SOURCE: Marina Biotech, Inc.

Marina Biotech, Inc.

May 17, 2016 08:00 ET

Marina Biotech Provides First Quarter 2016 Financial Reports and Business Update

BOTHELL, WA--(Marketwired - May 17, 2016) - Marina Biotech, Inc. (OTCQB: MRNA), a leading nucleic acid-based drug discovery and development company focused on rare diseases, today reported recent corporate highlights and financial results for the first quarter 2016.

"Since our announcement in February that we were exploring strategic alternatives, we have assessed multiple merger and acquisition opportunities as well as the sale of our nucleic acid therapeutic assets," stated J. Michael French, president and chief executive officer of Marina Biotech. "The potential acquisition of Turing's late-stage intranasal ketamine program places us in a position where we can utilize our legacy expertise and experience to quickly move the compound to commercialization. We are excited to complete the transaction with Turing and begin moving the intranasal ketamine program forward. We believe this program offers a therapeutic alternative to a potentially broad patient base suffering from neuropsychiatric and pain disorders for which there are no effective therapeutic alternatives."

Upon the close of the transaction, the Company's main business will be the rapid advancement of the intranasal ketamine program for neuropsychiatric and pain indications with a focus on potential orphan disease opportunities. Over the coming weeks, Marina intends to assess the future needs of the Company, in order to put in place the best and most experienced Board of Directors and management team to take this valuable asset forward as quickly and as efficiently as possible.

The Company will also continue to seek alternatives for its nucleic acid therapeutics assets in order to maximize shareholder value. These alternatives could include the licensing and/or sale of individual nucleic acid chemistry and delivery technologies as well as the sale of the entire drug discovery platform. The Board of Directors and management intend to evaluate and create, as appropriate, the necessary corporate and organizational structure to facilitate the sale of the nucleic acid therapeutics assets while minimizing or eliminating any expense impact on the Company and its efforts to advance the intranasal ketamine program.

KEY RECENT ACTVITIES

  • Acquisition of a Late-Stage Intranasal Ketamine Program from Turing Pharmaceuticals AG
    • In May 2016, we announced that we had executed a term sheet under which Marina intends to acquire Turing Pharmaceutical AG's intranasal ketamine program. Pending the negotiation of the definitive agreement, Marina is expected to acquire Turing's intranasal ketamine program for approximately 53 million Marina common shares. The assets to be acquired will include all patents and intellectual property rights, clinical development plans, regulatory documents and existing product inventories. Marina will pay to Turing up to $95 million in success- and sales-based milestones plus a mid-single digit royalty on net sales. Marina's purchase of Turing's Phase 3 intranasal ketamine program is expected to close by July 1, 2016, pending the completion of customary due diligence considerations, the negotiation, execution and delivery of a definitive asset purchase agreement, and the satisfaction or waiver of the closing conditions set forth in the asset purchase agreement, including the completion by Marina of a financing transaction yielding proceeds sufficient to initiate and support the Phase 3 efforts.
  • Established two transactions for the delivery of gene-editing approaches
    • In March 2016, we announced the execution of two agreements -- an Option Agreement and a Licensing Agreement -- for the delivery of gene-editing cargoes. In both cases, our partners were private and declined to disclose their names and their proprietary gene-editing approach.
  • Termination of Negotiations with Microlin Bio, Inc.
    • In March 2016, we announced that we had entered into a term sheet whereby Microlin Bio, Inc. would acquire Marina's nucleic acid therapeutics assets for 6.7 million shares of Microlin's common stock and approximately $1 million in cash. We terminated further negotiations on May 2, 2016.

FINANCIAL RESULTS

Cash
At March 31, 2016, we had cash of $0.31 million, compared to cash of $0.71 million at December 31, 2015.

Net Income
Net income for the three months ended March 31, 2016 was $1.07 million compared to $0.41 million for the three months ended March 31, 2015. This change was due primarily to changes in the fair value of the price adjustable warrants, revenue recorded during the first quarter of 2016, and a slight decrease in operating expenses during the first quarter of 2016.

Revenue
We recorded $0.25 million in revenue in the three months ended March 31, 2016, which consisted of an upfront license fee from a license agreement covering certain platforms for the delivery of an undisclosed genome editing technology. There were no revenues in the three months ended March 31, 2015.

Operating Expenses
Research and development ("R&D") expense decreased $0.06 million from $0.25 million in the three months ended March 31, 2015 to $0.19 million in the three months ended March 31, 2016, due primarily to the elimination of most consulting and clinical studies, offset by the sublicensing fee payable to Novosom for the above mentioned license of an undisclosed genome editing technology. General and administrative ("G&A") costs remained essentially unchanged at $1.06 million for the three months ended March 31, 2015 and the three months ended March 31, 2016. G&A costs consists primarily of salaries and other personnel-related expenses, stock-based compensation for G&A personnel and non-employee members of our Board, professional fees (such as accounting and legal), and corporate insurance costs.

Other Income
Other income increased from $1.73 million for the three months ended March 31, 2015 to $2.07 million in the three months ended March 31, 2016, due solely to the change in the fair value measurements for price adjustable warrants. This change in fair value is related to stock price decreases in each period decreasing the fair value of certain liabilities and derivatives.

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. In addition to these companies, we have also licensed the delivery technology to an undisclosed company developing a gene editing approach to the treatment of human diseases. 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  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Unaudited)  
   
    December 31,     March 31,  
(In thousands, except share and per share data)   2015     2016  
             
ASSETS  
Current assets:                
  Cash   $ 710     $ 307  
  Prepaid expenses and other current assets     140       126  
    Total current assets     850       433  
  Intangible assets     6,700       6,700  
  Other assets     45       45  
    Total assets   $ 7,595     $ 7,178  
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current liabilities:                
  Accounts payable   $ 763     $ 1,031  
  Accrued payroll and employee benefits     377       453  
  Other accrued liabilities     1,296       1,365  
    Total current liabilities     2,436       2,849  
Fair value liability for price adjustable warrants     2,491       423  
Fair value of stock to be issued to settle liabilities     60       75  
Deferred income tax liabilities     2,345       2,345  
    Total liabilities     7,332       5,692  
Commitments and contingencies                
Stockholders' equity:                
  Preferred stock, $0.01 par value; 100,000 shares authorized                
  Series C convertible preferred stock, $0.01 par value; 1,200 shares authorized, 1,020 shares issued and outstanding at December 31, 2015 and March 31, 2016, respectively (preference in liquidation of $5,100 at March 31, 2016)     -       -  
  Series D convertible preferred stock, $0.01 par value; 220 shares authorized, 170 and 60 shares issued and outstanding at December 31, 2015 and March 31, 2016, respectively (preference in liquidation of $300 at March 31, 2016)     -       -  
  Common stock, $0.006 par value; 180,000,000 shares authorized, 27,704,340 and 29,284,819 shares issued and outstanding at December 31, 2015 and March 31, 2016, respectively     166       176  
  Additional paid-in capital     334,548       334,694  
  Accumulated deficit     (334,451 )     (333,384 )
    Total stockholders' equity     263       1,486  
    Total liabilities and stockholders' equity   $ 7,595     $ 7,178  
                 
                 
   
   
MARINA BIOTECH, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited)  
   
    Three Months Ended March 31,  
(In thousands, except per share amounts)   2015     2016  
License and other revenue   $ -     $ 250  
Operating expenses:                
  Research and development     254       192  
  General and administrative     1,061       1,059  
Total operating expenses     1,315       1,251  
Loss from operations     (1,315 )     (1,001 )
Other income:                
  Change in fair value liability for price adjustable warrants     1,729       2,068  
Total other income     1,729       2,068  
Net income applicable to common stockholders   $ 414     $ 1,067  
                 
Net income (loss) per common share                
  Basic   $ 0.02     $ 0.04  
  Diluted     (0.04 )     (0.05 )
                 
Shares used in computing net income (loss) per share                
  Basic     25,632       28,403  
  Diluted     32,555       14,653  
                   
                   
   
   
MARINA BIOTECH, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(Unaudited)  
   
    Three months ended March 31,  
(In thousands)   2015     2016  
Operating activities:                
  Net income   $ 414     $ 1,067  
  Adjustments to reconcile net income to net cash used in operating activities:                
    Compensation related to stock options and warrants     180       96  
    Changes in fair market value of liabilities                
      Stock reserved for issuance to settle liabilities     -       75  
      Price adjustable warrants     (1,729 )     (2,068 )
    Cash changes in assets and liabilities                
      Accounts receivable     500       -  
      Prepaid expenses and other assets     8       14  
      Accounts payable     (106 )     268  
      Accrued and other liabilities     71       145  
  Net cash used in operating activities     (662 )     (403 )
Financing activities:                
  Proceeds from exercise of warrants for common stock     1       -  
    Net cash provided by financing activities     1       -  
Net decrease in cash     (661 )     (403 )
Cash and cash equivalents -- January 1     1,824       710  
Cash and cash equivalents -- March 31   $ 1,163     $ 307  
Supplemental disclosure of cash flow information and non-cash financing activities:                
  Fair value of warrants issued to purchase common stock to settle liabilities   $ 50     $ -  
  Issuance of common stock to settle liabilities   $ 75     $ 60  
  Par value of common stock issued upon conversion of Series D convertible preferred stock   $ -     $ 8  
                   
                   

Contact Information

  • For Marina inquires:
    J. Michael French
    President and CEO
    Marina Biotech, Inc.
    Email: admin@marinabio.com
    Phone: +1 (425) 892-4322