# DBV Technologies S.A.: Form 10-Q for the period ended Jun 30, 2023

- Company: [DBV Technologies S.A.](/companies/dbvt.md) (CIK 1613780)
- Form: 10-Q
- Filed: 2023-07-31
- Accepted by EDGAR: Jul 31, 2023, 16:36 ET
- Period: 2023-06-30
- Accession: 0001193125-23-199175
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1613780/000119312523199175/d515836d10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1613780/000119312523199175/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-04-01 to 2023-06-30 | $2.3m | us-gaap:Revenues |
| Revenue | 6 months, 2023-01-01 to 2023-06-30 | $4.5m | us-gaap:Revenues |
| Research and development | 3 months, 2023-04-01 to 2023-06-30 | $17.6m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2023-01-01 to 2023-06-30 | $33.7m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2023-04-01 to 2023-06-30 | −$25.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2023-01-01 to 2023-06-30 | −$46.2m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2023-04-01 to 2023-06-30 | $13.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2023-01-01 to 2023-06-30 | $13.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-04-01 to 2023-06-30 | −$24.2m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-01-01 to 2023-06-30 | −$44.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-04-01 to 2023-06-30 | −$0.26 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2023-01-01 to 2023-06-30 | −$0.48 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-04-01 to 2023-06-30 | −$0.26 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-01-01 to 2023-06-30 | −$0.48 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-04-01 to 2023-06-30 | 94,324,889 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2023-01-01 to 2023-06-30 | 94,150,141 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2023-01-01 to 2023-06-30 | −$46.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2023-01-01 to 2023-06-30 | $275.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2023-06-30 | $174.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-06-30 | $195.5m | us-gaap:AssetsCurrent |
| Total assets | at 2023-06-30 | $217.5m | us-gaap:Assets |
| Current liabilities | at 2023-06-30 | $33.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-06-30 | $53.3m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-06-30 | $164.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 29,167 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, 2022, included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 2, 2023, 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, an epicutaneous patch (i.e., a skin patch). We have generated significant data demonstrating that Viaskin’s mechanism of action is novel and differentiated, Viaskin 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 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, if approved.

Our most advanced clinical program is Viaskin Peanut, which has been evaluated as a potential therapy for children with peanut allergy in nine clinical trials, including four Phase 2 trials and three completed Phase 3 trials. We recently completed a Phase 3 trial of Viaskin Peanut in children ages one to three with peanut allergy and we also have an ongoing Phase 3 trial of Viaskin Peanut in children ages four to seven with peanut allergy.

On March 7, 2023, the Company announced screening of the first patient in VITESSE. Screening of the last patient is anticipated in the first half in 2024 and topline results in the first half in 2025.

On April 19, 2023, the Company outlined the regulatory path for Viaskin Peanut in children 1-3 years old after the FDA confirmed that the Company’s Phase 3 EPITOPE study meets the pre-specified criteria for success for the primary endpoint, not requesting any additional efficacy study. The FDA requires additional safety data to augment the safety data collected from EPITOPE in support of a BLA. This new safety study will also generate patch adhesion data and will include updated instructions for use.

On May 10, 2023, the New England Journal of Medicine (NEJM) published results that demonstrated epicutaneous immunotherapy (EPIT) with VP was statistically superior to placebo in desensitizing children to peanut exposure by increasing the peanut dose that triggers allergic symptoms. As stated in an accompanying editorial piece, these data are seen as “very good news” for toddlers with peanut allergy, as there are currently no approved treatment options for peanut-allergic children under the age of 4 years. Following this publication, the Company confirmed it is advancing regulatory efforts for VP in toddlers ages 1-3 years old with a confirmed peanut allergy.

### 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 unaudited 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 unaudited 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 unaudited 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 June 30, 2023 and 2022

The following table summarizes our results of operations, derived from our unaudited 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 June 30, 2023 and 2022.

|  | Three months ended June 30, 2023 | 2022 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| **Operating income** | **$2,288** | **$1,529** | 759 | **50%** |
| **Operating expenses** |  |  |  |  |
| Research and development expenses | (17,616) | (18,611) | 995 | (5)% |
| Sales and marketing expenses | (516) | (1,037) | 520 | (50)% |
| General and administrative expenses | (9,231) | (5,704) | (3,527) | 62% |
| **Total Operating expenses** | **(27,364)** | **(25,352)** | **(2,012)** | **8%** |
| Financial income (expenses) | 846 | 784 | 62 | 8% |
| Income tax | (13) | — | (13) | — |
| **Net loss** | **$(24,243)** | **$(23,039)** | (1,204) | **5%** |
| Basic/diluted Net loss per share attributable to shareholders | **$(0.26)** | **$(0.35)** |  |  |

### Operating Income

The following table summarizes our operating income during the three months ended June 30, 2023 and 2022:

|  | Three months ended June 30, 2023 | 2022 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| Sales | — | — | — | — |
| Other income | 2,288 | 1,529 | 759 | 50% |
| Research tax credit | 1,975 | 1,491 | 484 | 32% |
| Other operating income | 312 | 37 | 275 | 734% |
| **Total operating income** | **2,288** | **1,529** | **759** | **50%** |

Our operating income is primarily generated from the French research tax credit (*Crédit d’Impôt Recherche*, or “CIR”), and revenues recognized as part of our collaboration agreement with Nestlé Health Science. We generated operating income of $2.3 million during the three months ended June 30, 2023 compared to $1.5 million during the three months ended June 30, 2022.

The increase in operating income was primarily due to the increase by $0.5 million in French research tax credit as the eligible employee-related costs increased to support research and development activities (1) after the initiation of the VITESSE trial with the first patient screened in March 2023, and (2) as part of the new safety study for toddlers after the FDA confirmed additional safety data is required for BLA.

In addition, other operating income increased by $0.3 million for the three months ended June 30, 2023, compared to the three months ended June 30, 2022, after we updated the measurement of progress of the Phase 2 clinical trial conducted as part of the Nestlé’s collaboration agreement.

### Operating Expenses

#### Research and Development Expenses

The following table summarizes our research and development expenses incurred during the three months ended June 30, 2023 and 2022:

| Research and Development expenses | Three Months Ended June 30, 2023 | 2022 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| External clinical-related expenses | 11,421 | 11,664 | (243) | (2)% |
| Employee-related costs (excl. share-based payments) | 3,278 | 2,622 | 656 | 25% |
| Share-based payment expenses | 736 | 475 | 261 | 55% |
| Depreciation, amortization and other costs | 2,181 | 3,850 | (1,669) | (43)% |
| **Total Research and Development expenses** | **17,616** | **18,611** | **(995)** | **50%** |

Research and Development expenses decreased by $1.0 million for the three months ended June 30, 2023, compared to the three months ended June 30, 2022, primarily due to the reversal of $1.1 million of the loss at completion recorded as other costs on the Phase 2 clinical trial conducted as part of the collaboration agreement with Nestlé. During the three months ended June 30, 2022, the loss at completion was impacted by additional clinical and production costs following increasing timing to achieve upcoming milestones. During the three months ended June 30, 2023, there were no changes to the timing to completion.

In addition external clinical expenses decreased by $0.2 million as a result of differences in phasing of on-going clinical trials between the three months ended June 30, 2022 and the three months ended June 30, 2023.

Decreases in impacts of the loss at completion and in external clinical-related expenses were partially offset by the increase by $0.7 million in employee-related costs (excl. share-based payments) to support research and development activities (1) after the initiation of the VITESSE trial with the first patient screened in March 2023, and (2) as part of the new safety study for toddlers after the FDA confirmed additional safety data is required for BLA.

#### Sales and Marketing expenses

The following table summarizes our sales and marketing expenses incurred during the three months ended June 30, 2023 and 2022:

| Sales and Marketing expenses | Three Months Ended June 30, 2023 | 2022 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| External professional services | 80 | 399 | (319) | (80)% |
| Employee-related costs (excl. share-based payments) | 173 | 289 | (116) | (40)% |
| Share-based payment expenses | 35 | 55 | (20) | (36)% |
| Depreciation, amortization and other costs | 229 | 294 | (65) | (22)% |
| **Total Sales and Marketing expenses** | **516** | **1,037** | **(520)** | **(50)%** |

Sales and marketing expenses decreased by $0.5 million for the three months ended June 30, 2023, compared to the three months ended June 30, 2022, due to a decrease of external professional services and employee-related costs.

#### General and Administrative expenses

The following table summarizes our general and administrative expenses incurred during the three months ended June 30, 2023 and 2022:

| General and Administrative expenses | Three Months Ended June 30, 2023 | 2022 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| External professional services | 3,806 | 1,771 | 2,034 | 115% |
| Employee-related costs (excl. share-based payments) | 1,814 | 2,220 | (405) | (18)% |
| Share-based payment expenses | 1,043 | 548 | 496 | 91% |
| Depreciation, amortization and other costs | 2,568 | 1,166 | 1,402 | 120% |
| **Total General and Administrative expenses** | **9,231** | **5,704** | **3,527** | **62%** |

General and Administrative expenses increased by $3.5 million for the three months ended June 30, 2023, compared to the three months ended June 30, 2022, mainly due to one-time costs associated with financing activities, organizational planning, market research and planning activities. In addition, we recorded a provision amounting to $0.7 million as of June 30, 2023, as our best estimate of costs to be incurred if the Montrouge office lease agreement is not renewed at its July 2024 terms.

#### Financial income (expense)

Our financial income was $0.8 million for the three months ended June 30, 2023, compared to a financial income of $0.8 million for the three months ended June 30, 2022. This item mainly includes the financial income on our financial assets.

#### Income tax

Our income tax expense was nil for the three months ended June 30, 2023 and June 30, 2022.

#### Net loss

Net loss was $24.2 million for the three months ended June 30, 2023, compared to $23 million for the three months ended June 30, 2022. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.26 and $0.35 for the three months ended June 30, 2023 and 2022, respectively.

### Comparison of the Six Months Ended June 30, 2023 and 2022

The following table summarizes our results of operations, derived from our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and presented in thousands of U.S. Dollars, for the six months ended June 30, 2023 and 2022.

|  | Six months ended June 30, 2023 | 2022 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| **Operating income** | **$4,482** | **$4,074** | 407 | **10%** |
| **Operating expenses** |  |  |  |  |
| Research and development expenses | (33,653) | (30,834) | (2,819) | 9% |
| Sales and marketing expenses | (950) | (1,500) | 551 | (37)% |
| General and administrative expenses | (16,120) | (12,334) | (3,786) | 31% |
| **Total Operating expenses** | (50,723) | (44,669) | (6,054) | 14% |
| Financial income (expense) | 1,450 | 936 | 515 | 55% |
| Income tax | (13) | (87) | 74 | (85)% |
| **Net loss** | **$(44,804)** | **$(39,746)** | (5,058) | **13%** |
| **Basic/diluted Net loss per share attributable to shareholders** | **$(0.48)** | **$(0.66)** |  |  |

### Operating Income

The following table summarizes our operating income during the six months ended June 30, 2023 and 2022:

|  | Six months ended June 30, 2023 | 2022 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| Sales | — | — |  |  |
| Other income | 4,482 | 4,074 | 407 | 10% |
| Research tax credit | 3,741 | 3,060 | 680 | 22% |
| Other operating income | 741 | 1,014 | (273) | (27)% |
| **Total operating income** | **4,482** | **4,074** | **407** | **10%** |

Our operating income consisted of the French research tax credit (*Crédit d’Impôt Recherche*, or “CIR”), and revenues recognized as part of our collaboration agreement with Nestlé Health Science. We generated operating income of $4.5 million during the six months ended June 30, 2023 compared to $4.1 million during the six months ended June 30, 2022.

The increase in operating income was due to the increase by $0.7 million in the French research tax credit as both eligible employee-related costs and eligible external clinical-related expenses increased to support research and development activities (1) after the initiation of the VITESSE trial with the first patient screened in March 2023, and (2) as part of the new safety study for toddlers after the FDA confirmed additional safety data is required for BLA.

The increase in research tax credit was partially offset by the decrease by $0.3 million in other operating income for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, after we updated the measurement of progress of the Phase 2 clinical trial conducted as part of the Nestlé’s collaboration agreement.

### Operating Expenses

#### Research and Development Expenses

The following table summarizes our R&D expenses incurred during the six months ended June 30, 2023 and 2022:

| Research and Development expenses | Six Months Ended June 30, 2023 | 2022 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| External clinical-related expenses | 21,892 | 19,014 | 2,878 | 15% |
| Employee-related costs (excl. share-based payments) | 6,598 | 5,114 | 1,484 | 29% |
| Share-based payment expenses | 1,423 | 1,058 | 365 | 34% |
| Depreciation, amortization and other costs | 3,741 | 5,648 | (1,908) | (34)% |
| **Total Research and Development expenses** | **33,653** | **30,834** | **2,819** | **9%** |

Research and Development expenses increased by $2.8 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, primarily due to the increase by $2.9 million and by $1.5 million in external clinical-related expenses and in employee-related costs (excl. share-based payments) respectively, to support research and development activities (1) after the initiation of the VITESSE trial with the first patient screened in March 2023, and (2) as part of the new safety study for toddlers after the FDA confirmed additional safety data is required for BLA.

Increases in both external clinical-related expenses and employee-related costs were partially offset by the reversal of $1.1 million of the loss at completion recorded as other costs on the Phase 2 clinical trial conducted as part of the collaboration agreement with Nestlé. During the six months ended June 30, 2022, the loss at completion was impacted by additional clinical and production costs following increasing timing to achieve upcoming milestones. During the six months ended June 30, 2023, there were no changes to the timing to completion.

#### Sales and Marketing expenses

The following table summarizes our sales and marketing expenses incurred during the six months ended June 30, 2023 and 2022:

| Sales and Marketing expenses | Six Months Ended June 30, 2023 | 2022 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| External professional services | 348 | 521 | (173) | (33)% |
| Employee-related costs (excl. share-based payments) | 303 | 539 | (237) | (44)% |
| Share-based payment expenses | 70 | 49 | 21 | 41% |
| Depreciation, amortization and other costs | 229 | 391 | (162) | (41)% |
| **Total Sales and Marketing expenses** | **950** | **1,500** | **(551)** | **(37)%** |

Sales and marketing expenses decreased by $ 0.6 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, primarily due to a decrease of external professional services and employee-related costs.

#### General and Administrative expenses

The following table summarizes our general and administrative expenses incurred during the six months ended June 30, 2023 and 2022:

| General and Administrative expenses | Six Months Ended June 30, 2023 | 2022 | $ change | % change |
| --- | ---: | ---: | ---: | ---: |
| External professional services | 5,512 | 2,879 | 2,633 | 91% |
| Employee-related costs (excl. share-based payments) | 4,005 | 4,029 | (25) | (1)% |
| Share-based payment expenses | 1,954 | 1,333 | 620 | 47% |
| Depreciation, amortization and other costs | 4,650 | 4,093 | 557 | 14% |
| **Total General and Administrative expenses** | **16,120** | **12,334** | **3,786** | **31%** |

21

General and Administrative expenses increased by $3.8 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, mainly due to one-time costs associated with financing activities, organizational planning, market research and planning activities. In addition, we recorded a provision amounting to $0.7 million as of June 30, 2023, as our best estimate of costs to be incurred if the Montrouge office lease agreement is not renewed at its July 2024 terms.

#### Financial income (expense)

Our financial income was $1.5 million for the six months ended June 30, 2023, compared to a financial income of $0.9 million for the six months ended June 30, 2022. This item mainly includes financial income on our financial assets.

#### Income tax

Our income tax expense was nil for the six months ended June 30, 2023 and June 30, 2022.

#### Net loss

Net loss was $ 44.8 million for the six months ended June 30, 2023, compared to $39.7 million for the six months ended June 30, 2022. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.48 and $0.66 for the six months ended June 30, 2023 and 2022, respectively.

### Liquidity and Capital Resources

### Financial Condition

On June 30, 2023, we had $174 million in cash and cash equivalents compared to $209.2 million of cash and cash equivalents on December 31, 2022. We have incurred operating losses and negative cash flows from operations since our inception. Net cash used for operating activities was $ 46.4 million and $11.7 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, we recorded a net loss of $ 44.8 million. Our net cash flows provided by financing activities decreased to $7.8 million during the six months ended June 30, 2023 from $195.2 million during the six months ended June 30, 2022 due to more important financing operations in first semester of 2022 (May 2022 ATM and June 2022 PIPE) compared to 2023 (June 2023 ATM).

Our condensed consolidated financial statements have been prepared on a going concern basis assuming that based on our current operations, as well as our plans and assumptions, we expect that our balance of cash and cash equivalents at closing date will be sufficient to fund our operations for at least the next 12 months. As such, no adjustments have been made to the condensed consolidated 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.

Payments associated with Research tax credits (Crédit d’Impôt Recherche) contribute to fund our short-term cash requirements. We intend to seek additional capital as we prepare for the launch of Viaskin Peanut, if approved, and continue other research and development efforts. 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.

In May 2022, we established an At-The-Market (“ATM”) program to offer and sell, including with unsolicited investors who have expressed an interest, a total gross amount of up to $100 million of American Depositary Shares (“ADSs”), each ADS representing one-half of one ordinary share of the Company. The ATM program is intended to be effective through the expiration of the Company’s existing registration statement registering the ADSs to be issued under the ATM program, i.e. until July 16, 2024, unless terminated prior to such date in accordance with the sales agreement or the maximum amount of the program has been reached. The Company’s intent is to use the net proceeds, if any, of sales of ADSs issued under the program, together with its existing cash and cash equivalents, primarily for activities associated with potential approval and launch of Viaskin Peanut, as well as to advance the development of the Company’s product candidates using its Viaskin Peanut platform and for working capital and other general corporate purposes.

Pursuant to the ATM program, the Company issued and completed sales of new Ordinary Shares in the form of ADSs for a total gross amount of $15.3 million on May 4, 2022, and of $7.8 million on June 14, 2023. Respectively, 6,036,238 and 2,052,450 new Ordinary Shares in the form of ADSs were issued through a capital increase without preferential subscription rights of the shareholders reserved to specific categories of persons fulfilling certain characteristics (the “ATM issuance”), at a unit subscription price of $1.27 and $1.90 per ADS, each ADS giving the right to receive one-half of one ordinary share of the Company.

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. 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.

### 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 $0.8 million cash requirement as of June 30, 2023 which expires July 31, 2024.

Our primary U.S. office is located in Basking Ridge, New Jersey. In March 2022, we entered into a lease agreement, commencing on April 1, 2022 and effective for 38 months, for an office of 5,799 square feet in Basking Ridge, New Jersey. The Basking Ridge office represent a $0.1 million cash requirement as of June 30, 2023 which expires June 1, 2025.

There have been no material changes in our operating leases from those disclosed in the Annual Report.

### 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.

There have been no material changes in our purchase obligations from those disclosed in the Annual Report.

### Summary Statement of Cash Flows

The table below summarizes our sources and uses of cash for the six months ended June 30, 2023 and 2022.

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

|  | Six months ended June 30, 2023 | 2022 | $ change | % of change |
| --- | ---: | ---: | ---: | ---: |
| Net cash flow used in operating activities | (46,394) | (11,733) | (34,661) | 295% |
| Net cash flow used in investing activities | (299) | (218) | (80) | 37% |
| Net cash flow provided by financing activities | 7,793 | 195,222 | (187,429) | (96)% |
| Effect of exchange rate changes on cash and cash equivalents | 3,668 | (12,600) | 16,268 | (129)% |
| **Net (decrease) increase in cash and cash equivalents** | (35,232) | **170,670** | (205,903) | **(121)%** |

### Operating Activities

Our net cash flows used in operating activities were $46.4 million and $11.7 million during the six months ended June 30, 2023 and 2022, respectively. Our net cash flows used in operating activities increased by $ 34.7 million, mainly due to the repayment in 2022 of the research tax credit receivable relating to fiscal years 2019 to 2021 for €24.8 million (corresponding to $28.1 million on the basis of 2021 closing exchange rate). The increase is also explained by the change in trade payables during the six months period ended June 30, 2023 compared to the six months period ended June 30, 2022.

### Investing Activities

Our net cash flows used in investing activities were $0.3 million and $0.2 million during the six months ended June 30, 2023 and 2022, respectively.

### Financing Activities

Our net cash flows provided by financing activities was $ 7.8 million during the six months ended June 30, 2023 that consisted of the ATM in June 2023 compared to $195.2 million during the six months ended June 30, 2022, that consisted of the May 2022 ATM and the June 2022 PIPE.

### 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.

## Market risk

As filed, 153 characters.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

## Controls and procedures

As filed, 2,830 characters.

### Disclosure Controls and Procedures

Based on its evaluation as of June 30, 2023, 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, 455 characters.

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and trading price of our securities. In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors described in Part I, Item 1A. “Risk Factors” of our Annual Report. There have been no material changes in our risk factors from those disclosed in the Annual Report.

Filed Jul 31, 2023.
Source: SEC EDGAR, the filing index for accession 0001193125-23-199175. Last ingested by Listed: Oct 29, 2026, 05:16 ET. No prices; not investment advice.