27 Dec

How Do Marinus Pharmaceuticals’ Financials Look?

WRITTEN BY Kenneth Smith

Equity dilution

Marinus Pharmaceuticals (MRNS) raised $37.7 million in net proceeds from a secondary public offering of common stock. The number of outstanding shares rose from 19.7 million in September 2016 to ~40.5 million in September 2017.

How Do Marinus Pharmaceuticals’ Financials Look?

Equity distribution agreement

Marinus Pharmaceuticals (MRNS) entered an equity distribution agreement (or EDA) with JMP Securities in August 2015. In accordance with the agreement, JMP as an exclusive agent of the company and at the company’s discretion, can sell up to a maximum of $35 million of shares in the company over a three-year period.

This agreement terminates upon the sale of all the shares subject to the EDA, or August 2018, or the termination of the agreement, whichever is the earliest.

Marinus has agreed to pay 3% of the gross sales of shares as commission to JMP. So far in fiscal 2017 Marinus has issued ~9.8 million shares pursuant to the EDA and raised $14.9 million in net proceeds. At the end of 3Q17, a total of $20 million was available under the equity distribution agreement.

Net loss during 3Q17 decreased to $4.1 million from $6.5 million in 3Q16. Net loss per share fell from -$0.33 for 3Q16 to -$0.15 for 3Q17. This improvement was attributable to a significant decrease in operating expenses from $6.3 million in 3Q16 to $4.2 million in 3Q17.

By comparison, peers Sage Therapeutics (SAGE), Zogenix (ZGNX), and Zynerba Pharmaceuticals (ZYNE) reported net income per share of -$1.97, -$1.68, and -$0.63, respectively.

Debt and interest levels

In 2014, the company had raised $7 million through borrowings. In July 2017, the company repaid the entire outstanding term loan of $3.5 million. Consequently, interest expense fell from $118,000 for 3Q16 to $3,000 in 3Q17.

In the next part of the series, we’ll take a look at the key risks facing Marinus Pharmaceuticals.

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