | |||||||||
| Research and development | 715 | 686 | |||||||
| General and administrative | 1,765 | 3,334 | |||||||
| Total operating expenses | 2,480 | 4,020 | |||||||
| Loss from operations | (365 | ) | (3,520 | ) | |||||
| Other income (expense): | |||||||||
| Interest and other expense | (249 | ) | (1,006 | ) | |||||
| Change in fair value liability for price adjustable warrants | 151 | 13 | |||||||
| Change in fair value of stock reserved for issuance to settle liabilities | 31 | (2,503 | ) | ||||||
| Change in fair value of embedded features in notes payable and amendments to notes payable | 829 | - | |||||||
| Gain (loss) on debt extinguishment | (2,037 | ) | 5 | ||||||
| Gain on equipment disposal | 30 | - | |||||||
| Gain on settled liabilities | - | 534 | |||||||
| Total other expense, net | (1,245 | ) | (2,957 | ) | |||||
| Loss before income tax | (1,610 | ) | (6,477 | ) | |||||
| Income tax benefit | (39 | ) | - | ||||||
| Net loss | $ | (1,571 | ) | $ | (6,477 | ) | |||
| Net loss per common share -- basic and diluted | $ | (0.09 | ) | $ | (0.26 | ) | |||
| Shares used in computing net loss per share -- basic and diluted | 16,937,661 | 24,634,535 | |||||||
| 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) | 2013 | 2014 | ||||||||||
| Operating activities: | ||||||||||||
| Net loss | $ | (1,571 | ) | $ | (6,477 | ) | ||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
| Non-cash (gain)/loss on debt extinguishment | 2,037 | (5 | ) | |||||||||
| Non-cash interest expense | 249 | 1,006 | ||||||||||
| Non-cash gain on settlement of liabilities | - | (534 | ) | |||||||||
| Deferred income tax benefit | (39 | ) | - | |||||||||
| Compensation related to stock options, restricted stock and employee stock purchase plan | 135 | 277 | ||||||||||
| Gain on disposition of property and equipment | (30 | ) | - | |||||||||
| Changes in fair market value of liabilities: | ||||||||||||
| Stock reserved for issuance to settle liabilities | (31 | ) | 2,503 | |||||||||
| Embedded debt features | (829 | ) | - | |||||||||
| Price adjustable warrants | (151 | ) | (13 | ) | ||||||||
| Changes in assets and liabilities: | ||||||||||||
| Accounts receivable | 2 | (495 | ) | |||||||||
| Prepaid expenses and other assets | 22 | (181 | ) | |||||||||
| Accounts payable | 8 | (563 | ) | |||||||||
| Deferred revenue | (115 | ) | - | |||||||||
| Accrued restructuring | (380 | ) | (12 | ) | ||||||||
| Accrued and other liabilities | 978 | (285 | ) | |||||||||
| Net cash provided by (used in) operating activities | 285 | (4,779 | ) | |||||||||
| Investing activities: | ||||||||||||
| Change in restricted cash | 380 | - | ||||||||||
| Proceeds from the sale of property and equipment | 30 | - | ||||||||||
| Net cash provided by investing activities | 410 | - | ||||||||||
| Financing activities: | ||||||||||||
| Proceeds from sales of Series C preferred shares and warrants, net | - | 5,929 | ||||||||||
| Cash payments of notes payable | - | (250 | ) | |||||||||
| Cash proceeds from exercise of warrants | 23 | |||||||||||
| Insurance financing | (2 | ) | (8 | ) | ||||||||
| Net cash provided by (used in) financing activities | (2 | ) | 5,694 | |||||||||
| Net increase in cash | 693 | 915 | ||||||||||
| Cash and cash equivalents -- beginning of year | 216 | 909 | ||||||||||
| Cash and cash equivalents -- end of year | $ | 909 | $ | 1,824 | ||||||||
| 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 | |||||||||
| Debt conversion to common shares | - | $ | 1,479 | |||||||||
| Deemed dividend to Series C convertible preferred stockholders | - | $ | 6,000 | |||||||||
| Supplemental Disclosure | ||||||||||||
| Cash paid for interest | $ | 1 | $ | 83 | ||||||||
| See report of independent registered public accounting firm and accompanying notes to the condensed consolidated financial statements. | ||||||||||||
Contact Information:
For media inquiries:
Ryan Ferrell
ryan.ferrell@hdmz.com
Desk/Mobile: (312) 506-5202
For partnership inquires:
J. Michael French
President and CEO
Marina Biotech, Inc.
admin@marinabio.com
(425) 892-4322