On August 17, 2020 Mateon Therapeutics (OTC.QB: MATN), a leading developer of TGF-β therapeutics, reported financial results for the second quarter ended June 30, 2020 (Press release, Mateon Therapeutics, AUG 17, 2020, View Source [SID1234563710]). Unless otherwise stated, all comparisons are for the second quarter of 2020 compared to the second quarter of 2019.
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We recorded services revenue of $1.4 million during the three months ended June 30, 2020 as compared to no revenues during the same period ended in 2019. The revenue of $0.9 million was recorded from services provided to Golden Mountain Partners (GMP) during the period ended June 30, 2020 in connection with the development of OT-101 for COVID-19. We also recorded $0.5 million in revenues from Autotelic Bio (ATB) upon the successful completion of the in-vivo efficacy studies of OT-101 combination with IL-2 based on the ATB Agreement.
Research and development ("R&D") expenses increased by approximately $0.1 million for the three months ended June 30, 2020 compared to the same period in 2019. The higher R&D cost was primarily due to by higher amortization of intangibles of $0.1 million. The financial information presented does not include any R&D activity for PointR for the period ended June 30, 2019. General and administrative ("G&A") expenses increased by approximately $0.1 million for the three months ended June 30, 2020 compared to the three months ended June 30, 2019, primarily due to increases of approximately $0.1 million due to increase in legal and professional expenses.
As a result of our mergers with Oncotelic and PointR, we expect to increase R&D and G&A expenses, including the initiation of new clinical trials including those for COVID-19, and therefore believe that research and development expenses will increase for the remainder of 2020 compared to research and development expenses in 2019.
"We are pleased to announce that despite the challenges presented by the COVID-19 situation, we were able to achieve revenue of $1.4 million," said Amit Shah, CFO of Mateon. "Additionally, 2020 Financing has resulted in gross proceeds of $2.5 million to the Company. Coupled with the $2.0 million in debt funding by GMP specifically for the COVID-19 trial, the company is in a position to execute on its objectives, including the spinoff of Edgepoint in the coming months and the development of OT-101 and Artemisinin. Overall, the company has raised over $6.0 million between revenues and financing in 1H20."
"Based on the approval accorded by the shareholders of Mateon, we anticipate the name change of the Company to Oncotelic Inc. (Oncotelic) on or before the end of September. The change in name reflects the acquisition of Mateon by Oncotelic back in April 2019", said Dr. Vuong Trieu, CEO of Mateon. "In addition, the assets of the Company, in OT-101 and Artemisinin, are both Oncotelic assets and the Company has been developing them to create shareholder value. The legacy Mateon assets are being repositions as therapeutics for rare pediatric oncology and may be spun off in the future. Over the past year, the Company has been working on development of OT-101, as an Oncology therapeutic as well for COVID-19, as well as Artemisinin for COVID-19. We expect that the development of these drugs will enhance significant shareholder value for the Company. We are also developing technologies within the artificial intelligence space (AI) through our AI division in EdgePoint Inc. (EdgePoint). The Company will develop these technologies in-house and at the appropriate time, consider how to monetize of spin-off of these assets and technologies. We are confident our efforts will create significant shareholder value similar to companies within the similar space.
We expect the EdgePoint spinoff to be completed on or before year end. We are confident that the EdgePoint spinoff will be successful given the early involvement of luminaries such as IBM, Balaji Baktha – Leading Silicon Valley VC, and Dr. Sanjay Jha- the former CEO of Motorola and COO/President of Qualcomm.