Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission file number: 001-33185

MEDICINOVA, INC.

(Exact name of registrant as specified in its charter)


Delaware		33-0927979
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

4275 Executive Square, Suite 300 La Jolla, CA		92037
(Address of Principal Executive Offices)		(Zip Code)

(858) 373-1500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Common Stock, $0.001 par value	MNOV	The Nasdaq Stock Market LLC
(Title of each class)	(Trading symbol(s))	(Name of each exchange on which registered)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “accelerated filer”, “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 5, 2024, the registrant had 49,046,246 shares of Common Stock ($0.001 par value) outstanding.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, in particular "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations," and the information incorporated by reference herein contains “forward-looking statements”. The forward-looking statements are contained principally in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but are also contained elsewhere in this report. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as "believe," "may," "will," "estimate," "continue," "anticipate," "design," "intend," "expect," "could," "plan," "potential," "predict," "seek," "should," "would" or the negative version of these words and similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those described in "Risk Factors" and elsewhere in this report. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our beliefs and assumptions only as of the date of this report. Considering the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. You should read this report completely and with the understanding that our actual future results may be materially different from what we expect.

The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

•

Inability to raise additional capital if needed;

•

Inability to generate revenues from product sales to continue business operations;

•

Inability to develop and commercialize our product candidates;

•

Failure or delay in completing clinical trials or obtaining Food and Drug Administration or foreign regulatory approval for our product candidates in a timely manner;

•

Unsuccessful clinical trials stemming from clinical trial designs, failure to enroll a sufficient number of patients, undesirable side effects and other safety concerns;

•

Inability to demonstrate sufficient efficacy of product candidates;

•

Reliance on the success of our MN-166 (ibudilast) and MN-001 (tipelukast) product candidates;

•

Delays in commencement or completion of clinical trials or suspension or termination of clinical trials;

•

Loss of our licensed rights to develop and commercialize a product candidate as a result of the termination of the underlying licensing agreement;

•

Competitors may develop products rendering our product candidates obsolete and noncompetitive;

•

Inability to successfully attract partners and enter into collaborations on acceptable terms;

•

Dependence on third parties to conduct clinical trials and to manufacture product candidates;

•

Dependence on third parties to market and distribute products;

•

Our product candidates, if approved, may not gain market acceptance or obtain adequate coverage for third party reimbursement;

•

Disputes or other developments concerning our intellectual property rights;

•

Actual and anticipated fluctuations in our quarterly or annual operating results;

•

Price and volume fluctuations in the overall stock markets;

•

Litigation or public concern about the safety of our potential products;

•

International trade or foreign exchange restrictions, increased tariffs, foreign currency exchange;

•

High quality material for our products may become difficult to obtain or expensive;

•

Strict government regulations on our business;

•

Regulations governing the production or marketing of our product candidates;

•

Loss of, or inability to attract, key personnel; and

•

Economic, political, foreign exchange and other risks associated with international operations.

•

The widespread outbreak of an illness or any other communicable disease, such as COVID-19, which has led to lead key employees becoming ill for a period of time;

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “MediciNova,” “we,” “us” and “our” refer to MediciNova, Inc.

MEDICINOVA, INC.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION		5

ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)	5
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	22
ITEM 4.	CONTROLS AND PROCEDURES	22

PART II. OTHER INFORMATION		23

ITEM 1.	LEGAL PROCEEDINGS	23
ITEM 1A.	RISK FACTORS	23
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	23
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	23
ITEM 4.	MINE SAFETY DISCLOSURES	23
ITEM 5.	OTHER INFORMATION	23
ITEM 6.	EXHIBITS	24

SIGNATURES		25

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

MEDICINOVA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30,			December 31,
	2024			2023
Assets
Current assets:
Cash and cash equivalents	$	44,337,824		$	50,999,442
Prepaid expenses and other current assets		1,167,763			174,938
Total current assets		45,505,587			51,174,380
Goodwill		9,600,240			9,600,240
In-process research and development		4,800,000			4,800,000
Property and equipment, net		35,813			45,800
Right-of-use asset		443,172			575,406
Other non-current assets		18,996			74,151
Total assets	$	60,403,808		$	66,269,977
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	667,695		$	1,003,937
Accrued liabilities and other current liabilities		1,636,637			2,059,238
Operating lease liability		190,047			215,926
Total current liabilities		2,494,379			3,279,101
Deferred tax liability		201,792			201,792
Other non-current liabilities		302,483			410,660
Total liabilities		2,998,654			3,891,553
Commitments and contingencies (Note 4)
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized at June 30, 2024 and December 31, 2023; 49,046,246 and 49,046,246 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		49,046			49,046
Additional paid-in capital		478,572,046			478,149,161
Accumulated other comprehensive loss		(131,527	)		(118,090	)
Accumulated deficit		(421,084,411	)		(415,701,693	)
Total stockholders’ equity		57,405,154			62,378,424
Total liabilities and stockholders' equity	$	60,403,808		$	66,269,977

See accompanying notes.

MEDICINOVA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)


	Three months ended						Six months ended
	June 30,						June 30,
	2024			2023			2024			2023
Operating expenses:
Research, development and patents	$	1,646,049		$	1,735,735		$	3,427,918		$	3,212,411
General and administrative		1,400,447			1,564,295			2,754,571			3,050,862
Total operating expenses		3,046,496			3,300,030			6,182,489			6,263,273
Operating loss		(3,046,496	)		(3,300,030	)		(6,182,489	)		(6,263,273	)
Interest income		435,351			451,420			832,861			960,466
Other expense		(17,055	)		(23,210	)		(33,090	)		(486,517	)
Net loss	$	(2,628,200	)	$	(2,871,820	)	$	(5,382,718	)	$	(5,789,324	)
Basic and diluted net loss per common share	$	(0.05	)	$	(0.06	)	$	(0.11	)	$	(0.12	)
Shares used to compute basic and diluted net loss per common share		49,046,246			49,046,246			49,046,246			49,046,246
Net loss	$	(2,628,200	)	$	(2,871,820	)		(5,382,718	)		(5,789,324	)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments		(4,545	)		(4,213	)		(13,437	)		(5,755	)
Comprehensive loss	$	(2,632,745	)	$	(2,876,033	)	$	(5,396,155	)	$	(5,795,079	)

See accompanying notes.

MEDICINOVA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	Six Months Ended June 30, 2024
	Common stock				Additional paid-in		Accumulated other comprehensive			Accumulated			Total stockholders’
	Shares		Amount		capital		loss			deficit			equity
Balance at December 31, 2023		49,046,246	$	49,046	$	478,149,161	$	(118,090	)	$	(415,701,693	)	$	62,378,424
Share-based compensation	—		—			215,430	—			—				215,430
Net loss	—		—		—		—				(2,754,518	)		(2,754,518	)
Foreign currency translation adjustments	—		—		—			(8,892	)	—				(8,892	)
Balance at March 31, 2024		49,046,246		49,046		478,364,591		(126,982	)		(418,456,211	)		59,830,444
Share-based compensation		—		—		207,455		—			—			207,455
Net loss		—		—		—		—			(2,628,200	)		(2,628,200	)
Foreign currency translation adjustments		—		—		—		(4,545	)		—			(4,545	)
Balance at June 30, 2024		49,046,246	$	49,046	$	478,572,046	$	(131,527	)	$	(421,084,411	)	$	57,405,154


	Six Months Ended June 30, 2023
	Common stock				Additional paid-in		Accumulated other comprehensive			Accumulated			Total stockholders’
	Shares		Amount		capital		loss			deficit			equity
Balance at December 31, 2022		49,046,246	$	49,046	$	477,438,451	$	(115,285	)	$	(407,130,177	)	$	70,242,035
Share-based compensation	—		—			403,263	—			—				403,263
Net loss	—		—		—		—				(2,917,504	)		(2,917,504	)
Foreign currency translation adjustments	—		—		—			(1,542	)	—				(1,542	)
Balance at March 31, 2023		49,046,246		49,046		477,841,714		(116,827	)		(410,047,681	)		67,726,252
Share-based compensation		—		—		325,710		—			—			325,710
Net loss		—		—		—		—			(2,871,820	)		(2,871,820	)
Foreign currency translation adjustments		—		—		—		(4,213	)		—			(4,213	)
Balance at June 30, 2023	$	49,046,246	$	49,046	$	478,167,424	$	(121,040	)	$	(412,919,501	)	$	65,175,929

See accompanying notes.

MEDICINOVA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six months ended
	June 30,
	2024			2023
Operating activities:
Net loss	$	(5,382,718	)	$	(5,789,324	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash stock-based compensation		422,885			728,973
Depreciation and amortization		10,720			9,100
Loss on disposal of investments		—			102,513
Loss on disposal of fixed assets		—			—
Change in carrying amount of right-of-use asset		85,595			98,643
Changes in assets and liabilities:
Prepaid expenses and other assets		(947,502	)		(182,896	)
Accounts payable, accrued liabilities and other liabilities		(780,838	)		(428,876	)
Operating lease liabilities		(87,320	)		(98,562	)
Net cash used in operating activities		(6,679,178	)		(5,560,429	)
Investing activities:
Proceeds from disposal of investments		—			39,929,015
Acquisitions of property and equipment		(891	)		(18,577	)
Net cash (used in)/provided by investing activities		(891	)		39,910,438
Effect of exchange rate changes on cash and cash equivalents		18,451			20,769
Net change in cash and cash equivalents		(6,661,618	)		34,370,778
Cash and cash equivalents, beginning of period		50,999,442			18,505,493
Cash and cash equivalents, end of period	$	44,337,824		$	52,876,271
Supplemental disclosure of non-cash investing activities:
Right-of-use asset obtained in exchange for operating lease liability		42,281			139,001

Change in carrying amount of right-of-use asset due to termination of lease	$	79,229		$	—

See accompanying notes.

MEDICINOVA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Interim Financial Information

Organization and Business

MediciNova, Inc. (the Company or MediciNova) was incorporated in the state of Delaware in September 2000. The Company’s common stock is listed in both the United States and Japan and trades on the Nasdaq Global Market and the Standard Market of the Tokyo Stock Exchange. The Company is a biopharmaceutical company focused on developing novel therapeutics for the treatment of serious diseases with unmet medical needs with a commercial focus on the United States market. The Company’s current strategy is to focus its development activities on MN-166 (ibudilast) for neurological and other disorders such as progressive multiple sclerosis (MS), amyotrophic lateral sclerosis (ALS), chemotherapy-induced peripheral neuropathy, degenerative cervical myelopathy, glioblastoma, substance dependence and addiction (e.g., methamphetamine dependence, opioid dependence, and alcohol dependence), prevention of acute respiratory distress syndrome (ARDS), and Long COVID, and MN-001 (tipelukast) for fibrotic and other diseases such as nonalcoholic fatty liver disease (NAFLD) and idiopathic pulmonary fibrosis (IPF). The Company’s pipeline also includes MN-221 (bedoradrine) for the treatment of acute exacerbation of asthma and MN-029 (denibulin) for solid tumor cancers.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions of the Securities and Exchange Commission (SEC) on Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. In the opinion of management, the condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC. The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The balance sheet at December 31, 2023 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of MediciNova, Inc. and its wholly owned subsidiaries, MediciNova Japan, Inc., MediciNova (Europe) Limited, MediciNova Europe GmbH, MediciNova Canada, Inc. and Avigen Inc. The financial statements of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Intercompany transaction gains or losses at each period end are included as translation adjustments and recorded within other comprehensive income or loss. All intercompany transactions and balances are eliminated in consolidation.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company operates in a single operating segment – the acquisition and development of small molecule therapeutics for the treatment of serious diseases with unmet medical needs.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and other highly liquid investments including money market and mutual fund accounts, with original maturities of three months or less from the date of purchase.

Investments

Investments purchased with an original maturity of greater than three months are classified as investments. Investments are stated at fair value and are classified as current or non-current based on the nature of the securities as well as their stated maturities.

Research, Development and Patents

Research and development costs are expensed in the period incurred. Research and development costs primarily consist of salaries and related expenses for personnel, facilities and depreciation, research and development supplies, licenses and outside services. Such research and development costs totaled $1.5 million and $1.6 million for the three months ended June 30, 2024 and 2023, respectively, and $3.2 million and $3.0 million for the six months ended June 30, 2024 and 2023, respectively.

Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. The Company includes all external costs related to the filing of patents in Research, Development and Patents expenses. Such patent-related expenses totaled $0.1 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, and $0.2 million and $0.2 million for the six months ended June 30, 2024 and 2023, respectively.

For transactions with a government where the Company receives government assistance in performing research and development activities and the accounting for a transaction is not specified within the scope of authoritative GAAP, the Company follows Accounting Standards Codification (ASC) 832, Government Assistance (Topic 832), applying a grant or contribution model by analogy to Subtopic 958-605, Not-for-Profit Entities-Revenue Recognition.

Clinical Trial Accruals and Prepaid Expenses

Costs for preclinical studies, clinical studies and manufacturing activities are recognized as research and development expenses based on an evaluation of the progress by Company vendors towards completion of specific tasks, using data such as patient enrollment, clinical site activations or information provided to the Company by such vendors regarding their actual costs incurred. Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services are performed. The Company determines accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion of studies, or the services completed. The Company’s estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time. Costs that are paid in advance of performance are deferred as a prepaid expense and amortized over the service period as the services are provided.

Leases

The Company determines if an arrangement is a lease at inception and if so, determines whether the lease qualifies as an operating or finance lease. The Company does not recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less and does not separate non-lease components from lease components. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expenses. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate that the Company would expect to pay to borrow on a collateralized and fully amortizing basis over a similar term an amount equal to the lease payments in a similar economic environment.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (ASU 2020-06). ASU 2020-06 simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded features that could be recognized separately from the host contract. Consequently, more convertible debt instruments will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 also requires use of the if-converted method in the diluted earnings per share calculation for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years for smaller reporting companies, with early adoption permitted. The new standard was effective for the Company on January 1, 2024. There was no impact on the consolidated financial statements upon adoption of this standard on January 1, 2024.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). ASU 2023-07 improves the disclosures about a public entity’s reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment’s expenses. Specifically, it requires that a public entity: 1) disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, 2) disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss, 3) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods, and 4) disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU also requires a public entity that has a single reportable segment to provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. Further, the ASU clarifies that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures. However, at least one of the reported segment profit or loss measures should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s consolidated financial statements. The amendments are effective for all public entities that are required to report segment information for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented. The Company is currently evaluating the potential impact that this standard will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures. Specifically, it requires that a public business entity: 1) disclose, on an annual basis, an income tax rate reconciliation in a tabular form, disclosing specific categories and providing additional information for reconciling items that meet a quantitative threshold, 2) disclose on an annual basis the following information about income taxes paid: i) the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, ii) the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received), 3) all entities are required to disclose: i) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and ii) income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this ASU should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the potential impact that this standard will have on its consolidated financial statements and related disclosures.

2. Revenue Recognition

Revenue Recognition Policy

Revenues historically have consisted mainly of research and development services performed under a contract with a customer. The Company evaluates the separate performance obligation(s) under each contract, allocates the transaction price to each performance obligation considering the estimated stand-alone selling prices of the services and recognizes revenue upon the satisfaction of such obligations at a point in time or over time dependent on the satisfaction of one of the following criteria: 1) the customer simultaneously receives and consumes the economic benefits provided by the vendor’s performance; 2) the vendor creates or

enhances an asset controlled by the customer; 3) the vendor’s performance does not create an asset for which the vendor has an alternative use; and 4) the vendor has an enforceable right to payment for performance completed to date.

3. Fair Value Measurements

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:


Level 1:	Observable inputs such as quoted prices in active markets;

Level 2:	Inputs are quoted prices for similar items in active markets or quoted prices for identical or similar items in markets that are not active near the measurement date; and

Level 3:	Unobservable inputs due to little or no market data, which require the reporting entity to develop its own assumptions.

The carrying amount and approximate fair value of financial instruments as of June 30, 2024 and December 31, 2023, were as follows:


	June 30, 2024				December 31, 2023
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Valuation Inputs
Cash and cash equivalents:
Mutual funds	$	20,980,327	$	20,980,327	$	782,382	$	782,382	Level 1

4. Commitments and Contingencies

Lease Commitments

The Company has operating leases primarily for real estate in the United States and Japan. The United States lease is for the Company’s headquarters in San Diego and has a term of five years ending January 31, 2027, with annual escalations. In April 2024, the Company provided notice to terminate its previous lease agreement for its Tokyo office, effective October 2024, and in May 2024, the Company entered into a new lease agreement, effective June 2024, for a different office space for its Tokyo location. The new lease has an initial lease term of 12 months ending May 2025 with an option to extend for an additional two months, after which there will be automatic two-month renewals until the lease is terminated. In measuring the lease liability, the Company determined that it was reasonably certain that it would exercise one renewal option. Accordingly, the Company used a lease term of 14 months in measuring the lease liability. The Company measured the lease liability based on the present value of the future lease payments, including the one extension option that is reasonably certain to exercise, discounted using the estimated incremental borrowing rate of 6.95%, which is the interest rate that the Company would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments at initial commencement. The real estate operating leases are included in "Right-of-use asset” on the Company's balance sheets and represents the Company’s right to use the underlying assets for the lease term. The Company’s obligation to make lease payments are included in "Operating lease liability" and "Other non-current liabilities" on the Company's balance sheets.

Information related to the Company’s right-of-use assets and related lease liabilities are as follows:


	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Cash paid for operating lease liabilities	$	64,239	$	64,024	$	128,833	$	127,391
Operating lease costs		62,122		64,011		125,301		128,022


	June 30,			December 31,
	2024			2023
Current operating lease liabilities	$	190,047		$	215,926
Non-current operating lease liabilities		302,483			410,660
Total operating lease liabilities	$	492,530		$	626,586

Weighted-average remaining lease term (in years)		2.47			2.81
Weighted-average discount rate		9.6	%		9.3	%


Maturities of operating lease liabilities as of June 30, 2024 were as follows:
2024 (remaining six months)	$	109,879
2025		223,396
2026		206,483
2027		17,269
2028		—
Thereafter		—
Total minimum payments		557,027
Less imputed interest		(64,497	)
Total lease liabilities	$	492,530

Product Liability

The Company’s business exposes it to liability risks from its potential drug products. A successful product liability claim or series of claims brought against the Company could result in the payment of significant amounts of money and divert management’s attention from running the business. The Company may not be able to maintain insurance on acceptable terms, or the insurance may not provide adequate protection in the case of a product liability claim. To the extent that product liability insurance, if available, does not cover potential claims, the Company would be required to self-insure the risks associated with such claims. The Company believes it carries reasonably adequate insurance for product liability.

License and Research Agreements

The Company has entered into in-licensing agreements with various pharmaceutical companies. Under the terms of these agreements, the Company has received licenses to research, know-how and technology claimed in specified patents or patent applications. Under these license agreements, the Company is generally required to make upfront payments and additional payments upon the achievement of milestones and/or royalties on future sales of products until the later of the expiration of the applicable patent or the applicable last date of market exclusivity after the first commercial sale, on a country-by-country basis.

No milestone payments have been made under these agreements during the six months ended June 30, 2024 and 2023. For products currently in development, future potential milestone payments based on product development of MN-166 (ibudilast) and MN-001 (tipelukast) are $10 million as of June 30, 2024. For all other products, future potential milestone payments related to development milestones and commercialization milestones totaled $16.5 million as of June 30, 2024. There are no minimum royalties required under any of the license agreements. The Company is unable to estimate with certainty the timing on when these milestone payments will occur as these payments are dependent upon the progress of the Company’s product development programs.

Legal Proceedings

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. The Company is not aware of any such proceedings or claims that it believes will have, individually or in aggregate, a material adverse effect on its business, financial condition or results of operations.

5. Stock-based Compensation

Stock Incentive Plans

In June 2013, the Company adopted the 2013 Equity Incentive Plan (2013 Plan) under which the Company granted equity-based awards, including stock options, stock appreciation rights, restricted stock, and restricted stock units to individuals who were then employees, officers, non-employee directors or consultants of the Company or its subsidiaries. A total of 8,700,000 shares of common stock were reserved for issuance under the 2013 Plan. In addition, “returning shares” that may become available from time to time were added back to the 2013 Plan. “Returning shares” included shares that were subject to outstanding awards granted under the Company's prior 2004 Equity Incentive Plan that expired or terminated prior to exercise or settlement, were forfeited because of the failure to vest, were repurchased, or were withheld to satisfy tax withholding or purchase price obligations in connection with such awards. Although the Company no longer grants equity awards under the 2013 Plan, all outstanding stock awards granted under the 2013 Plan will continue to be subject to the terms and conditions as set forth in the agreements evidencing such stock awards and the terms of the 2013 Plan.

In June 2023, the Company adopted the 2023 Equity Incentive Plan (2023 Plan) under which the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries. The 2023 Plan is the successor to the 2013 Plan. The number of shares of common stock that may be issued under the 2023 Plan is equal to the sum of (a) shares subject to awards granted under the 2013 Plan that were outstanding upon expiration of the 2013 Plan and are subsequently forfeited, expire or lapse unexercised or unsettled and shares issued pursuant to awards granted under the 2013 Plan that were outstanding upon expiration of the 2013 Plan and are subsequently forfeited to or reacquired by the Company and (b) shares reserved under the 2013 Plan that were not issued or subject to outstanding awards under the 2013 Plan upon expiration of the 2013 Plan. While a maximum of 9,934,567 shares may become available for issuance under the 2023 Plan from the 2013 Plan, since this figure assumes that all awards outstanding under the 2013 Plan upon expiration of the 2013 Plan will be forfeited, the Company expects the actual number of shares added to the 2023 Plan to be less. In general, to the extent that awards under the 2023 Plan are forfeited, cancelled or expire for any reason before being exercised or settled in full, the shares subject to such awards will again become available for issuance under the 2023 Plan. If stock appreciation rights are exercised or restricted stock units are settled, then only the number of shares (if any) actually issued to the participant will reduce the number of shares available under the 2023 Plan. If restricted shares or shares issued upon exercise of options are reacquired by the Company pursuant to a forfeiture provision, repurchase right or for any other reason, then such shares shall again become available for issuance under the 2023 Plan. Shares withheld to pay the exercise price of options or satisfy tax withholding obligations related to an award shall again become available for issuance under the 2023 Plan. Further, to the extent an award is settled in cash rather than shares, the cash settlement shall not reduce the number of shares available for issuance under the 2023 Plan.

As of June 30, 2024, 1,502,923 shares remain available for future grants under the 2023 Plan.

Certain of the employee stock options granted contain performance conditions, the vesting of which is based on a determination made by the compensation committee followed by an approval of the board of directors as to the achievement of certain corporate objectives at the end of the performance period. The grant date of such awards is the date on which the board of directors makes its determination. For periods preceding the grant date, the expense related to these awards is measured based on their fair value at each reporting date. The estimated fair value of the performance awards granted and the resulting expense is based upon a certain level of achievement of the corporate objectives and other assumptions in determining fair value. The amount of expense ultimately recognized upon the grant date at completion of the performance period could change from the estimate as a result of various factors, including the level of achievement of the corporate objectives, changes in the assumptions used in the Black-Scholes model in determining fair value or fluctuations in the Company’s stock price during the performance period. As of June 30, 2024, there were a total of 1,100,000 shares underlying performance options that were subject to vesting based on achievement of corporate objectives for 2024.

Stock Options

Options granted under the 2023 Plan and the 2013 Plan have terms of ten years from the date of grant unless earlier terminated and generally vest over a one or four year period. The exercise price of all options granted through June 30, 2024 and 2023, was equal to the fair market value of the Company’s common stock on the date of grant.

A summary of stock option activity and related information as of June 30, 2024 is as follows:


	Number of Option Shares			Weighted Average Exercise Price
Outstanding at December 31, 2023		7,781,749		$	5.52
Granted		1,100,000			1.51
Exercised		—			—
Cancelled		(450,105	)		2.15
Outstanding at June 30, 2024		8,431,644		$	5.13
Exercisable at June 30, 2024		7,536,644		$	5.61

Compensation Expense

Stock-based compensation expense for stock option awards are reflected in total operating expenses for each respective period.

The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2024 and 2023, respectively:


	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Research, development and patents	$	78,549	$	120,037	$	160,218	$	261,155
General and administrative		128,906		205,673		262,667		467,818
Total stock-based compensation expense	$	207,455	$	325,710	$	422,885	$	728,973

The Company uses the Black-Scholes valuation model for determining the estimated fair value for stock-based awards granted to employees and considers management’s current expectations of the achievement of the performance objectives for the year. The following table provides the assumptions used in the Black-Scholes valuation model used to estimate the fair value of options granted during the six months ended June 30, 2024 and 2023, and to estimate the fair value of performance-based stock options as of June 30, 2024 and 2023.


	Six months ended June 30,
	2024	2023
Stock Options
Risk-free interest rate	4.21 - 4.41%	3.59 - 4.13%
Expected volatility of common stock	72.60 - 74.05%	75.81 - 77.96%
Dividend yield	0.00%	0.00%
Expected term (in years)	5.30 - 5.77	5.13 - 5.38

As of June 30, 2024, there was $0.4 million of unamortized compensation cost related to unvested stock option awards which is expected to be recognized over a remaining weighted-average vesting period of 0.63 years, on a straight-line basis. Such compensation cost will ultimately be adjusted based upon actual performance compared to the corporate objectives as described above.

The weighted-average fair value of each stock option granted during the six months ended June 30, 2024 and 2023, estimated as of the grant date using the Black-Scholes option valuation model, was $0.99 and $1.60 per option, respectively.

6. Stockholders’ Equity

At-The-Market Issuance Sales Agreements and Private Placement Transactions

On August 23, 2019, the Company entered into an at the market issuance sales agreement, which was amended on August 26, 2022 (as amended, the ATM Agreement) with B. Riley FBR, Inc. (B. Riley FBR) pursuant to which the Company may sell common stock through B. Riley FBR from time to time up to an aggregate offering price of $75.0 million. Sales of the Company’s common stock through B. Riley FBR, if any, will be made by any method that is deemed to be an “at-the-market” equity offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including sales made directly on Nasdaq, on any other existing trading market for the common stock or through a market maker. B. Riley FBR may also sell the common stock in privately negotiated transactions, subject to the Company’s prior approval. The Company agreed to pay B. Riley FBR an aggregate commission rate of up to 3.5% of the gross proceeds of any common stock sold under this agreement. Proceeds from sales of common stock will depend on the number of shares of common stock sold to B. Riley FBR and the per share purchase price of each transaction.

No shares of common stock were sold under the ATM Agreement in the six months ended June 30, 2024 and 2023, respectively.

7. Net Loss Per Share

The Company computes basic net loss per share using the weighted average number of common shares outstanding during the period. Diluted net loss per share is based upon the weighted average number of common shares and potentially dilutive securities (common share equivalents) outstanding during the period. Common share equivalents outstanding, determined using the treasury stock method, are comprised of shares that may be issued under the Company’s stock option agreements. Common share equivalents are excluded from the diluted net loss per share calculation if their effect is anti-dilutive.

Potentially dilutive outstanding stock options excluded from diluted net loss per common share due to their anti-dilutive effect totaled 8,431,644 shares for the three and six months ended June 30, 2024 and 8,286,416 shares for the three and six months ended June 30, 2023.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended December 31, 2023 included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (SEC) on February 15, 2024 (Annual Report on Form 10-K). Past operating results are not necessarily indicative of results that may occur in future periods.

This Quarterly Report on Form 10-Q contains forward-looking statements that are subject to risks and uncertainties, many of which are beyond our control. Our actual results may differ from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II of this Quarterly Report on Form 10-Q under the caption “Item 1A. Risk Factors” and under the caption “Item 1A. Risk Factors” in our Annual Report on Form 10-K. The differences may be material. Forward-looking statements discuss matters that are not historical facts. Forward-looking statements include, but are not limited to, statements regarding our plans, strategies, objectives, product development programs, clinical trials, industry, financial condition, liquidity and capital resources, future performance and other statements that are not historical facts. Such forward-looking statements include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. For such statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You should not rely unduly on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.

Overview

We are a biopharmaceutical company focused on developing novel therapeutics for the treatment of serious diseases with unmet medical needs and a commercial focus on the United States market. Our current strategy is to focus our development activities on MN-166 (ibudilast) for neurological and other disorders such as progressive multiple sclerosis (MS), amyotrophic lateral sclerosis (ALS), chemotherapy-induced peripheral neuropathy, degenerative cervical myelopathy, glioblastoma, substance dependence and addiction (e.g., methamphetamine dependence, opioid dependence, and alcohol dependence), prevention of acute respiratory distress syndrome (ARDS), and Long COVID, and MN-001 (tipelukast) for fibrotic and other diseases such as nonalcoholic fatty liver disease (NAFLD) and idiopathic pulmonary fibrosis (IPF). Our pipeline also includes MN-221 (bedoradrine) for the treatment of acute exacerbation of asthma and MN-029 (denibulin) for solid tumor cancers. We were incorporated in Delaware in September 2000.

We have incurred significant net losses since our inception. As of June 30, 2024, from inception, our accumulated deficit was $421.1 million. We expect to incur substantial net losses for the next several years as we continue to develop certain of our existing product development programs, and over the long-term if we expand our research and development programs and acquire or in-license products, technologies or businesses that are complementary to our own.

Our goal is to build a sustainable biopharmaceutical business through the successful development of differentiated products for the treatment of serious diseases with unmet medical needs in high-value therapeutic areas. Key elements of our strategy are as follows:

•

Pursue the development of MN-166 (ibudilast) for multiple potential indications with the support of non-dilutive financings.

We intend to advance our diverse MN-166 (ibudilast) program through a combination of investigator-sponsored clinical trials, trials funded through government grants or other grants, and trials funded by us. We intend to pursue additional strategic alliances to help support further clinical development of MN-166 (ibudilast).

•

Pursue the development of MN-001 (tipelukast) for fibrotic and other diseases.

We intend to advance development of MN-001 (tipelukast) through a variety of means, which may include investigator-sponsored trials with or without grant funding as well as trials funded by us.

•

Consider strategic partnerships with one or more leading pharmaceutical companies to complete product development and successfully commercialize our products.

We develop and maintain relationships with pharmaceutical companies that are therapeutic category leaders. We intend to discuss strategic alliances with leading pharmaceutical companies who seek product candidates, such as MN-166 (ibudilast), MN-001 (tipelukast), MN-221 (bedoradrine), and MN-029 (denibulin), which could support our clinical development and product commercialization.

Impact of COVID-19 and the Macroeconomic Environment on Our Business

The recent COVID-19 pandemic resulted in significant national and global economic disruption and has, and may continue to adversely affect our business. To date, we have experienced certain adverse effects on our business as well as been provided certain opportunities as a result of the pandemic. The pandemic caused a decrease in the number of patient visits at some clinical trial sites which we believe resulted in slower enrollment in our clinical trials than would have occurred without the pandemic. However, we have seen an increase in the number of patient visits compared to earlier in the pandemic and we continue to enroll patients in clinical trials. Throughout the pandemic, we continued with routine clinical trial activities including executing new clinical trial agreements, negotiating budgets, institutional review board approvals, site training, and other activities related to the initiation of new clinical trials and the opening of new clinical trial sites, although some of these activities took longer to complete than what we experienced prior to the pandemic.

The pandemic created certain opportunities for our clinical development and we have pursued those opportunities. Following the outbreak of the pandemic, we designed a clinical trial to evaluate MN-166 (ibudilast) for prevention of ARDS caused by COVID-19. In June 2022, we announced positive top-line results from this Phase 2 clinical trial in which MN-166 (ibudilast) demonstrated large improvements compared to placebo for all four clinical endpoints analyzed. Separately, in August 2022, we announced plans to participate in Recovering from COVID-19 Lingering Symptoms Adaptive Integrative Medicine Trial (the RECLAIM trial), a grant-funded clinical trial to evaluate MN-166 (ibudilast) and other therapies for the treatment of Long COVID, the lingering symptoms of COVID-19. In February 2023, we announced that Health Canada completed its review of the clinical trial application and granted authorization to commence the RECLAIM trial.

We continue to actively monitor the possible effects on our financial condition, liquidity, operations, suppliers, industry, and workforce resulting from the recent pandemic and the macroeconomic environment. To the extent that there is a resurgence in the COVID-19 pandemic, or other health epidemics or outbreaks, our operations could be disrupted and our business adversely impacted.

Further, certain global COVID-19 pandemic and government responses to the pandemic resulted in, and may continue to result in, downward pressure, extreme volatility, and disruptions in the capital and credit markets, reducing our ability to raise additional capital through equity, equity-linked or debt financings, which could negatively impact our short-term and long-term liquidity, access to capital markets, and our ability to operate in accordance with our operating plan, or at all.

In addition, we may be exposed to credit risk on deposits at financial institutions to the extent our account balances exceed the amount insured by the Federal Deposit Insurance Corporation. We are monitoring ongoing events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions.

Research, Development and Patents Expenses

Our research, development and patents expenses consist primarily of license fees related to our product candidates, salaries and related employee benefits, costs associated with the preclinical and clinical development of our product development programs, costs associated with non-clinical activities, such as regulatory expenses, and pre-commercialization manufacturing development activities. We use external service providers to manufacture our compounds to be used in clinical trials and for the majority of the services performed in connection with the preclinical and clinical development of our product candidates. Research, development and patents expenses include fees paid to consultants, contract research organizations, contract manufacturers and other external service providers, including professional fees and costs associated with legal services, patents and patent applications for our intellectual property. Internal research and development expenses include costs of compensation and other expenses for research and development personnel, supplies, facility costs and depreciation. Research, development and patents costs are expensed as incurred and we expect to increase such costs through the remainder of 2024 as our development programs progress.

The following table summarizes our research, development and patents expenses for the periods indicated for each of our product development programs. To the extent that costs, including personnel costs, are not tracked to a specific product development program, such costs are included in the “Other R&D expense” category (in thousands):


	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
External development expense:
MN-221	$	2	$	2	$	5	$	12
MN-166		947		872		2,011		1,694
MN-001		128		221		222		284
MN-029		1		1		2		2
Total external development expense		1,078		1,096		2,240		1,992
R&D personnel expense		416		451		847		926
R&D facility and depreciation expense		16		16		32		26
Patent expenses		107		97		247		170
Other R&D expense		29		75		62		98
Total research, development and patent expense	$	1,646	$	1,735	$	3,428	$	3,212

General and Administrative Expenses

Our general and administrative costs primarily consist of salaries, stock-based compensation, benefits and consulting and professional fees related to our administrative, finance, human resources, business development, legal, information systems support functions, facilities and insurance costs. General and administrative costs are expensed as incurred.

Our general and administrative expenses may increase in future periods if we are required to expand our infrastructure based on the success of our product development programs and in raising capital to support our product development programs or otherwise in connection with increased business development activities related to partnering, out-licensing or product disposition.

Critical Accounting Estimates

This discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which we have prepared in accordance with United States generally accepted accounting principles. The preparation of these condensed consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting periods. We base our estimates on historical experience and on various other factors and assumptions that we believe are reasonable under the circumstances at the time the estimates are made, the results of which form the basis for making judgments about the book values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We periodically evaluate our estimates and judgments in light of changes in circumstances, facts and experience.

Our critical accounting policies are those accounting principles generally accepted in the United States that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. For a description of our critical accounting estimates, please see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” contained in our Annual Report on Form 10-K, for the year ended December 31, 2023. There have not been any material changes to the critical accounting policies discussed therein during the six months ended June 30, 2024.

IPR&D and Goodwill

Amounts incurred related to in-process research and development (IPR&D) or asset purchases of IPR&D are expensed as incurred. Amounts allocated to IPR&D in connection with a business combination are recorded at fair value and are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested annually for impairment or more frequently if indicators of impairment exist. Goodwill is reviewed for impairment annually (as of December 31st) or more frequently if indicators of impairment exist.

As of December 31, 2023, the Company performed a qualitative impairment assessment of goodwill and indefinite-lived intangible assets which included an evaluation of changes in industry, market, and macroeconomic conditions as well as consideration of its financial performance and any significant trends. The qualitative assessment indicated that it was not more likely than not that goodwill and indefinite-lived intangible assets are impaired as of December 31, 2023. If the Company experiences a sustained decline in its stock price or other material changes in the significant assumptions that affect the determination of the fair value of the Company’s single reporting unit, it may result in a goodwill and/or intangible asset impairment charge in future periods, and such charge may be material.

Results of Operations

Comparison of the three months ended June 30, 2024 and 2023

Research, Development and Patents Expenses

Research, development and patents expenses were $1.6 million and $1.7 million for the three months ended June 30, 2024 and 2023, respectively. The decrease of $0.1 million was primarily driven by a decrease in performance-based stock option expense and product liability insurance.

General and Administrative Expenses

General and administrative expenses were $1.4 million and $1.6 million for the three months ended June 30, 2024 and 2023, respectively. The decrease of $0.2 million was primarily driven by decreases in performance-based stock option expense and payroll costs from a reduction in headcount, partially offset by an increase in accounting expenses.

Interest Income

Interest income was $0.4 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively. The decrease of $0.1 million was primarily driven by lower interest rates on available cash in 2024 compared to cash and bank certificates of deposit in 2023. Interest income consists of interest earned on our cash and cash equivalents and investments.

Comparison of the six months ended June 30, 2024 and 2023

Research, Development and Patents Expenses

Research, development and patents expenses were $3.4 million and $3.2 million for the six months ended June 30, 2024 and 2023, respectively. The increase of $0.2 million was primarily due to an increase in MN-166 manufacturing costs, partially offset by a decrease in performance-based stock option expense.

General and Administrative Expenses

General and administrative expenses were $2.8 million and $3.1 million for the six months ended June 30, 2024 and 2023, respectively. The decrease of $0.3 million was primarily driven by a decrease in performance-based stock option expense partially offset by an increase in accounting expenses.

Interest Income

Interest income was $0.8 million and $1.0 million for the six months ended June 30, 2024 and 2023, respectively. The decrease of $0.2 million was primarily driven by lower interest rates on available cash in 2024 compared to cash and bank certificates of deposit in 2023. Interest income consists of interest earned on our cash and cash equivalents and investments.

Liquidity and Capital Resources

Net cash used in operating activities during the six months ended June 30, 2024 was $6.7 million compared to $5.6 million during the same period in 2023. The $1.1 million change is primarily related to the increase in prepaid expenses, other assets, accounts payable and accrued liabilities for those periods.

Net cash provided by investing activities during the six months ended June 30, 2024 was $0.0 million compared to $39.9 million provided by during the same period in 2023 related to the disposal of certificates of deposit of $39.9 million during the six months ended June 30, 2023.

As of June 30, 2024, we had available cash and cash equivalents of $44.3 million and working capital of $43.0 million. As of the date of this report, we believe we have working capital sufficient to fund operations at least through the end of 2025. However, we cannot provide assurance that these capital resources will be sufficient to conduct all our research and development programs as planned.

Equity Financing

In August 2019, we entered into an at the market issuance sales agreement, which was amended on August 26, 2022 (as amended, the ATM Agreement) with B. Riley FBR, Inc. (B. Riley FBR) pursuant to which we may sell common stock through B. Riley FBR from time to time up to an aggregate offering price of $75.0 million. Sales of our common stock through B. Riley FBR, if any, will be made by any method that is deemed to be an “at-the-market” equity offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including sales made directly on Nasdaq, on any other existing trading market for the common stock or through a market maker. B. Riley FBR may also sell the common stock in privately negotiated transactions, subject to our prior approval. We agreed to pay B. Riley FBR an aggregate commission rate of up to 3.5% of the gross proceeds of any common stock sold under this agreement. Proceeds from sales of common stock will depend on the number of shares of common stock sold to B. Riley FBR and the per share purchase price of each transaction.

No shares of common stock were sold under the ATM Agreement in the three and six months ended June 30, 2024 and 2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that the information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended (the Exchange Act), is (1) recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms, and (2) accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our procedures or our internal controls will prevent or detect all errors and all fraud. Any internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of our controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not involved in any material legal proceedings as of June 30, 2024. We may become involved in various disputes and legal proceedings which arise in the ordinary course of business or otherwise. While it is not possible to accurately predict or determine the outcome of these matters, an adverse result in any litigation matter may occur which could harm our business.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K, for the year ended December 31, 2023, which are incorporated herein by reference and which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. We do not believe that there have been any material changes from the risk factors previously disclosed in our Annual Report on Form 10-K, for the year ended December 31, 2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable

Securities Trading Plans of Directors and Executive Officers

During the quarter ended June 30, 2024, none of our officers or directors, as defined in Rule 16a-1(f), informed us of the adoption or termination of a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, each as defined in Regulation S-K Item 408.

ITEM 6. EXHIBITS.


Exhibit Number		Description

3.1		Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2012 (File No. 001-33185)).

3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on April 25, 2019 (File No. 001-33185)).

10.1(1)+		Consulting Agreement, dated April 2, 2024, by and between the Registrant and Geoffrey O'Brien

31.1(1)		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2(1)		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1(1)*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

32.2(1)*		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

101.INS(1)		Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

101.SCH(1)		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.

104(1)		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

(1)

Filed Herewith

+ Indicates management contract or compensatory plan

The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of MediciNova, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	MEDICINOVA, INC.

Date: August 8, 2024	By:	/s/ YUICHI IWAKI
		Yuichi Iwaki, M.D., Ph.D.
		President and Chief Executive Officer
		(on behalf of the registrant and
		as the registrant’s Principal Executive Officer)

	By:	/s/ JASON KRUGER
		Jason Kruger
		Chief Financial Officer
		(on behalf of the registrant and
		as the registrant’s Principal Financial Officer)

CONSULTING AGREEMENT

Effective April 2, 2024 (the “Effective Date”), Geoffrey O’Brien (“Consultant”) and MEDICINOVA, INC. (“Company”) agree as follows:

Services; Payment; No Violation of Rights or Obligations. Consultant agrees to undertake and complete the Services (as defined in Exhibit A) in accordance with and on the schedule specified in Exhibit A. As the only consideration due to Consultant regarding the subject matter of this Agreement, Company will pay Consultant as (and only as) expressly stated in Exhibit A. Unless otherwise specifically agreed upon by Company in writing (and notwithstanding any other provision of this Agreement), all activity relating to Services will be performed by and only by Consultant. Consultant agrees that it will not (and will not permit others to) violate any agreement with or rights of any third party or, except as expressly authorized by Company in writing hereafter, use or disclose at any time Consultant’s own or any third party’s confidential information or intellectual property in connection with the Services or otherwise for or on behalf of Company.

Ownership; Rights; Proprietary Information; Publicity.

Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, sui generis database rights and all other intellectual property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by or for or on behalf of Consultant in connection with the Services or any Proprietary Information (as defined below) (collectively, “Inventions”) and Consultant will promptly disclose and provide all Inventions to Company. Consultant hereby makes all assignments necessary to accomplish the foregoing ownership; provided that no assignment is made that extends beyond what would be allowed under California Labor Code Section 2870 (attached as Exhibit B) if Consultant was an employee of Company. Consultant shall assist Company, at Company’s expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce and defend any rights assigned. Consultant hereby irrevocably designates and appoints Company as its agents and attorneys-in-fact, coupled with an interest, to act for and on Consultant’s behalf to execute and file any document and to do all other lawfully permitted acts to further the foregoing with the same legal force and effect as if executed by Consultant and all other creators or owners of the applicable Invention.

Consultant agrees that all Inventions and all other business, technical and financial information (including, without limitation, the identity of and information relating to customers or employees) developed, learned or obtained by or for or on behalf of Consultant during the period that Consultant is to be providing the Services that relate to Company or the business or demonstrably anticipated business of Company or in connection with the Services or that are received by or for Company in confidence, constitute “Proprietary Information.” Consultant shall hold in confidence and not disclose or, except in performing the Services, use any Proprietary Information. However, Consultant shall not be obligated under this paragraph with respect to information Consultant can document is or becomes readily publicly available without restriction through no fault of Consultant. Upon termination or as otherwise requested by Company, Consultant will promptly provide to Company all items and copies containing or embodying Proprietary Information, except that Consultant may keep its personal copies of its compensation records and this Agreement. Consultant also recognizes and agrees that Consultant has no expectation of privacy with respect to Company’s telecommunications, networking or information processing systems (including, without limitation, stored computer files, email messages and voice messages) and that Consultant’s activity, and any files or messages, on or using any of those systems may be monitored at any time without notice.

As additional protection for Proprietary Information, Consultant agrees that during the period over which it is to be providing the Services Consultant will not directly or indirectly encourage or solicit any employee or consultant of Company to leave Company for any reason.

To the extent allowed by law, Section 2.a and any license granted Company hereunder includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral,” or the like. To the extent any of the foregoing is ineffective under applicable law, Consultant hereby provides any and all ratifications and consents necessary to accomplish the purposes of the foregoing to the extent possible. Consultant will confirm any such ratifications and consents from time to time as requested by Company. If any other person is in any way involved in any Services, Consultant will obtain the foregoing ratifications, consents and authorizations from such person for Company’s exclusive benefit.

If any part of the Services or Inventions or information provided hereunder is based on, incorporates, or is an improvement or derivative of, or cannot be reasonably and fully made, used, reproduced, distributed and otherwise exploited without using or violating technology or intellectual property rights owned by or licensed to Consultant (or any person involved in the Services) and not assigned hereunder, Consultant hereby grants Company and its successors a perpetual, irrevocable, worldwide royalty-free, non-exclusive, sublicensable right and license to exploit and exercise all such technology and intellectual property rights in support of Company’s exercise or exploitation of the Services, Inventions, other work or information performed or provided hereunder, or any assigned rights (including any modifications, improvements and derivatives of any of them).

Warranties and Other Obligations. Consultant represents, warrants and covenants that: (i) the Services will be performed in a professional and workmanlike manner and that none of such Services nor any part of this Agreement is or will be inconsistent with any obligation Consultant may have to others; (ii) all work under this Agreement shall be Consultant’s original work and none of the Services or Inventions nor any development, use, production, distribution or exploitation thereof will infringe, misappropriate or violate any intellectual property or other right of any person or entity (including, without limitation, Consultant); (iii) Consultant has the full right to allow it to provide Company with the assignments and rights provided for herein (and has written enforceable agreements with all persons necessary to give it the rights to do the foregoing and otherwise fully perform this Agreement; (iv) Consultant shall comply with all applicable laws and Company safety rules in the course of performing the Services; and (v) if Consultant’s work requires a license, Consultant has obtained that license and the license is in full force and effect.

Termination. Either party may terminate this Agreement at any time, for any reason, by giving the other party 10 days’ notice. Sections 2 (subject to the limitations set forth in Section 2.c) through 9 of this Agreement and any remedies for breach of this Agreement shall survive any termination or expiration. Company may communicate the obligations contained in this Agreement to any other (or potential) client or employer of Consultant.

Relationship of the Parties; Independent Contractor; No Employee Benefits. Consultant is an independent contractor (not an employee or other agent) solely responsible for the manner and hours in which the Services are performed, is solely responsible for all taxes, withholdings and other statutory, regulatory or contractual obligations of any sort (including, but not limited to, those relating to workers’ compensation, disability insurance, Social Security, unemployment compensation coverage, the Fair Labor Standards Act, income taxes, etc.), and is not entitled to participate in any employee benefit plans, fringe benefit programs, group insurance arrangements or similar programs of Company. Consultant will ensure that its employees, contractors and others involved in the Services, if any, are bound in writing to the foregoing, and to all of Consultant’s obligations under any provision of this Agreement, for Company’s benefit and Consultant will be responsible for any noncompliance by them.

Assignment. This Agreement and the services contemplated hereunder are personal to Consultant and Consultant shall not have the right or ability to assign, transfer or subcontract any rights or obligations under this Agreement without the written consent of Company. Any attempt to do so shall be void. Company may fully assign and transfer this Agreement in whole or part.

Notice. All notices under this Agreement shall be in writing and shall be deemed given (a) when personally delivered, (b) when sent by electronic mail to the address set forth below on Consultant’s signature page hereto, as updated from time to time by notice to the Company or (c) when delivery is confirmed electronically with a tracking number by prepaid certified or registered U.S. mail to the address of the party to be noticed as set forth herein or to such other address as such party last provided to the other by written notice.

Miscellaneous. Any breach of Section 2 or 3 will cause irreparable harm to Company for which damages would not be an adequate remedy, and therefore, Company will be entitled to injunctive relief with respect thereto in addition to any other remedies. The failure of either party to enforce its rights under this Agreement at any time for any period shall not be construed as a waiver of such rights. Other than that certain Indemnity Agreement by and between the Company and Consultant dated October 15, 2013, this Agreement represents the entire understanding between the parties with respect to the subject matter hereof to the exclusion of all other terms and conditions, and no changes, additions, modifications or waivers to this Agreement will be effective unless in writing and signed by both parties. In the event that any provision of this Agreement shall be determined to be illegal or unenforceable, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to the conflicts of laws provisions thereof. Headings herein are for convenience of reference only and shall in no way affect interpretation of the Agreement.

Arbitration. Any controversy or claim (except those regarding Inventions, Proprietary Information or intellEx-10.1ectual property) arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof, provided however, that each party will have a right to seek injunctive or other equitable relief in a court of law. The prevailing party will be that party who may be fairly said by the arbitrator(s) to have prevailed on the major disputed issues. Consultant hereby consents to the arbitration in the State of California in the county of San Diego.

NOTICE: This agreement does not affect any immunity under 18 USC Sections 1833(b) (1) or (2), which read as follows (note that for purposes of this statute only, individuals performing work as contractors or consultants are considered to be employees):

(1)

An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(2)

An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

EXHIBIT A

SERVICES The Consultant shall perform the following services for the Company:

Services to be mutually agreed upon by the Company’s Chief Executive Officer and Consultant from time to time.

FEES/EXPENSES

Company shall pay Consultant at a rate of $800.00 per hour, payable monthly in arrears.

OPTIONS

Geoffrey O’Brien (you) was granted one or more stock options (each, an “Option”) to purchase shares of the Company’s common stock (the “Common Stock”) under the Company’s 2013 Equity Incentive Plan, as amended (the “2013 Plan”) and the Company’s 2023 Equity Incentive Plan (the “2023 Plan”). For the avoidance of doubt, (i) pursuant to the applicable notice of stock option grants and stock option agreements (collectively, the “Stock Option Agreements”) between you and the Company, any shares subject to your Options that are vested and exercisable as of the Effective Date of this Agreement shall remain exercisable at any time until the date three months after the termination of this Agreement (and such shares to the extent unexercised will expire on such date) and (ii) any shares subject to your Options that were not vested and exercisable as of the Effective Date of this Agreement were forfeited and cancelled as of the Effective Date.

INDEMNIFICATION

For the avoidance of doubt, that certain Indemnity Agreement by and between the Company and Consultant dated October 15, 2013 shall remain in effect until this Agreement is terminated.

EXHIBIT B

California Labor Code Section 2870. Application of provision providing that employee shall assign or offer to assign rights in invention to employer.

(a)

Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1)

Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

(2)

Result from any work performed by the employee for his employer.

(b)

To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

Exhibit 31.1

MEDICINOVA, INC.

Certification of the Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a)

as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Yuichi Iwaki, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 of MediciNova, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 8, 2024

By:		/s/ YUICHI IWAKI
		Yuichi Iwaki, M.D., Ph.D.
		President and Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2

MEDICINOVA, INC.

Certification of the Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a)

as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Jason Kruger, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 of MediciNova, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 8, 2024

By:		/s/ JASON KRUGER
		Jason Kruger
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q of MediciNova, Inc. (the “Company”) for the quarter ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Yuichi Iwaki, as President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 8, 2024

By:		/s/ Yuichi Iwaki
		Yuichi Iwaki, M.D., Ph.D.
		President and Chief Executive Officer
		(Principal Executive Officer)

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and such certification is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q of MediciNova, Inc. (the “Company”) for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jason Kruger, as Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 8, 2024

By:		/s/ JASON KRUGER
		Jason Kruger
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Aug. 05, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Trading Symbol	MNOV
Entity Registrant Name	MEDICINOVA, INC.
Entity Central Index Key	0001226616
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		49,046,246
Entity Shell Company	false
Entity File Number	001-33185
Entity Tax Identification Number	33-0927979
Entity Address, Address Line One	4275 Executive Square
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	La Jolla
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92037
City Area Code	858
Local Phone Number	373-1500
Entity Current Reporting Status	Yes
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	DE
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, $0.001 par value
Security Exchange Name	NASDAQ

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 44,337,824	$ 50,999,442
Prepaid expenses and other current assets	1,167,763	174,938
Total current assets	45,505,587	51,174,380
Goodwill	9,600,240	9,600,240
In-process research and development	4,800,000	4,800,000
Property and equipment, net	35,813	45,800
Right-of-use asset	443,172	575,406
Other non-current assets	18,996	74,151
Total assets	60,403,808	66,269,977
Current liabilities:
Accounts payable	667,695	1,003,937
Accrued liabilities and other current liabilities	1,636,637	2,059,238
Operating lease liability	190,047	215,926
Total current liabilities	2,494,379	3,279,101
Deferred tax liability	201,792	201,792
Other non-current liabilities	302,483	410,660
Total liabilities	2,998,654	3,891,553
Commitments and contingencies (Note 4)
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized at June 30, 2024 and December 31, 2023; 49,046,246 and 49,046,246 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	49,046	49,046
Additional paid-in capital	478,572,046	478,149,161
Accumulated other comprehensive loss	(131,527)	(118,090)
Accumulated deficit	(421,084,411)	(415,701,693)
Total stockholders’ equity	57,405,154	62,378,424
Total liabilities and stockholders' equity	$ 60,403,808	$ 66,269,977

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	49,046,246	49,046,246
Common stock, shares outstanding	49,046,246	49,046,246

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Operating expenses:
Research, development and patents	$ 1,646,049	$ 1,735,735	$ 3,427,918	$ 3,212,411
General and administrative	1,400,447	1,564,295	2,754,571	3,050,862
Total operating expenses	3,046,496	3,300,030	6,182,489	6,263,273
Operating loss	(3,046,496)	(3,300,030)	(6,182,489)	(6,263,273)
Interest income	435,351	451,420	832,861	960,466
Other expense	(17,055)	(23,210)	(33,090)	(486,517)
Net loss	$ (2,628,200)	$ (2,871,820)	$ (5,382,718)	$ (5,789,324)
Basic net loss per common share	$ (0.05)	$ (0.06)	$ (0.11)	$ (0.12)
Diluted net loss per common share	$ (0.05)	$ (0.06)	$ (0.11)	$ (0.12)
Shares used to compute basic net loss per common share	49,046,246	49,046,246	49,046,246	49,046,246
Shares used to compute diluted net loss per common share	49,046,246	49,046,246	49,046,246	49,046,246
Net loss	$ (2,628,200)	$ (2,871,820)	$ (5,382,718)	$ (5,789,324)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(4,545)	(4,213)	(13,437)	(5,755)
Comprehensive loss	$ (2,632,745)	$ (2,876,033)	$ (5,396,155)	$ (5,795,079)

Condensed Consolidated Statements of Stockholders' Equity - USD ($)	Total	Common stock	Additional paid-in capital	Accumulated other comprehensive loss	Accumulated deficit
Balance at Dec. 31, 2022	$ 70,242,035	$ 49,046	$ 477,438,451	$ (115,285)	$ (407,130,177)
Balance, shares at Dec. 31, 2022		49,046,246
Share-based compensation	403,263		403,263
Net loss	(2,917,504)				(2,917,504)
Foreign currency translation adjustments	(1,542)			(1,542)
Balance at Mar. 31, 2023	67,726,252	$ 49,046	477,841,714	(116,827)	(410,047,681)
Balance, shares at Mar. 31, 2023		49,046,246
Balance at Dec. 31, 2022	70,242,035	$ 49,046	477,438,451	(115,285)	(407,130,177)
Balance, shares at Dec. 31, 2022		49,046,246
Net loss	(5,789,324)
Foreign currency translation adjustments	(5,755)
Balance at Jun. 30, 2023	65,175,929	$ 49,046	478,167,424	(121,040)	(412,919,501)
Balance, shares at Jun. 30, 2023		49,046,246
Balance at Mar. 31, 2023	67,726,252	$ 49,046	477,841,714	(116,827)	(410,047,681)
Balance, shares at Mar. 31, 2023		49,046,246
Share-based compensation	325,710		325,710
Net loss	(2,871,820)				(2,871,820)
Foreign currency translation adjustments	(4,213)			(4,213)
Balance at Jun. 30, 2023	65,175,929	$ 49,046	478,167,424	(121,040)	(412,919,501)
Balance, shares at Jun. 30, 2023		49,046,246
Balance at Dec. 31, 2023	62,378,424	$ 49,046	478,149,161	(118,090)	(415,701,693)
Balance, shares at Dec. 31, 2023		49,046,246
Share-based compensation	215,430		215,430
Net loss	(2,754,518)				(2,754,518)
Foreign currency translation adjustments	(8,892)			(8,892)
Balance at Mar. 31, 2024	59,830,444	$ 49,046	478,364,591	(126,982)	(418,456,211)
Balance, shares at Mar. 31, 2024		49,046,246
Balance at Dec. 31, 2023	62,378,424	$ 49,046	478,149,161	(118,090)	(415,701,693)
Balance, shares at Dec. 31, 2023		49,046,246
Net loss	(5,382,718)
Foreign currency translation adjustments	(13,437)
Balance at Jun. 30, 2024	57,405,154	$ 49,046	478,572,046	(131,527)	(421,084,411)
Balance, shares at Jun. 30, 2024		49,046,246
Balance at Mar. 31, 2024	59,830,444	$ 49,046	478,364,591	(126,982)	(418,456,211)
Balance, shares at Mar. 31, 2024		49,046,246
Share-based compensation	207,455		207,455
Net loss	(2,628,200)				(2,628,200)
Foreign currency translation adjustments	(4,545)			(4,545)
Balance at Jun. 30, 2024	$ 57,405,154	$ 49,046	$ 478,572,046	$ (131,527)	$ (421,084,411)
Balance, shares at Jun. 30, 2024		49,046,246

Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Operating activities:
Net loss	$ (5,382,718)	$ (5,789,324)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash stock-based compensation	422,885	728,973
Depreciation and amortization	10,720	9,100
Loss on disposal of investments		102,513
Change in carrying amount of right-of-use asset	85,595	98,643
Changes in assets and liabilities:
Prepaid expenses and other assets	(947,502)	(182,896)
Accounts payable, accrued liabilities and other liabilities	(780,838)	(428,876)
Operating lease liabilities	(87,320)	(98,562)
Net cash used in operating activities	(6,679,178)	(5,560,429)
Investing activities:
Proceeds from disposal of investments		39,929,015
Acquisitions of property and equipment	(891)	(18,577)
Net cash (used in)/provided by investing activities	(891)	39,910,438
Effect of exchange rate changes on cash and cash equivalents	18,451	20,769
Net change in cash and cash equivalents	(6,661,618)	34,370,778
Cash and cash equivalents, beginning of period	50,999,442	18,505,493
Cash and cash equivalents, end of period	44,337,824	52,876,271
Supplemental disclosure of non-cash investing activities:
Right-of-use asset obtained in exchange for operating lease liability	42,281	$ 139,001
Change in carrying amount of right-of-use asset due to termination of lease	$ 79,229

Pay vs Performance Disclosure - USD ($)	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($)	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (2,628,200)	$ (2,754,518)	$ (2,871,820)	$ (2,917,504)	$ (5,382,718)	$ (5,789,324)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Interim Financial Information

6 Months Ended

Jun. 30, 2024

Quarterly Financial Information Disclosure [Abstract]

Interim Financial Information

1. Interim Financial Information

Organization and Business

Basis of Presentation

Principles of Consolidation

Segment Reporting

Cash and Cash Equivalents

Investments

Research, Development and Patents

Clinical Trial Accruals and Prepaid Expenses

Leases

Use of Estimates

Recently Issued Accounting Pronouncements

Revenue Recognition

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue Recognition

2. Revenue Recognition

Revenue Recognition Policy

Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements


Level 1:	Observable inputs such as quoted prices in active markets;

Level 2:	Inputs are quoted prices for similar items in active markets or quoted prices for identical or similar items in markets that are not active near the measurement date; and

Level 3:	Unobservable inputs due to little or no market data, which require the reporting entity to develop its own assumptions.

The carrying amount and approximate fair value of financial instruments as of June 30, 2024 and December 31, 2023, were as follows:


	June 30, 2024				December 31, 2023
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Valuation Inputs
Cash and cash equivalents:
Mutual funds	$	20,980,327	$	20,980,327	$	782,382	$	782,382	Level 1

Commitments and Contingencies

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

4. Commitments and Contingencies

Lease Commitments

Information related to the Company’s right-of-use assets and related lease liabilities are as follows:


	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Cash paid for operating lease liabilities	$	64,239	$	64,024	$	128,833	$	127,391
Operating lease costs		62,122		64,011		125,301		128,022


	June 30,			December 31,
	2024			2023
Current operating lease liabilities	$	190,047		$	215,926
Non-current operating lease liabilities		302,483			410,660
Total operating lease liabilities	$	492,530		$	626,586

Weighted-average remaining lease term (in years)		2.47			2.81
Weighted-average discount rate		9.6	%		9.3	%


Maturities of operating lease liabilities as of June 30, 2024 were as follows:
2024 (remaining six months)	$	109,879
2025		223,396
2026		206,483
2027		17,269
2028		—
Thereafter		—
Total minimum payments		557,027
Less imputed interest		(64,497	)
Total lease liabilities	$	492,530

Product Liability

License and Research Agreements

Legal Proceedings

Stock-based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

5. Stock-based Compensation

Stock Incentive Plans

As of June 30, 2024, 1,502,923 shares remain available for future grants under the 2023 Plan.

Stock Options

A summary of stock option activity and related information as of June 30, 2024 is as follows:


	Number of Option Shares			Weighted Average Exercise Price
Outstanding at December 31, 2023		7,781,749		$	5.52
Granted		1,100,000			1.51
Exercised		—			—
Cancelled		(450,105	)		2.15
Outstanding at June 30, 2024		8,431,644		$	5.13
Exercisable at June 30, 2024		7,536,644		$	5.61

Compensation Expense

Stock-based compensation expense for stock option awards are reflected in total operating expenses for each respective period.

The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2024 and 2023, respectively:


	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Research, development and patents	$	78,549	$	120,037	$	160,218	$	261,155
General and administrative		128,906		205,673		262,667		467,818
Total stock-based compensation expense	$	207,455	$	325,710	$	422,885	$	728,973


	Six months ended June 30,
	2024	2023
Stock Options
Risk-free interest rate	4.21 - 4.41%	3.59 - 4.13%
Expected volatility of common stock	72.60 - 74.05%	75.81 - 77.96%
Dividend yield	0.00%	0.00%
Expected term (in years)	5.30 - 5.77	5.13 - 5.38

Stockholders' Equity

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Stockholders' Equity

6. Stockholders’ Equity

At-The-Market Issuance Sales Agreements and Private Placement Transactions

No shares of common stock were sold under the ATM Agreement in the six months ended June 30, 2024 and 2023, respectively.

Net Loss Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Net Loss Per Share

7. Net Loss Per Share

Interim Financial Information (Policies)	6 Months Ended
Interim Financial Information (Policies)	Jun. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions of the Securities and Exchange Commission (SEC) on Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. In the opinion of management, the condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC. The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The balance sheet at December 31, 2023 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of MediciNova, Inc. and its wholly owned subsidiaries, MediciNova Japan, Inc., MediciNova (Europe) Limited, MediciNova Europe GmbH, MediciNova Canada, Inc. and Avigen Inc. The financial statements of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Intercompany transaction gains or losses at each period end are included as translation adjustments and recorded within other comprehensive income or loss. All intercompany transactions and balances are eliminated in consolidation.
Segment Reporting	Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company operates in a single operating segment – the acquisition and development of small molecule therapeutics for the treatment of serious diseases with unmet medical needs.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents consist of cash and other highly liquid investments including money market and mutual fund accounts, with original maturities of three months or less from the date of purchase.
Investments	Investments Investments purchased with an original maturity of greater than three months are classified as investments. Investments are stated at fair value and are classified as current or non-current based on the nature of the securities as well as their stated maturities.
Research Development and Patents	Research, Development and Patents Research and development costs are expensed in the period incurred. Research and development costs primarily consist of salaries and related expenses for personnel, facilities and depreciation, research and development supplies, licenses and outside services. Such research and development costs totaled $1.5 million and $1.6 million for the three months ended June 30, 2024 and 2023, respectively, and $3.2 million and $3.0 million for the six months ended June 30, 2024 and 2023, respectively. Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. The Company includes all external costs related to the filing of patents in Research, Development and Patents expenses. Such patent-related expenses totaled $0.1 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, and $0.2 million and $0.2 million for the six months ended June 30, 2024 and 2023, respectively. For transactions with a government where the Company receives government assistance in performing research and development activities and the accounting for a transaction is not specified within the scope of authoritative GAAP, the Company follows Accounting Standards Codification (ASC) 832, Government Assistance (Topic 832), applying a grant or contribution model by analogy to Subtopic 958-605, Not-for-Profit Entities-Revenue Recognition.
Clinical Trial Accruals and Prepaid Expenses	Clinical Trial Accruals and Prepaid Expenses Costs for preclinical studies, clinical studies and manufacturing activities are recognized as research and development expenses based on an evaluation of the progress by Company vendors towards completion of specific tasks, using data such as patient enrollment, clinical site activations or information provided to the Company by such vendors regarding their actual costs incurred. Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services are performed. The Company determines accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion of studies, or the services completed. The Company’s estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time. Costs that are paid in advance of performance are deferred as a prepaid expense and amortized over the service period as the services are provided.
Leases	Leases The Company determines if an arrangement is a lease at inception and if so, determines whether the lease qualifies as an operating or finance lease. The Company does not recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less and does not separate non-lease components from lease components. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expenses. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate that the Company would expect to pay to borrow on a collateralized and fully amortizing basis over a similar term an amount equal to the lease payments in a similar economic environment.
Use of Estimates	Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (ASU 2020-06). ASU 2020-06 simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded features that could be recognized separately from the host contract. Consequently, more convertible debt instruments will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 also requires use of the if-converted method in the diluted earnings per share calculation for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years for smaller reporting companies, with early adoption permitted. The new standard was effective for the Company on January 1, 2024. There was no impact on the consolidated financial statements upon adoption of this standard on January 1, 2024. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). ASU 2023-07 improves the disclosures about a public entity’s reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment’s expenses. Specifically, it requires that a public entity: 1) disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, 2) disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss, 3) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods, and 4) disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU also requires a public entity that has a single reportable segment to provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. Further, the ASU clarifies that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures. However, at least one of the reported segment profit or loss measures should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s consolidated financial statements. The amendments are effective for all public entities that are required to report segment information for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented. The Company is currently evaluating the potential impact that this standard will have on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures. Specifically, it requires that a public business entity: 1) disclose, on an annual basis, an income tax rate reconciliation in a tabular form, disclosing specific categories and providing additional information for reconciling items that meet a quantitative threshold, 2) disclose on an annual basis the following information about income taxes paid: i) the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, ii) the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received), 3) all entities are required to disclose: i) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and ii) income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this ASU should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the potential impact that this standard will have on its consolidated financial statements and related disclosures.
Revenue Recognition Policy	Revenue Recognition Policy Revenues historically have consisted mainly of research and development services performed under a contract with a customer. The Company evaluates the separate performance obligation(s) under each contract, allocates the transaction price to each performance obligation considering the estimated stand-alone selling prices of the services and recognizes revenue upon the satisfaction of such obligations at a point in time or over time dependent on the satisfaction of one of the following criteria: 1) the customer simultaneously receives and consumes the economic benefits provided by the vendor’s performance; 2) the vendor creates or enhances an asset controlled by the customer; 3) the vendor’s performance does not create an asset for which the vendor has an alternative use; and 4) the vendor has an enforceable right to payment for performance completed to date.

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Carrying Amount and Approximate Fair Value of Financial Instruments

The carrying amount and approximate fair value of financial instruments as of June 30, 2024 and December 31, 2023, were as follows:


	June 30, 2024				December 31, 2023
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Valuation Inputs
Cash and cash equivalents:
Mutual funds	$	20,980,327	$	20,980,327	$	782,382	$	782,382	Level 1

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Information Related to Right-of-Use Assets and Related Lease Liabilities

Information related to the Company’s right-of-use assets and related lease liabilities are as follows:


	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Cash paid for operating lease liabilities	$	64,239	$	64,024	$	128,833	$	127,391
Operating lease costs		62,122		64,011		125,301		128,022


	June 30,			December 31,
	2024			2023
Current operating lease liabilities	$	190,047		$	215,926
Non-current operating lease liabilities		302,483			410,660
Total operating lease liabilities	$	492,530		$	626,586

Weighted-average remaining lease term (in years)		2.47			2.81
Weighted-average discount rate		9.6	%		9.3	%

Schedule of Maturities of Operating Lease Liabilities


Maturities of operating lease liabilities as of June 30, 2024 were as follows:
2024 (remaining six months)	$	109,879
2025		223,396
2026		206,483
2027		17,269
2028		—
Thereafter		—
Total minimum payments		557,027
Less imputed interest		(64,497	)
Total lease liabilities	$	492,530

Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Stock Option Activity and Related Information

A summary of stock option activity and related information as of June 30, 2024 is as follows:


	Number of Option Shares			Weighted Average Exercise Price
Outstanding at December 31, 2023		7,781,749		$	5.52
Granted		1,100,000			1.51
Exercised		—			—
Cancelled		(450,105	)		2.15
Outstanding at June 30, 2024		8,431,644		$	5.13
Exercisable at June 30, 2024		7,536,644		$	5.61

Summary of Stock-based Compensation Expense

The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2024 and 2023, respectively:


	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Research, development and patents	$	78,549	$	120,037	$	160,218	$	261,155
General and administrative		128,906		205,673		262,667		467,818
Total stock-based compensation expense	$	207,455	$	325,710	$	422,885	$	728,973

Schedule of Assumptions Used in Estimating Fair Value of Options Granted and Performance-Based Stock Options

The following table provides the assumptions used in the Black-Scholes valuation model used to estimate the fair value of options granted during the six months ended June 30, 2024 and 2023, and to estimate the fair value of performance-based stock options as of June 30, 2024 and 2023.


	Six months ended June 30,
	2024	2023
Stock Options
Risk-free interest rate	4.21 - 4.41%	3.59 - 4.13%
Expected volatility of common stock	72.60 - 74.05%	75.81 - 77.96%
Dividend yield	0.00%	0.00%
Expected term (in years)	5.30 - 5.77	5.13 - 5.38

Interim Financial Information - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Quarterly Financial Information Disclosure [Abstract]
Research and development costs	$ 1.5	$ 1.6	$ 3.2	$ 3.0
Patent-related expenses	$ 0.1	$ 0.1	$ 0.2	$ 0.2

Fair Value Measurements - Schedule of Carrying Amount and Approximate Fair Value of Financial Instruments (Detail) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 44,337,824	$ 50,999,442
Fair Value Measurements Recurring \| Mutual Funds \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	20,980,327	782,382
Fair Value	$ 20,980,327	$ 782,382

Commitments and Contingencies - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) Option	Jun. 30, 2023 USD ($)	Dec. 31, 2023
Loss Contingencies [Line Items]
Operating lease discount rate	9.60%		9.60%		9.30%
Research and development expense	$ 1,500,000	$ 1,600,000	$ 3,200,000	$ 3,000,000.0
Licensing Agreements
Loss Contingencies [Line Items]
Research and development expense			0	$ 0
Product Development
Loss Contingencies [Line Items]
Future potential milestone payments	10,000,000		10,000,000
Development Milestone
Loss Contingencies [Line Items]
Future potential milestone payments	16,500,000		16,500,000
Commercialization Milestone
Loss Contingencies [Line Items]
Future potential milestone payments	$ 16,500,000		$ 16,500,000
U.S
Loss Contingencies [Line Items]
Operating lease term	5 years		5 years
Operating lease expiration date			Jan. 31, 2027
Tokyo, Japan \| Previous Lease Agreement
Loss Contingencies [Line Items]
Lessee, operating lease, existence of option to terminate			true
Tokyo, Japan \| New Lease Agreement
Loss Contingencies [Line Items]
Operating lease term	12 months		12 months
Operating lease expiration date, month and year			2025-05
Operating lease, auto-renewal term	2 months		2 months
Operating lease, extension term			2 months
Operating lease number of renewal option \| Option			1
Lessee, operating lease, existence of option to extend			true
Operating lease liability measurement term			14 months
Operating lease discount rate	6.95%		6.95%

Commitments and Contingencies - Schedule of Right-of-Use Assets and Related Lease Liabilities (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2022	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Cash paid for operating lease liabilities	$ 64,239	$ 64,024	$ 128,833	$ 127,391
Operating lease costs	62,122	$ 64,011	125,301	$ 128,022
Current operating lease liabilities	190,047		190,047		$ 215,926
Non-current operating lease liabilities	$ 302,483		$ 302,483		$ 410,660
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other non-current liabilities		Other non-current liabilities		Other non-current liabilities
Total operating lease liabilities	$ 492,530		$ 492,530		$ 626,586
Weighted-average remaining lease term (in years)	2 years 5 months 19 days		2 years 5 months 19 days		2 years 9 months 21 days
Weighted-average discount rate	9.60%		9.60%		9.30%

Commitments and Contingencies - Schedule of Maturities of Operating Lease Liabilities (Detail) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
2024 (remaining six months)	$ 109,879
2025	223,396
2026	206,483
2027	17,269
Total minimum payments	557,027
Less imputed interest	(64,497)
Total lease liabilities	$ 492,530	$ 626,586

Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average fair value, per option	$ 0.99	$ 1.6
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unamortized compensation cost	$ 0.4
Unamortized compensation cost, vesting period	7 months 17 days
Performance Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of vested shares	1,100,000
2013 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance			8,700,000
Shares available for future grant	1,502,923
2013 Plan \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted expiration term	10 years
2013 Plan \| Stock Option \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option, vesting period	1 year
2013 Plan \| Stock Option \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option, vesting period	4 years
2023 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant	9,934,567
2023 Plan \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted expiration term	10 years
2023 Plan \| Stock Option \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option, vesting period	1 year
2023 Plan \| Stock Option \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option, vesting period	4 years

Summary of Stock Option Activity and Related Information (Detail)	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Number of Option Shares
Stock Options, Beginning Balance \| shares	7,781,749
Stock Options, Granted \| shares	1,100,000
Stock Options, Cancelled \| shares	(450,105)
Stock Options, Ending Balance \| shares	8,431,644
Stock Options, Exercisable at June 30, 2024 \| shares	7,536,644
Weighted Average Exercise Price, Beginning Balance \| $ / shares	$ 5.52
Weighted Average Exercise Price, Granted \| $ / shares	1.51
Weighted Average Exercise Price, Cancelled \| $ / shares	2.15
Weighted Average Exercise Price, Ending Balance \| $ / shares	5.13
Weighted Average Exercise Price, Exercisable at June 30, 2024 \| $ / shares	$ 5.61

Summary of Stock-based Compensation Expenses (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 207,455	$ 325,710	$ 422,885	$ 728,973
Research, Development and Patents
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	78,549	120,037	160,218	261,155
General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 128,906	$ 205,673	$ 262,667	$ 467,818

Schedule of Assumptions Used in Estimating Fair Value of Options Granted and Performance-Based Stock Options (Detail) - Stock Option	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Weighted-average assumptions for stock options and ESPP
Risk-free interest rate, Minimum	4.21%	3.59%
Risk-free interest rate, Maximum	4.41%	4.13%
Expected volatility of common stock, Minimum	72.60%	75.81%
Expected volatility of common stock, Maximum	74.05%	77.96%
Dividend yield	0.00%	0.00%
Minimum
Weighted-average assumptions for stock options and ESPP
Expected term (in years)	5 years 3 months 18 days	5 years 1 month 17 days
Maximum
Weighted-average assumptions for stock options and ESPP
Expected term (in years)	5 years 9 months 7 days	5 years 4 months 17 days

Stockholders' Equity - Additional Information (Detail) - USD ($)		6 Months Ended
	Aug. 23, 2019	Jun. 30, 2024	Jun. 30, 2023
ATM Agreement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of common stock in a private transaction, net of issuance costs, shares		0	0
2019 at-the-market issuance sales agreement \| B. Riley FBR
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Sales commission as a percentage of gross proceeds	3.50%
2019 at-the-market issuance sales agreement \| Maximum \| B. Riley FBR
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock purchase agreement, aggregate amount of common stock agreed to be purchased	$ 75,000,000

Net Loss Per Share - Additional Information (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Earnings Per Share [Abstract]
Potentially dilutive outstanding stock options excluded from diluted net loss per common share	8,431,644	8,286,416	8,431,644	8,286,416