# DBV Technologies S.A.: Form 10-Q for the period ended Sep 30, 2022

- Company: [DBV Technologies S.A.](/companies/dbvt.md) (CIK 1613780)
- Form: 10-Q
- Filed: 2022-11-03
- Accepted by EDGAR: Nov 3, 2022, 17:31 ET
- Period: 2022-09-30
- Accession: 0001193125-22-277052
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1613780/000119312522277052/d357122d10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1613780/000119312522277052/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2022-07-01 to 2022-09-30 | $2.1m | us-gaap:Revenues |
| Revenue | 9 months, 2022-01-01 to 2022-09-30 | $6.1m | us-gaap:Revenues |
| Research and development | 3 months, 2022-07-01 to 2022-09-30 | $15.1m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2022-01-01 to 2022-09-30 | $45.9m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2022-07-01 to 2022-09-30 | −$18.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2022-01-01 to 2022-09-30 | −$58.6m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2022-07-01 to 2022-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2022-01-01 to 2022-09-30 | $87.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2022-07-01 to 2022-09-30 | −$17.3m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2022-01-01 to 2022-09-30 | −$57.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2022-07-01 to 2022-09-30 | −$0.18 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2022-01-01 to 2022-09-30 | −$0.79 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2022-07-01 to 2022-09-30 | −$0.18 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2022-01-01 to 2022-09-30 | −$0.79 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2022-07-01 to 2022-09-30 | 93,905,050 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2022-01-01 to 2022-09-30 | 71,779,572 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2022-01-01 to 2022-09-30 | −$31.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2022-01-01 to 2022-09-30 | $742.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2022-09-30 | $212.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2022-09-30 | $225.7m | us-gaap:AssetsCurrent |
| Total assets | at 2022-09-30 | $248.1m | us-gaap:Assets |
| Current liabilities | at 2022-09-30 | $28.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2022-09-30 | $36.1m | us-gaap:Liabilities |
| Shareholders' equity | at 2022-09-30 | $212.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 36,583 characters.

*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part 1, Item 1 of this Report and with our audited financial statements and related notes thereto for the year ended December 31, 2021, included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 9, 2022, or the Annual Report. This discussion and other parts of this Report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause such differences are discussed in the section of this Report titled “Special Note Regarding Forward-Looking Statements” and under “Item 1A. Risk Factors” in the Annual Report.*

### Overview

We are a clinical-stage specialty biopharmaceutical company focused on changing the field of immunotherapy by developing a novel technology platform called Viaskin. Our therapeutic approach is based on epicutaneous immunotherapy, or EPITTM, our proprietary method of delivering biologically active compounds to the immune system through intact skin using Viaskin. We have generated significant data demonstrating that Viaskin’s mechanism of action is novel and differentiated, as it targets specific antigen-presenting immune cells in the skin, called Langerhans cells, that capture the antigen and migrate to the lymph node in order to activate the immune system without passage of the antigen into the bloodstream, minimizing systemic exposure in the body. We are advancing this unique technology to treat patients, including infants and children, suffering from food allergies, for whom safety is paramount, since the introduction of the offending allergen into their bloodstream can cause severe or life-threatening allergic reactions, such as anaphylactic shock. We believe Viaskin may offer convenient, self-administered, non-invasive immunotherapy to patients. Our most advanced clinical program is Viaskin Peanut.

#### ViaskinTM Peanut for children ages 4-11 in the United States

In January 2021, the Company received written responses from the FDA to questions provided in the Type A meeting request the Company submitted in October 2020 following the Complete Response Letter received in August 2020. The FDA agreed with its position that a modified Viaskin Peanut patch should not be considered as a new product entity provided the occlusion chamber of the current Viaskin Peanut patch and the peanut protein dose of 250 µg (approximately 1/1000 of one peanut) remains unchanged and performs in the same way it has performed previously. In order to confirm the consistency of efficacy data between the existing and a modified patch, FDA requested an assessment comparing the uptake of allergen (peanut protein) between the patches in peanut allergic children ages 4-11. The Company named that assessment EQUAL, which stands for Equivalence in Uptake of ALlergen. The FDA also recommended conducting a 6-month, well-controlled safety and adhesion trial to assess a modified Viaskin Peanut patch in the intended patient population. The Company later named this study STAMP, which stands for Safety, Tolerability, and Adhesion of Modified Patches

Based on the January 2021 FDA feedback, the Company defined three parallel workstreams:

1\. Identify a modified Viaskin patch (“mVP”).

2\. Generate the 6-month safety and adhesion clinical data FDA requested via STAMP, which the Company expected to be the longest component of the mVP clinical plan. The Company prioritized the STAMP protocol submission so the Company could begin the study as soon as possible.

3\. Demonstrate the equivalence in allergen uptake between the current and modified patches in the intended patient population via EQUAL. The complexity of EQUAL hinged on the lack of established clinical and regulatory criteria to characterize allergen uptake via an epicutaneous patch. To support those exchanges, the Company outlined its proposed approach to demonstrate allergen uptake equivalence between the two patches, and allotted time to generate informative data through two additional studies:

a. PREQUAL, a Phase I study with adult healthy volunteers to optimize the allergen sample collection methodologies and validate the assays the Company intends to use in EQUAL

b. ‘EQUAL in adults’—a second Phase I study with adult healthy volunteers to compare the allergen uptake of cVP and mVP;

In March 2021, the Company commenced CHAMP (Comparison of adHesion Among Modified Patches), a trial in healthy adult volunteers to evaluate the adhesion of five modified Viaskin Peanut patches, to identify the one or two best-performing patches, which the Company completed in the second quarter of 2021. Based on the adhesion parameters studied, the Company selected the modified patch to advance to further clinical testing in the intended patient population. All modified Viaskin Peanut patches demonstrated better adhesion performance as compared to the then-current Viaskin Peanut patch, and the Company then selected two modified patches that performed best out of the five modified patches studied for further development. The Company then selected the circular patch for further development, which is larger in size relative to the current patch and circular in shape.

In May 2021, the Company submitted its proposed STAMP protocol to the FDA, and in October 2021, the Company received an Advice/Information Request letter from the FDA. In this letter, the FDA requested a stepwise approach to the modified Viaskin patch development program and provided partial feedback on the STAMP protocol. Specifically, the FDA requested that the Company conduct allergen uptake comparison studies (i.e., ‘EQUAL in Adults’, EQUAL), and submit the allergen uptake comparison data for FDA review and feedback prior to starting the STAMP study.

After careful review of the FDA’s information requests, in December 2021, the Company decided not to pursue the stepwise approach to the development plans for Viaskin Peanut as requested by the FDA in the October 2021 letter. The Company estimated that the FDA’s newly proposed stepwise approach would require at least five rounds of exchanges that necessitate FDA alignment prior to initiating STAMP, the 6-month safety and adhesion study. As such, in December 2021, the Company announced its plan to initiate a pivotal Phase III placebo-controlled efficacy trial for a modified Viaskin Peanut patch (mVP) in children in the intended patient population. The clinical trial will also include updates to the Instructions for Use (IFU). The Company considers this approach the most straightforward to potentially demonstrate effectiveness, safety, and improved in vivo adhesion of the modified Viaskin Peanut system. The FDA confirmed the Company’s change in strategy is agreeable via oral and written exchanges.

The new Phase 3 pivotal study for modified Viaskin Peanut has been named VITESSE (Viaskin Peanut Immunotherapy Trial to Evaluate Safety, Simplicity and Efficacy), which means “speed” in French.

In May 2022, the Company announced that the FDA granted it a Type C meeting to align on the protocol and the study protocol was submitted to the FDA as part of the Type C meeting briefing package.

On September 9, 2022, the Company announced the initiation of the Phase 3 study, using the modified Viaskin™ Peanut Patch, in peanut-allergic children ages 4 to 7 years.

On September 21, 2022, the Company announced it received feedback from the U.S. FDA in the form of a partial clinical hold on its VITESSE Phase 3 clinical study. In the partial clinical hold letter, the FDA specifies changes to elements of the VITESSE protocol with the intent for the trial to support a future BLA submission. The modifications noted within the FDA’s communication address design elements, including the statistical analysis of adhesion, minimum daily wear time and technical alignments in methods of categorizing data, to meet study objectives as well as the total number of trial participants on active treatment. The Company has not yet begun the screening or recruitment of subjects in the VITESSE study. The partial clinical hold is specific to VITESSE and does not impact any other ongoing its clinical studies. The Company expects to provide additional updates following consultation with the FDA.

#### Viaskin Peanut for children ages 4-11 - European Union Regulatory History and Current Status

In August 2021, the Company announced its receipt from the EMA of the Day 180 list of outstanding issues, which is an established part of the prescribed EMA review process. It is a letter that is meant to include any remaining questions or objections at that stage in the process. The EMA indicated many of their objections and major objections from the Day 120 list of questions had been answered. One major objection remained at Day 180. The Major Objection questioned the limitations of the data, for example, the clinical relevance and effect size supported by a single pivotal study.

In December 2021, the Company announced it had withdrawn the Marketing Authorization Application for Viaskin Peanut and formally notified the EMA of our decision. The initial filing was supported by positive data from a single, placebo-controlled Phase 3 pivotal trial known as PEPITES (V712-301). The decision to withdraw was based on the view of EMA Committee for Medicinal Products for Human Use (CHMP) that the data available to date from a single pivotal study were not sufficient to preclude a Major Objection at Day 180 in the review cycle. The Company believes data from a second Viaskin Peanut pivotal study will support a more robust path for licensure of Viaskin Peanut in the EU. The Company intends to resubmit the MAA when that data set is available.

#### Viaskin Peanut for children ages 1-3

In June 2020, the Company announced that in Part A, patients in both treatment arms showed consistent treatment effects after 12 months of therapy, as assessed by a double-blind placebo-controlled food challenge and biomarker results. Part A subjects were not included in Part B and the efficacy analyses from Part A were not statistically powered to demonstrate superiority of either dose versus placebo. These results validate the ongoing investigation of the 250 Pg dose in this age group, which is the dose being studied in Part B of the study. Enrollment for Part B of EPITOPE was completed in the first quarter of 2022.

In June 2022, The Company announced that its pivotal Phase III trial EPITOPE, assessing the safety and efficacy of Viaskin™ Peanut 250 µg for the treatment of peanut-allergic toddlers ages 1 to 3 years, met its primary endpoint. Viaskin Peanut demonstrated a statistically significant treatment effect (p\<0.001), with 67.0% of subjects in the Viaskin Peanut arm meeting the treatment responder criteria after 12 months, as compared to 33.5% of subjects in the placebo arm (difference in response rates = 33.4 %, 95 % CI = 22.4% - 44.5 %).

DBV intends to further analyze the data from EPITOPE and explore regulatory pathways for Viaskin Peanut in children ages 1 to 3 years, given the high unmet need and absence of approved treatments for this vulnerable population.

### Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the revenue, costs and expenses recognized during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

There have been no new policies or significant changes to our critical accounting policies as disclosed in the critical accounting policies described in the Annual Report. Our significant accounting policies are more fully described in Note 1 of the Notes to the Consolidated Financial Statements in Part I, Item 1 of our Annual Report.

### Business trends and Results of Operations

#### Comparison of the Three Months Ended September 30, 2022 and 2021

The following table summarizes our results of operations, derived from our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and presented in thousands of U.S. Dollars, for the three months ended September 30, 2022 and 2021.

|  | Three months ended September 30, 2022 | 2021 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| **Operating income** | **$2,074** | **$1,323** | **751** | **57%** |
| **Operating expenses** |  |  |  |  |
| Research and development expenses | (15,096) | (16,320) | 1,224 | (8%) |
| Sales and marketing expenses | (159) | (1,072) | 913 | (85%) |
| General and administrative expenses | (4,839) | (8,299) | 3,460 | (42%) |
| **Total Operating expenses** | (20,094) | (25,691) | 5,597 | (22%) |
| Financial income | 732 | 336 | 396 | 118% |
| Income tax | — | — | — | — |
| **Net loss** | **$(17,287)** | **$(24,033)** | **6,745** | **(28%)** |
| Basic/diluted Net loss per share attributable to shareholders | **$(0.18)** | **$(0.44)** |  |  |

#### Operating Income

The following table summarizes our operating income during the three months ended September 30, 2022 and 2021:

|  | Three months ended September 30, 2022 | 2021 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| Sales | — | — | — | — |
| Other income | 2,074 | 1,323 | 751 | 57% |
| Research tax credit | 1,407 | 1,647 | (240) | (15%) |
| Other operating income | 668 | (324) | 992 | (306%) |
| **Total operating income** | **2,074** | **1,323** | **751** | **57%** |

Our operating income is primarily generated from the French research tax credit (*Crédit d’Iimpôt Recherche*, or “CIR”), and by the revenue recognized under our collaboration agreement with Nestlé Health Science. We generated operating income of $2.1 million during the three months ended September 30, 2022 compared to $ 1.3 million during the three months ended September 30, 2021. The increase in operating income is primarily attributable to the revenue recognized under the Nestlé’s collaboration agreement, as we updated the measurement of progress of the Phase II clinical trial conducted as part of the agreement. During the three months ended September 30, 2021 negative revenue was recognized under the Nestlé’s collaboration agreement due to delays in new patient enrollment. The decrease in research tax credit is attributable to the decrease in eligible costs in connection with Research and Development costs.

#### Research and Development Expenses

The following table summarizes our research and development expenses incurred during the three months ended September 30, 2022 and 2021:

| Research and Development expenses | Three Months Ended September 30, 2022 | 2021 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| External clinical-related expenses | 11,136 | 8,633 | 2,503 | 29% |
| Employee-related costs | 2,648 | 3,228 | (581) | (18%) |
| Share-based payment expenses | 538 | 933 | (395) | (42%) |
| Depreciation, amortization and other costs | 774 | 3,526 | (2,752) | (78%) |
| **Total Research and Development expenses** | **15,096** | **16,320** | **(1,224)** | **(8%)** |

Research and Development expenses decreased by $1.2 million for the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to a decrease in depreciation, amortization and following the loss at completion recorded on the Phase II clinical trial conducted as part of the Nestlé agreement for the three months ended September 30, 2021. The increase in external clinical-related expenses is driven by the launch of work on VITESSE protocol. We have also continued to practice financial discipline and implemented further cost containment strategies.

Employee-related costs, excluding share-based payment expenses, decreased by $1.0 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 mostly due to EUR/USD exchange variation and workforce reduction.

#### Sales and Marketing expenses

The following table summarizes our sales and marketing expenses incurred during the three months ended September 30, 2022 and 2021:

| Sales and Marketing expenses | Three Months Ended September 30, 2022 | 2021 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| Personnel expenses | 138 | 492 | (354) | (72%) |
| External professional services and other costs | 20 | 580 | (559) | (96%) |
| **Total Sales and Marketing expenses** | **159** | **1,072** | **(913)** | **(85%)** |

Sales and marketing expenses amounted to $0.2 million for the three months ended September 30, 2022, compared to $1.1 million for the three months ended September 30, 2021.

Employee-related costs decreased by $0.3 million for the three months ended September 30, 2022, compared to the three months ended September 30, 2021 due to the workforce reduction following full implementation of the new organization.

#### General and Administrative expenses

The following table summarizes our general and administrative expenses incurred during the three months ended September 30, 2022 and 2021:

| General and Administrative expenses | Three Months Ended September 30, 2022 | 2021 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| External professional services | 1,292 | 2,216 | (924) | (42%) |
| Employee-related costs | 1,110 | 2,052 | (942) | (46%) |
| Share-based payment expenses | 488 | 530 | (42) | (8%) |
| Depreciation, amortization and other costs | 1,949 | 3,501 | (1,552) | (44%) |
| **Total General and Administrative expenses** | **4,839** | **8,299** | **(3,460)** | **(42%)** |

General and Administrative expenses decreased by $3.5 million for the three months ended September 30, 2022, compared to the three months ended September 30, 2021 primarily due to a decrease in depreciation, amortization and other costs as we continued to practice financial discipline and implemented further cost containment strategies.

#### Financial income (expense)

Our financial income was approximately $0.7 million for the three months ended September 30, 2022, compared to a financial income of $0.3 million for the three months ended September 30, 2021. This item mainly includes foreign exchange income.

#### Income tax

We did not have any income tax profit or expense for the three months ended September 30, 2022 nor 2021.

#### Net loss

Net loss was $17.3 million for the three months ended September 30, 2022, compared to $24.0 million for the three months ended September 30, 2021. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.18 and $0.44 for the three months ended September 30, 2022 and 2021, respectively.

### Business trends and Results of Operations

#### Comparison of the Nine Months Ended September 30, 2022 and 2021

The following table summarizes our results of operations, derived from our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and presented in thousands of U.S. Dollars, for the nine months ended September 30, 2022 and 2021.

|  | Nine months ended September 30, 2022 | 2021 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| **Operating income** | **$6,148** | **$2,776** | **3,373** | **122%** |
| **Operating expenses** |  |  |  |  |
| Research and development expenses | (45,930) | (58,663) | 12,733 | (22)% |
| Sales and marketing expenses | (1,659) | (2,999) | 1,340 | (45)% |
| General and administrative expenses | (17,173) | (26,250) | 9,077 | (35)% |
| **Total Operating expenses** | (64,762) | (87,912) | 23,150 | (26)% |
| Financial income | 1,668 | 597 | 1,071 | 179% |
| Income tax (expense) | (87) | 404 | (491) | (122)% |
| **Net loss** | **$(57,033)** | **$(84,136)** | **27,103** | **(32)%** |
| **Basic/diluted Net loss per share attributable to shareholders** | **$(0.79)** | **$(1.53)** |  |  |

#### Operating Income

The following table summarizes our operating income during the nine months ended September 30, 2022 and 2021:

|  | Nine months ended September 30, 2022 | 2021 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| Sales | — | — |  |  |
| Other income | 6,148 | 2,776 | 3,373 | 122% |
| Research tax credit | 4,467 | 5,324 | (857) | (16%) |
| Other operating income | 1,681 | (2,549) | 4,230 | (166%) |
| **Total operating income** | **6,148** | **2,776** | **3,373** | **122%** |

Our operating income was primarily generated from the French research tax credit (*Crédit d’Impôt Recherche* or “CIR”) and from revenue recognized under our collaboration agreement with Nestlé Health Science. We generated operating income of $6.1 million during the nine months ended September 30, 2022, compared to $2.8 million during the nine months ended September 30, 2021.

The increase in operating income is primarily attributable to the revenue recognized under the Nestlé’s collaboration agreement, as we updated the measurement of progress of the Phase II clinical trial conducted as part of the agreement. During the nine months ended September 30, 2021 negative revenue was recognized under the Nestlé’s collaboration agreement due to delays in new patient enrollment. The decrease in research tax credit is attributable to the decline in eligible expenses in connection with Research and Development costs.

#### Research and Development Expenses

The following table summarizes our research and development expenses incurred during the nine months ended September 30, 2022 and 2021:

| Research and Development expenses | Nine Months Ended September 30, 2022 | 2021 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| External clinical-related expenses | 30,150 | 31,319 | (1,169) | (4%) |
| Employee-related costs | 7,761 | 10,525 | (2,764) | (26%) |
| Share-based payment expenses | 1,596 | 1,747 | (151) | (9%) |
| Depreciation, amortization and other costs | 6,423 | 15,072 | (8,649) | (57%) |
| **Total Research and Development expenses** | **45,930** | **58,663** | **(12,733)** | **(22%)** |

Research and Development expenses decreased by $12.7 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 primarily due to a decrease in external clinical-related expenses as main component of the work on clinical studies such as REALISE and EPITOPE has been finalized during the year 2021. We have also continued to practice financial discipline and implemented further cost containment strategies.

Employee-related costs, excluding share-based payments expenses, decreased by $2.8 million for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021 due to the workforce reduction following full implementation of the new organization.

The decrease in depreciation, amortization and other costs was primarily due to the loss at completion recorded on the Phase II clinical trial conducted as part of Nestlé agreement.

#### Sales and Marketing expenses

The following table summarizes our sales and marketing expenses incurred during the nine months ended September 30, 2022 and 2021:

| Sales and Marketing expenses | Nine Months Ended September 30, 2022 | 2021 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| Personnel expenses | 727 | 1,528 | (801) | (52%) |
| External professional services and other costs | 932 | 1,471 | (538) | (37%) |
| **Total Sales and Marketing expenses** | **1,659** | **2,999** | **(1,340)** | **(45%)** |

Sales and marketing expenses decreased by $1.3 million for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to a decrease in employee-related costs.

Personnel expenses, decreased by $0.8 million for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021 due to the workforce reduction following full implementation of the new organization.

#### General and Administrative expenses

The following table summarizes our general and administrative expenses incurred during the nine months ended September 30, 2022 and 2021:

| General and Administrative expenses | Nine Months Ended September 30, 2022 | 2021 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| External professional services | 4,171 | 6,425 | (2,255) | (35%) |
| Employee-related costs | 5,139 | 7,263 | (2,124) | (29%) |
| Share-based payment expenses | 1,822 | 2,084 | (263) | (13%) |
| Depreciation, amortization and other costs | 6,042 | 10,478 | (4,436) | (42%) |
| **Total General and Administrative expenses** | **17,173** | **26,250** | **(9,077)** | **(35%)** |

28

General and Administrative expenses decreased by $9.1 million for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to a decrease of depreciation, amortization and other costs. We have continued to practice financial discipline and implemented further cost containment strategies.

The decrease in employee-related costs, excluding share-based payment expenses, is directly related to the workforce reduction following full implementation of the new organization.

#### Financial income (expense)

Our financial income was $1.7 million for the nine months ended September 30, 2022, compared to a financial income of $0.6 million for the nine months ended September 30, 2021. This item mainly includes foreign exchange income (expense).

#### Income tax

Our income tax expense was $87,000 for the nine months ended September 30, 2022, compared to a US Tax income of $404,000 for the nine months ended September 30, 2021.

#### Net loss

Net loss was $57.0 million for the nine months ended September 30, 2022, compared to $84.1 million for the nine months ended September 30, 2021. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.79 and $1.53 for the nine months ended September 30, 2022 and 2021, respectively.

### Liquidity and Capital Resources

### Financial Condition

On September 30, 2022, we had $212.7 million in cash and cash equivalents compared to $77.3 million of cash and cash equivalents on December 31, 2021. We have incurred operating losses and negative cash flows from operations since our inception. Net cash used for operating activities was $31.8 and $89.5 million for the nine months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022, we recorded a net loss of $57 million. Our net cash flows provided by financing activities increased to $194.4 million during the nine months ended September 30, 2022 from $(0.1) million during the nine months ended September 30, 2021. Financing activities consisted mainly of our global offering in the second quarter of 2022.

We may seek to finance our future cash needs through a combination of public or private equity or debt financings, collaborations, license and development agreements and other forms of non-dilutive financings. A severe or prolonged economic downturn could result in a variety of risks to us, including reduced ability to raise additional capital when needed or on acceptable terms, if at all.

If we are not successful in our financing objectives, we could have to scale back our operations, notably by delaying or reducing the scope of our research and development efforts or obtain financing through arrangements with collaborators or others that may require us to relinquish rights to our product candidates that we might otherwise seek to develop or commercialize independently.

Our financial statements have been prepared on a going concern basis assuming that we will be successful in our financing objectives. As such, no adjustments have been made to the financial statements relating to the recoverability and classification of the asset carrying amounts or classification of liabilities that might be necessary should we not be able to continue as a going concern.

### Sources of Liquidity and Material Cash Requirements

We have incurred net losses each year since our inception. Substantially all of our net losses resulted from costs incurred in connection with our development programs and from general and administrative expenses associated with our operations. We have not incurred any bank debt.

As of the date of the filing, our available cash is projected to be sufficient to support our operating plan for at least the next 12 months.

In May 2022, the Company announced that pursuant to the Company’s ATM program, it had issued and completed sales of new Ordinary Shares in the form of ADSs, for a total gross amount of $15.3 million.

In June 2022, the Company announced an aggregate $194 million PIPE financing (corresponding to €181 million on the basis of an exchange rate of $1.0739 = €1.00 published by the European Central Bank on June 8, 2022) from the sale of 32,855,669 Ordinary Shares, as well as pre-funded warrants to purchase up to 28,276,331 Ordinary Shares.

We cannot guarantee that we will be able to obtain the necessary financing to meet our needs or to obtain funds at attractive terms and conditions, including as a result of disruptions to the global financial markets due to the ongoing COVID-19 pandemic. A severe or prolonged economic downturn could result in a variety of risks to us, including reduced ability to raise additional capital when needed or on acceptable terms, if at all.

The following table presents our material cash requirements for future periods:

*(Amounts in thousands)*

|  | Material Cash Requirements Due by the period Ended September 30, 2023 | 2024 | 2025 | Thereafter | Total |
| --- | ---: | ---: | ---: | ---: | ---: |
| Operating leases | 1,381 | 1,423 | — | — | 2,804 |
| Purchase obligations - Obligations Under the Terms of CRO Agreements | 12,411 | 36,234 | 7,805 | — | 56,450 |
| **Total** | 13,791 | 37,657 | 7,805 | — | 59,254 |

The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including interest on long-term debt, fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty.

Future events could cause actual payments to differ from these estimates.

### Conditional advances

In 2014, BpiFrance Financement granted an interest-free Innovation loan to DBV Technologies to help finance the pharmaceutical development of Viaskin™ Milk. This amount was received in a single disbursement on November 27, 2014. In 2020, due to the COVID-19 pandemic, Bpifrance postponed the repayments for a 6-month period. Repayment ended during the third quarter of 2022.

### Operating leases

Our corporate headquarters are located in Montrouge, France. Our principal offices occupy a 4,470 square meter facility, pursuant to a lease agreement dated March 3, 2015 and represents a $3 million cash requirement as of September 30, 2022 which expires March 8, 2024.

We also have facilities in North America that were initially intended to support our U.S. subsidiary as well as future commercialization needs. We lease 3,780 square feet of office space in Tower 49, New York, New York. This lease is for a period of 65 months and expires on February 25, 2023. In light of our global restructuring, the current stage of regulatory interactions regarding Viaskin Peanut, and the ongoing COVID-19 pandemic, we entered into a sublease agreement of this office space in June 2021. The NYC office represents a $0.2 million cash requirement as of September 30, 2022 until the first quarter of 2023.

On March 28, 2022, the Company entered into a binding office lease agreement in New Jersey for a lease term of 3 years and 2 months. The lease commencement was based upon delivery of possession of the premises by the Landlord and occurred on April 1, 2022. The principal offices occupy a 5,799 square meter facility, and represents a $0.4 million cash requirement as of September 30, 2022 which expires May 1, 2025.

### Purchase obligations - Obligations Under the Terms of CRO Agreements

In connection with the launch of our clinical trials for Viaskin Peanut and Viaskin Milk, we signed agreements with several contract research organizations. Expenses associated with the ongoing trials amounted globally to $125.9 million. As of September 30, 2022, the amount we are still obligated to pay in connection with these contracts through 2025 is $56.4 million.

### Summary Statement of Cash Flows

The table below summarizes our sources and uses of cash for the nine months ended September 30, 2022 and 2021.

*(Amounts in thousands of U.S. Dollars)*

|  | Nine months ended September 30, 2022 | 2021 | $ change | % of change |
| --- | ---: | ---: | ---: | ---: |
| Net cash flow used in operating activities | (31,781) | (89,452) | 57,671 | (64%) |
| Net cash flow used in investing activities | (66) | 41 | (107) | (262%) |
| Net cash flow provided by financing activities | 194,403 | (103) | 194,506 | \* |
| Effect of exchange rate changes on cash and cash equivalents | (27,186) | (8,643) | (18,543) | 215% |
| **Net (decrease) increase in cash and cash equivalents** | **135,369** | **(98,157)** | **233,527** | **(238%)** |

\* Percentage not meaningful

### Operating Activities

Our net cash flows used in operating activities were $31.8 million and $89.5 million during the nine months ended September 30, 2022 and 2021, respectively. During the nine months period ended September 30, 2022, we received $21.1 million of research tax credit’s reimbursement for the 2019, 2020 and 2021 fiscal year. Excluding research tax credit reimbursement, our net cash flows used in operating activities decreased by $31.3 million, or 35%, mainly due to cost containment measures and to the workforce reduction following full implementation of the new organization. Cash flows used in operating activities for the nine months ended September 30, 2021 included restructuring costs paid for $0.7 million.

### Financing Activities

Our net cash flows provided by financing activities increased to $194.4 million during the nine months ended September 30, 2022 from $103,000 during the nine months ended September 30, 2021. Financing activities consisted mainly of our global offering in the second quarter of 2022.

### Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements and do not have variable interests in variable interest entities.

### Smaller Reporting Company Status

We are a smaller reporting company as defined in the Securities Exchange Act of 1934, as amended. We may, and intend to, take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as we are a smaller reporting company. We may be a smaller reporting company in any year in which (i) the market value of our voting and non-voting ordinary shares held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter or (ii) (a) our annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of our voting and non-voting ordinary shares held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

## Controls and procedures

As filed, 2,835 characters.

### Disclosure Controls and Procedures

Based on its evaluation as of September 30, 2022, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective to provide reasonable assurance that (i) the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (ii) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

### Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Limitation on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A 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. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies and procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error of fraud may occur and not be detected.

## Risk factors

As filed, 3,270 characters.

Except as set forth below, there have been no material changes in our risk factors from those disclosed in the Annual Report.

***Future sales of ordinary shares or ADSs by existing shareholders could depress the market price of the ADSs.***

As of December 31, 2021, 55,095,762 Ordinary Shares were issued and outstanding. Sales of a substantial number of shares of our Ordinary Shares or ADSs in the public market, or the perception that these sales might occur, could depress the market price of our securities and could impair our ability to raise capital through the sale of additional equity securities. A substantial number of our shares are now generally freely tradable, subject, in the case of sales by our affiliates, to the volume limitations and other provisions of Rule 144 under the Securities Act. If holders of these shares sell, or indicate an intent to sell, substantial amounts of our securities in the public market, the trading price of our securities could decline significantly.

In June 2022, we completed a $194 million PIPE financing from the sale of (i) 32,855,669 Ordinary Shares, nominal value €0.10 per share at a price per Ordinary Share of €3.00 (corresponding to $3.22 on the basis of an exchange rate of $1.0739 = €1.00 published by the European Central Bank on June 8, 2022), and (ii) pre-funded warrants to purchase an aggregate of 28,276,331 Ordinary Shares (the “Warrant Shares”) at a pre-funded price per pre-funded warrant of €2.90 (corresponding to $3.11), which equals the per share price of the Ordinary Shares less the exercise price of €0.10 per pre-funded warrant. Each pre-funded warrant has an exercise price of €0.10 per Warrant Share. Pursuant to a registration rights agreement (the “Registration Rights Agreement”) with the investors, the Company filed a registration statement with the SEC registering the resale of 59,269,629 ordinary shares issued in the PIPE financing, including ordinary shares underlying the pre-funded warrants. The Company also filed a registration statement with the SEC registering the resale of 11,593,170 ordinary shares by Entities affiliated with Baker Bros. Advisors, issued in the PIPE financing, including ordinary shares underlying the pre-funded warrants. As a result, subject to certain beneficial ownership limitations contained in the pre-funded warrants, these shares are freely tradable, without restriction, in the public market. In addition, the exercise of some or all of the pre-funded warrants will increase the number of our outstanding ordinary shares, which may dilute the ownership percentage or voting power of our shareholders.

In addition, we have filed a registration statement with the SEC to register the Ordinary Shares that may be issued under our equity incentive plans. The Ordinary Shares subject to outstanding options under our equity incentive plans, Ordinary Shares reserved for future issuance under our equity incentive plans and Ordinary Shares subject to outstanding warrants will become eligible for sale in the public market in the future, subject to certain legal and contractual limitations. Sales of a large number of the shares issued under these plans in the public market could have an adverse effect on the market price of our securities.

Filed Nov 3, 2022.
Source: SEC EDGAR, the filing index for accession 0001193125-22-277052. Last ingested by Listed: Oct 29, 2026, 05:16 ET. No prices; not investment advice.