Marina Biotech, Inc. Announces Full Year 2011 Financial Results
Published: Oct 11, 2012
BOTHELL, WA--(Marketwire - October 11, 2012) - Marina Biotech, Inc. (PINKSHEETS: MRNA), a leading RNAi-based drug discovery and development company, today reported financial results for the fiscal year ended December 31, 2011, and provided an update on recent corporate accomplishments and strategic direction.
"The past nine months have been an extremely difficult time for the Company, yet we remain encouraged by the continued interest in both our broad nucleic acid-based drug discovery platform as well as our stand-alone technologies," stated J. Michael French, President and Chief Executive Officer of Marina Biotech. "We continue to strive to raise sufficient capital to meet our current obligations in a timely manner and, more importantly, to continue our focus on novel drug discovery and development. Despite the challenges, since December 2011, we have completed four partnering deals across our discovery platform licensing both chemistry and delivery technologies in the fields of microRNA, DNA interference and agricultural applications. In addition, we made good progress in our Phase 1b/2a clinical program in Familial Adenomatous Polyposis and have completed dosing in cohort 2."
Mr. French continued, "In 2012, we have taken aggressive steps to lower our expenditures, extend our runway and reduce our need for capital. We have also issued shares of our common stock to some of our largest unsecured creditors to satisfy approximately $1.2 million in outstanding obligations, thereby decreasing our near-term need for cash. Additionally, we have lowered our current and future obligations by substantially reducing the term of the lease for our 55,000 square foot facility located in Bothell, WA so that it will expire on March 1, 2013 -- at the latest -- rather than in 2016. As a result of the impending expiration of this lease, and the sale of the equipment that we used at this facility, we are now in a position to secure a more appropriate facility to support our R&D efforts, to the extent that sufficient funding is available. To that end, we continue to seek both financing and strategic transaction opportunities to finance our operations and advance our clinical and preclinical programs. In addition, we intend to complete our filings with the SEC as required within the next six weeks. While there are still significant hurdles on our path toward success and there is no guarantee that we will survive or continue operating as an independent company, our team remains focused and dedicated to our stakeholders and to the development of unique nucleic acid-based therapeutics for the treatment of human disease."
Net loss for the full year 2011 was approximately $29.4 million compared to net loss of $27.8 million for 2010. The increase in our loss is due to a non-cash adjustment of approximately $16 million to the carrying value of our intangible assets.
Revenue for the year ended December 31, 2011 was $2.2 million compared to $2.5 million in 2010. In 2011 we recognized collaborative revenue from Roche, Debiopharm and Mirna while revenue in 2010 included payments from Par and Cypress.
Research and development ("R&D") expenses decreased 37% or $6.7 million for the full year 2011 compared to 2010. In addition to a decrease in direct project spending, patent license fees decreased significantly due to the cost of acquisitions in 2010, including: the acquisition of the SMARTICLES® liposomal-based delivery system from Novosom AG, which we acquired through the issuance of shares of our common stock valued at approximately $3.8 million; the in-license of intellectual property related to conformationally restricted nucleotides from Valeant Pharmaceuticals; and the expansion of our previous agreement with RiboTask for exclusive rights to the development of UsiRNA-based therapeutics to include the development of UNA-based diagnostics.
Selling, general and administrative ("SG&A") expenses for the full year 2011 decreased 19% from approximately $10.4 million to $8.4 million, compared to 2010, primarily as a result of transaction costs incurred relating to our 2010 acquisition of Cequent Pharmaceuticals, Inc.
Restructuring expense for 2011 was approximately $1.4 million, compared to $3.5 million in 2010. Restructuring expense in both years reflects the issuing of shares of our common stock to the landlord of the exited facility at 3450 Monte Villa Parkway in Bothell, WA. In 2011 we terminated the 3450 Monte Villa lease while in 2010 the expense resulted from an amendment to the lease of this facility.
Non-Cash Loss on Impairment of Intangible Assets
During 2011 we tested the carrying value of our intangible assets for impairment utilizing the income approach. As a result of the impairment test, for year end 2011 we recorded a non-cash loss on impairment of the intangible assets from the July 21, 2010 acquisition of Cequent Pharmaceuticals, Inc. of approximately $16.0 million.
Interest and Other Expense
We did not record any interest or other expense in 2011. For 2010 we recorded interest and other expense of approximately $2.8 million consisting primarily of non-cash charges including the fair value of price adjustable warrants issued to amend certain securities purchase agreements in the fourth quarter of 2010 and amortization of the debt discount resulting from the fair value of price adjustable warrants issued to note holders.
We also recorded net gains of approximately $6.7 million in full year 2011 and net gains of approximately $4.4 million in full year 2010 related to the re-measurement of price-adjustable warrants and subscription investment units required to be classified as liabilities. The liability is re-measured at the end of each accounting period, and increases or decreases with changes in our stock price and variables in our valuation model.
As of December 31, 2011 we had cash of approximately $2.0 million compared to $2.1 million as of December 31, 2010. As a result of our cash position, we received a "going concern" opinion from KPMG LLP, our independent registered public accounting firm, which was included in our 10-K for the 2011 fiscal year.
In 2012, we executed an agreement for a secured loan in the aggregate principal amount of $1.5 million, raised gross proceeds of $1.1 million in a public stock offering, and received upfront payments and other payments from collaborative partners totaling $2.6 million. We believe that our current resources will be sufficient to fund our planned, limited operations only until the end of October 2012 without securing additional funding.
RECENT CORPORATE ACCOMPLISHMENTS
- In February 2011, we entered into an exclusive agreement with Debiopharm S.A., a global independent biopharmaceutical development group of companies with a main focus in oncology and serious medical conditions, for the development and commercialization of the bladder cancer program.
- In December 2011, we entered into an exclusive license agreement with Mirna Therapeutics, Inc. ("Mirna"), a privately-held biotechnology company pioneering microRNA replacement therapy for cancer, regarding the development and commercialization of microRNA-based therapeutics utilizing Mirna's proprietary microRNAs and our novel SMARTICLES®-based liposomal delivery technology.
- In March 2012, we entered into an exclusive license agreement with ProNAi Therapeutics, Inc., a privately-held biotechnology company pioneering DNA interference (DNAi) therapies for cancer, regarding the development and commercialization of DNAi-based therapeutics utilizing our novel SMARTICLES®-based liposomal delivery technology.
- In May 2012, we entered into a worldwide exclusive license agreement with Monsanto Company, a global leader in agriculture and crop sciences, regarding the agricultural applications for our delivery and chemistry technologies.
- In May 2012, we entered into a strategic alliance with Girindus Group, a recognized leader in process development, analytical method development and cGMP manufacture of oligonucleotide therapeutics, regarding the development, supply and commercialization of certain oligonucleotide constructs using our conformationally restricted nucleotide ("CRN") technology.
- In August 2012, we entered into a worldwide, non-exclusive license agreement with Novartis Institutes for Biomedical Research, Inc., a global leader in the development of human therapeutics, regarding the development of oligonucleotide therapeutics utilizing our CRN technology.
About Marina Biotech, Inc.
Marina Biotech is a biotechnology company focused on the development and commercialization of oligonucleotide-based therapeutics utilizing multiple mechanisms of action including RNA interference (RNAi) and messenger RNA translational blocking. The Marina Biotech pipeline currently includes a clinical program in Familial Adenomatous Polyposis (a precancerous syndrome) and two preclinical programs -- in bladder cancer and malignant ascites. Marina Biotech has entered into an agreement with both Mirna Therapeutics and ProNAi Therapeutics to license Marina Biotech's SMARTICLES® technology for the delivery of microRNA mimics and DNAi, respectively. In addition, Marina Biotech announced exclusive licensing agreements with Monsanto Company for Marina Biotech's delivery and chemistry technologies and with Girindus America for the supply of CRN-based oligonucleotides. Marina Biotech recently entered into a non-exclusive agreement with Novartis Institutes for Biomedical Research to license Marina Biotech's CRN technology for development of nucleic acid-based therapeutics. 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 http://www.marinabio.com.
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 and substantial funding in the immediate future; (ii) the ability of Marina Biotech to attract and/or maintain research, development, commercialization and manufacturing 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 periodic reports on Form 10-K and Form 10-Q that are filed with the Securities and Exchange Commission. Marina Biotech assumes no obligation to update and supplement forward-looking statements because of subsequent events.
J. Michael French
Chief Executive Officer