DBV Technologies S.A.: Form 10-Q for the period ended Sep 30, 2024
Filed with the SEC on Nov 6, 2024 and accepted by EDGAR at Nov 6, 2024, 16:34 ET.
Management's discussion and analysis
As filed, 35,325 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
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, 2023, included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 7, 2024, 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 (EPIT) 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 specialized antigen-presenting immune cells in the skin, called Langerhans cells, that capture the antigen that accumulates in the outer layer of the skin, and then migrate to the skin-draining lymph nodes 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 product candidate is Viaskin Peanut, evaluated as a potential immunotherapy for children with peanut allergy in eleven clinical trials, including four Phase 2 trials and four completed Phase 3 trials. We are advancing two separate Viaskin Peanut product candidates in parallel to support two potential Biologics License Applications (BLAs) in two distinct age groups: one in toddlers ages one through three with the original (square) patch, and one in children ages four through seven with the modified (circular) patch.
Currently, we have an ongoing Phase 3 efficacy and safety trial (VITESSE) to evaluate the modified Viaskin Peanut patch in children ages four through seven with peanut allergy. On March 7, 2023, the Company announced that the first patient was screened in the VITESSE study. The Company announced on September 23, 2024 that subject screening was completed in the third quarter of 2024 and that topline results are anticipated by fourth quarter of 2025. We also have an ongoing Phase 3 open-label extension to the EPITOPE trial (our completed Phase 3 efficacy and safety trial conducted in peanut-allergic toddlers which met its clinical endpoints), with 3-year results anticipated later this year, as well as two planned Phase 3 supplementary safety studies, one in peanut-allergic children ages four through seven, and one in peanut-allergic toddlers, ages one through three. The Company submitted the protocol for its COMFORT Toddlers supplemental safety study in 1 – 3 years-old to the FDA on November 9, 2023. The Company received comments and queries to the protocol from the FDA on March 11, 2024.
On July 30, 2024, the Company announced that it and the FDA had been engaged in ongoing dialogue since May 2023 on the COMFORT Toddlers supplemental safety study in 1 – 3-years-old with a peanut allergy. The study protocol was submitted on November 9, 2023, with comments provided by FDA on March 11, 2024. Since March, much of the dialogue between DBV and FDA regarding the COMFORT Toddlers supplemental study had focused on patch wear-time experience, including how prescribers would advise parents and caregivers to manage day-to-day variability in patch wear time. The Company proposed an approach, informed by the EPITOPE efficacy data, that focuses on the user experience during the first 90-days of treatment. The Company submitted to the FDA draft labeling for Section 2 – Dosing and Administration, for a potential Viaskin Peanut Prescribing Information (PI), along with comprehensive supportive data and analyses. Within the first 90-days of treatment (excluding the lead-in dosing period) it is possible to identify those patients who are very likely to have a robust clinical efficacy response based on patch wear time experience (i.e., “Label-in” patients). The proposed PI recommends continuation of treatment for these patients. With the same 90-day approach, patients less likely to have a robust clinical efficacy response, identified by their patch wear-time experience, would be identified as “Label-out” patients. In these instances, the PI would recommend a shared decision-making process, between the health care provider and the parent or caregiver, to determine whether treatment should be discontinued.
On October 22, 2024, the Company announced positive regulatory updates for the Viaskin Peanut patch in the United States and Europe. The Company has agreed to guidance provided by the FDA on a potential pathway under the Accelerated Approval program for the Viaskin Peanut patch in toddlers ages 1 – 3 years-old.
FDA guidance for Accelerated Approval include three qualifying criteria: 1) that the product candidate treats a serious condition, 2) that the product candidate generally provides a meaningful advantage over available therapies, and 3) that the product candidate demonstrates an effect on an intermediate clinical endpoint that is reasonably likely to predict clinical benefit. FDA confirmed that DBV has met criterion 1 and 2. Regarding criterion 3, FDA has provided guidance and suggestion regarding the intermediate clinical endpoint, which DBV has agreed to in informal discussions with the FDA. The Company intends to formalize the Accelerated Approval guidance provided by FDA via submission of a meeting request to confirm the general elements of the two study components: the COMFORT Toddlers safety study, to be completed before BLA submission, and the confirmatory effectiveness study, including the third Accelerated Approval criterion regarding the intermediate clinical endpoint. DBV expects that the confirmatory study will be initiated by the time of BLA submission and would run in parallel to commercialization in the United States, if Viaskin Peanut is approved.
The Company announced further that it has aligned with FDA on a wear time collection methodology in COMFORT Toddlers that provides a practical approach for subjects and families, is intended to generate sufficient data to support a BLA submission, and places wear time into an acceptable clinical hierarchy relative to other study endpoints. DBV has initiated study start-up activities and plans to screen the first subject in the second quarter of 2025. The Company anticipates enrolling approximately 300 – 350 subjects on active treatment into the safety study, which would bring the total Viaskin Peanut patch safety database in toddlers to approximately 600 subjects, consistent with prior FDA guidance. With this path forward, the BLA submission for Viaskin Peanut patch in 1 – 3 years-old under the Accelerated Approval program is anticipated to be supported by:
i. Positive efficacy and safety data from DBV’s previously completed EPITOPE Phase 3 Study; and
ii. Additional safety data generated in COMFORT Toddlers supplemental safety study to be initiated in the second quarter of 2025.
The Company announced further that the COMFORT Children safety study is expected to be initiated in the second quarter of 2025. This study plans to enroll approximately 250 subjects to raise the total number of 4 – 7 years-old on active treatment across the development program to approximately 600, consistent with prior FDA guidance. The VITESSE phase 3 efficacy trial of the Viaskin Peanut patch in peanut allergic children ages 4 – 7 years-old and the COMFORT Children safety study will constitute the core studies for a BLA submission in 4 – 7 years-old.
The Company announced further that it sought scientific advice from the EMA regarding the components of a MAA for the Viaskin Peanut patch. Previous advice obtained from two local country regulatory health authorities indicated a potential path for a 1 – 7 year-old registration with one patch, the modified patch. The EMA recently confirmed through scientific advice that the completed EPITOPE study in 1 – 3 years-old, and a positive VITESSE study in 4 – 7 years-old, could constitute an MAA submission for a 1 – 7 year-old indication for peanut allergy patients using the modified patch, along with a new safety study in 1 – 3 years-old with the modified patch. Timing for the initiation of this new safety study to satisfy the important EU market is currently being planned.
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(“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 September 30, 2024 and 2023
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 September 30, 2024 and 2023.
| 2024 | Three Months Ended September 30, 2023 | $ change | % of change | |
|---|---|---|---|---|
| Operating income | 1,072 | 2,372 | (1,299) | (54.8)% |
| Operating expenses | ||||
| Research and development expenses | (23,662) | (13,795) | (9,866) | 71.5% |
| Sales and marketing expenses | (519) | (663) | 144 | (21.7)% |
| General and administrative expenses | (7,220) | (6,184) | (1,037) | 16.8% |
| Total Operating expenses | (31,401) | (20,642) | (10,759) | 52.1% |
| Financial income (expense) | (113) | 1,534 | (1,647) | (107.4)% |
| Income tax | — | — | — | —% |
| Net loss | (30,442) | (16,736) | (13,705) | 81.9% |
| Basic/diluted Net loss per share attributable to shareholders | (0.32) | (0.17) |
Operating Income
The following table summarizes our operating income during the three months ended September 30, 2024 and 2023:
| 2024 | Three months ended September 30, 2023 | $ change | % of change | |
|---|---|---|---|---|
| Sales | — | — | — | —% |
| Other income | 1,072 | 2,372 | (1,299) | (54.8)% |
| Research tax credit | 1,072 | 1,237 | (165) | (13.4)% |
| Other operating income | — | 1,134 | (1,134) | (100.0)% |
| Total operating income | 1,072 | 2,372 | (1,299) | (54.8)% |
17
Until the end of 2023, our operating income was composed of both the French research tax credit (Crédit d’Impôt Recherche, or “CIR”) and the revenue recognized under the Collaboration Agreement with NESTEC. Following the termination of the Collaboration Agreement on October 30, 2023, our operating income is now exclusively generated by the French research tax credit which explains why Other operating income was nil for the three months ended September 30, 2024 compared to $1.1 million for the three months ended September 30, 2023.
Research tax credit decreased by $0.2 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023 primarily due to a greater proportion of studies activities carried out in North America and therefore not eligible to the French Research tax credit.
Operating Expenses
Research and Development Expenses
The following table summarizes our research and development expenses incurred during the three months ended September 30, 2024 and 2023:
| Research and Development expenses 2024 | Three months ended September 30 2023 | $ change | % of change | |
|---|---|---|---|---|
| External clinical-related expenses | 17,216 | 12,277 | 4,939 | 40.2% |
| Employee-related costs | 4,300 | 3,203 | 1,097 | 34.2% |
| Share-based payment expenses | 726 | 460 | 266 | 57.7% |
| Depreciation, amortization and other costs | 1,419 | (2,145) | 3,565 | (166.2)% |
| Total Research and Development expenses | 23,662 | 13,795 | 9,866 | 71.5% |
Research and Development expenses increased by $9.9 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, due to an increase in external clinical-related expenses of $4.9 million, primarily reflecting progress on subject enrollment in VITESSE Phase 3 clinical trial after the initiation of the study with the first patient screened in March 2023.
Employee-related costs, excluding share-based payments, increased by $1.1 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023 due to the recruitment of 13 internal resources in Medical, Quality and Regulatory Affairs mostly based in the U.S.
Depreciation, amortization and other costs increased by $3.6 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, due to (1) the termination of the Collaboration Agreement with NESTEC no longer requiring onerous contract provisioning, (2) accruals on CRO activities and (3) Medical, Quality and Regulatory Affairs activities.
Sales and Marketing expenses
The following table summarizes our sales and marketing expenses incurred during the three months ended September 30, 2024 and 2023:
| Sales & Marketing expenses 2024 | Three Months Ended September 30, 2023 | $ change | % of change | |
|---|---|---|---|---|
| Personnel expenses (incl.share-based payment expenses) | 144 | 184 | (40) | -21.8% |
| External professional services and other costs | 187 | 343 | (156) | -45.5% |
| Depreciation, amortization and other costs | 188 | 136 | 52 | 38.2% |
| Total Sales & Marketing expenses | 519 | 663 | (144) | -21.7% |
Sales and marketing expenses have decreased by $0.1 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023 mainly due to the optimization of external professional services.
General and Administrative expenses
The following table summarizes our general and administrative expenses incurred during the three months ended September 30, 2024 and 2023:
| General & Administrative expenses 2024 | Three Months Ended September 30, 2023 | $ change | % of change | |
|---|---|---|---|---|
| External professional services | 2,579 | 840 | 1,738 | 206.8% |
| Employee-related costs | 2,307 | 2,024 | 283 | 14.0% |
| Share-based payment expenses | 835 | 853 | (18) | -2.1% |
| Depreciation, amortization and other costs | 1,500 | 2,467 | (967) | -39.2% |
| Total General & Administrative expenses | 7,220 | 6,184 | 1,037 | 16.8% |
General and Administrative expenses increased by $1.0 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
External professional services increased by $1.7 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023 mainly due to (1) one-time costs associated with financing activities, and trademark and patent activities and (2) an accrual reversal that occurred last year and had the effect of reducing the corresponding last year expenses.
These increases are partially offset by a decrease in depreciation, amortization and other costs for $1.0 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023 primarily due to the provision reversal on the Montrouge office revamping following the non-renewal of the related lease agreement.
Financial income (expense)
Our financial expense was $(0.1) million for the three months ended September 30, 2024, compared to a financial income of $1.5 million for the three months ended September 30, 2023. This item mainly includes the financial income on our financial assets and foreign exchange result.
Income tax
Our income tax expense was nil for the three months ended September 30, 2024 compared to nil for the three months ended September 30, 2023.
Net loss
Net loss was $30.4 million for the three months ended September 30, 2024, compared to $16.7 million for the three months ended September 30, 2023. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.32 and $0.17 for the three months ended September 30, 2024 and 2023, respectively.
Comparison of the Nine Months Ended September 30, 2024 and 2023
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 nine months ended September 30, 2024 and 2023.
| 2024 | Nine Months Ended September 30, 2023 | $ change | % of change | |
|---|---|---|---|---|
| Operating income | 3,640 | 6,853 | (3,213) | (46.9)% |
| Operating expenses | ||||
| Research and development expenses | (70,438) | (47,448) | (22,990) | 48.5% |
| Sales and marketing expenses | (2,263) | (1,613) | (650) | 40.3% |
| General and administrative expenses | (23,667) | (22,304) | (1,364) | 6.1% |
| Total Operating expenses | (96,368) | (71,365) | (25,003) | 35.0% |
| Financial income | 1,873 | 2,984 | (1,111) | (37.2)% |
| Income tax | (48) | (13) | (35) | 273.6% |
| Net loss | (90,903) | (61,540) | (29,363) | 47.7% |
| Basic/diluted Net loss per share attributable to shareholders | (0.95) | (0.65) |
Operating Income
The following table summarizes our operating income during the nine months ended September 30, 2024 and 2023:
| 2024 | Nine Months Ended September 30, 2023 | $ change | % of change | |
|---|---|---|---|---|
| Sales | — | — | ||
| Other income | 3,640 | 6,853 | (3,213) | (46.9)% |
| Research tax credit | 3,640 | 4,978 | (1,338) | (26.9)% |
| Other operating income | — | 1,875 | (1,875) | (100.0)% |
| Total operating income | 3,640 | 6,853 | (3,213) | (46.9)% |
During the nine months ended September 30, 2024 we generated an Operating Income of $3.6 million compared to $6.9 million during the nine months ended September 30, 2023.
Until the end of 2023, our operating income was composed of both the French research tax credit (Crédit d’Impôt Recherche, or “CIR”) and the revenue recognized under the Collaboration Agreement with NESTEC. Following the termination of the Collaboration Agreement on October 30, 2023, our operating income is now exclusively composed of the French research tax credit. Other operating income was nil for the nine months ended September 30, 2024 compared to $1.9 million for the nine months ended September 30, 2023.
Research tax credit decreased by $1.3 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 primarily due to the fact that a greater proportion of clinical studies activities were carried out in North America and were therefore not eligible to the French Research tax credit.
Operating Expenses
Research and Development Expenses
The following table summarizes our R&D expenses incurred during the nine months ended September 30, 2024 and 2023:
| Research and Development expenses 2024 | Nine Months Ended September 30, 2023 | $ change | % of change | |
|---|---|---|---|---|
| External clinical-related expenses | 49,708 | 34,170 | 15,538 | 45.5% |
| Employee-related costs | 13,059 | 9,797 | 3,262 | 33.3% |
| Share-based payment expenses | 2,192 | 1,886 | 305 | 16.2% |
| Depreciation, amortization and other costs | 5,479 | 1,595 | 3,884 | 243.5% |
| Total Research and Development expenses | 70,438 | 47,448 | 22,990 | 48.5% |
Research and Development expenses increased by $23.0 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, essentially due to external clinical-related expenses increasing by $15.5 million from both patient enrollment in VITESSE Phase 3 clinical trial sustainable increase after the initiation of the study with the first patient screened in March 2023 and the preparatory activities for the COMFORT studies in preparation for and anticipation of initiation after FDA alignment.
Employee-related costs, excluding share-based payments, increased by $3.3 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 due to the recruitment of 13 internal resources in Medical, Quality and Regulatory Affairs, mostly based in the U.S.
Depreciation, amortization and other costs increased by $3.9 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, due to (1) l the termination of the Collaboration Agreement with NESTEC, (2) accruals on CRO activities and (3) Medical, Quality and Regulatory Affairs activities.
Sales and Marketing expenses
The following table summarizes our sales and marketing expenses incurred during the nine months ended September 30, 2024 and 2023:
| Sales & Marketing expenses 2024 | Nine Months Ended September 30, 2023 | $ change | % of change | |
|---|---|---|---|---|
| Personnel expenses (incl.share-based payment expenses) | 731 | 557 | 175 | 31.4% |
| External professional services and other costs | 754 | 691 | 63 | 9.1% |
| Depreciation, amortization and other costs | 777 | 365 | 412 | 113.0% |
| Total Sales & Marketing expenses | 2,263 | 1,613 | 650 | 40.3% |
Sales and marketing expenses increased by $0.6 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily to support pre-commercialization activities for Viaskin Peanut in North America.
General and Administrative expenses
The following table summarizes our general and administrative expenses incurred during the nine months ended September 30, 2024 and 2023:
| General & Administrative expenses 2024 | Nine Months Ended September 30, 2023 | $ change | % of change | |
|---|---|---|---|---|
| External professional services | 8,173 | 6,352 | 1,821 | 28.7% |
| Employee-related costs | 7,001 | 6,023 | 977 | 16.2% |
| Share-based payment expenses | 2,791 | 2,811 | (20) | -0.7% |
| Depreciation, amortization and other costs | 5,703 | 7,117 | (1,414) | -19.9% |
| Total General & Administrative expenses | 23,667 | 22,304 | 1,364 | 6.1% |
General and Administrative expenses increased by $1.4 million for nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
External professional services increased by $1.8 million for nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to one-time costs associated with (1) office moves in France and the U.S, (2) financing activities and (3) trademark and patent activities.
This increase is partially offset by a decrease in depreciation, amortization and other costs for $1.4 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 primarily due to the provision reversal on the Montrouge office revamping.
Financial income (expense)
Our financial income was $1.9 million for the nine months ended September 30, 2024, compared to a financial income of $3.0 million for the nine months ended September 30, 2023. This item mainly includes financial income on our financial assets and an unfavorable foreign exchange result.
Income tax
Our income tax expense was $48 thousand for the nine months ended September 30, 2024 compared to $13 thousand for the nine months ended September 30, 2023.
Net loss
Net loss was $90.9 million for the nine months ended September 30, 2024, compared to $61.5 million for the nine months ended September 30, 2023. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.95 and $0.65 for the nine months ended September 30, 2024 and 2023, respectively.
Liquidity and Capital Resources
Financial Condition
On September 30, 2024, we had $46.4 million in cash and cash equivalents compared to $141.4 million of cash and cash equivalents on December 31, 2023.
Based on its current operations, plans and assumptions, the Company expects that its balance of cash and cash equivalents will be sufficient to fund its operations into the first quarter 2025.
As of the date of filing, our available cash and cash equivalents will not be sufficient to support our operating plan for at least the next 12 months. As such, there is substantial doubt regarding our ability to continue as a going concern.
We have incurred operating losses and negative cash flows from operations since our inception. Net cash used for operating activities was $92.2 million and $66.0 million for the nine months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024, we recorded a net loss of $90.9 million. Our net cash flows provided by financing activities decreased to $(0.1) million during the nine months ended September 30, 2024 from $7.0 million during the nine months ended September 30, 2023 yielded by our ATM.
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.
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 ordinary share of the Company. The ATM program was intended to be effective through the expiration on July 16, 2024 of the Company’s existing registration statement registering the ADSs to be issued under the ATM program. The Company’s intent was 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.
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.
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 Châtillon, France. Our principal offices occupy a 2,447 square meter facility, pursuant to a lease agreement dated November, 2023 and represents $5.7 million cash requirement as of September 30, 2024. The lease term ends in March, 2033.
The lease agreement for the office occupying 4,470 square meter facility in Montrouge, France, signed on March 3, 2015, with an effective date of August 1, 2025, expired on May 31, 2024. Associated lease termination costs were reflected in the Company’s financial accounts in the Annual Report.
Our primary U.S. office is located in Warren, New Jersey. In February 2024, we entered into a sublease agreement, commencing on March 19, 2024 and effective for 70 months, for an office of 16,704 square feet in Warren, New Jersey. The Warren office represent a $1.9 million cash requirement as of September 30, 2024 which expires December 31, 2029.
We also have facilities in North America that were intended to support our U.S. operations. We lease 5,799 square feet in Basking Ridge, New Jersey, which commenced on April 1, 2022 and is effective for 38 months.The Basking Ridge office represents a $0.1 million cash requirement as of September 30, 2024 which expires April 30, 2025.
The Company transitioned to its new offices location in Warren NJ and Châtillon France in April 2024.
There have been no material changes in our operating leases from those disclosed in the Annual Report except the impact of the new lease in Warren NJ for $1.7 million.
Purchase obligations - Obligations Under the Terms of CRO Agreements
In preparation of the launch of our clinical trials for Viaskin Peanut, we signed agreements with several contract research organizations. As of September 30, 2024 expenses associated with the ongoing trials amounted globally to $162.4 million compared to $114.4 million as of December 31, 2023.
There have been no material changes in our purchase obligations from those disclosed in our Annual Report.
Summary Statement of Cash Flows
The table below summarizes our sources and uses of cash for the nine months ended September 30, 2024 and 2023.
(Amounts in thousands of U.S. Dollars)
| Nine Months Ended September 30, 2024 | 2023 | $ change | % of change | |
|---|---|---|---|---|
| Net cash flow provided by (used in) operating activities | (92,222) | (65,967) | (26,255) | 39.8% |
| Net cash flow provided by (used in) investing activities | (1,550) | (621) | (929) | 149.7% |
| Net cash flowprovided by (used in) financing activities | (88) | 6,956 | (7,045) | (101.3)% |
| Effect of exchange rate changes on cash and cash equivalents | (1,065) | (427) | (638) | 149.2% |
| Net (decrease) increase in cash and cash equivalents | (94,925) | (60,059) | (34,866) | 58.1% |
Operating Activities
Our net cash flows used in operating activities were $92.2 million and $66.0 million during the nine months ended September 30, 2024 and 2023, respectively. Our net cash flows used in operating activities increased by $26.3 million . The variance is mainly driven by the increase in (1) external clinical related expenses by $10.2 million, (2) Regulatory and Manufacturing activities by $9.9 million and (3) internal employees’ compensation increase by $4.8 million as a result of the hiring of 16 additional internal resources.
Investing Activities
Our net cash flows used in investing activities were $1.5 million and $0.6 million during the nine months ended September 30, 2024 and 2023 respectively. The variance includes capitalized costs for the headquarters move to Châtillon in April 2024 which amounted to $1.8 million.
Financing Activities
Our net cash flows from financing activities were $(88) thousand for the nine months ended September 30, 2024 compared to $7.0 million for the nine months ended September 30, 2023 from the ATM.
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, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
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, 2,835 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Disclosure Controls and Procedures
Based on its evaluation as of September 30, 2024, 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, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
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.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2024-09-30. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2024-07-01 to 2024-09-30 | $1.1m | us-gaap:Revenues |
| Revenue | 9 months2024-01-01 to 2024-09-30 | $3.6m | us-gaap:Revenues |
| Research and development | 3 months2024-07-01 to 2024-09-30 | $23.7m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months2024-01-01 to 2024-09-30 | $70.4m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months2024-07-01 to 2024-09-30 | −$30.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months2024-01-01 to 2024-09-30 | −$92.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months2024-07-01 to 2024-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months2024-01-01 to 2024-09-30 | $48.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months2024-07-01 to 2024-09-30 | −$30.4m | us-gaap:NetIncomeLoss |
| Net income | 9 months2024-01-01 to 2024-09-30 | −$90.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2024-07-01 to 2024-09-30 | −$0.32 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months2024-01-01 to 2024-09-30 | −$0.95 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2024-07-01 to 2024-09-30 | −$0.32 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months2024-01-01 to 2024-09-30 | −$0.95 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2024-07-01 to 2024-09-30 | 96,201,476 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months2024-01-01 to 2024-09-30 | 96,187,868 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months2024-01-01 to 2024-09-30 | −$92.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months2024-01-01 to 2024-09-30 | $2.5m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | At period end2024-09-30 | $46.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | At period end2024-09-30 | $68.8m | us-gaap:AssetsCurrent |
| Total assets | At period end2024-09-30 | $93.1m | us-gaap:Assets |
| Current liabilities | At period end2024-09-30 | $30.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | At period end2024-09-30 | $39.0m | us-gaap:Liabilities |
| Shareholders' equity | At period end2024-09-30 | $54.0m | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0001613780-24-000007. Last ingested by Listed: Oct 29, 2026, 05:16 ET. Listed shows no prices and gives no investment advice.