DBVT 10-Q
DBV Technologies S.A. (DBVT)
Table of Contents
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
State or other jurisdiction of incorporation or organization |
(I.R.S. Employer Identification No.) | |
177-181 avenue Pierre Brossolette |
N/A | |
(Zip Code) | ||
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-half of one ordinary share, nominal value |
||||
€0.10 per share |
||||
n/a |
* |
Securities |
registered pursuant to section 12(g) of the Act: None. |
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☒ |
Smaller reporting company |
||||
Emerging growth company |
||||||
Table of Contents
Table of contents
Unless the context otherwise requires, we use the terms “DBV”, “DBV Technologies,” the “Company,” “we,” “us” and “our” in this Quarterly Report on Form 10-Q, or Quarterly Report, to refer to DBV Technologies S.A. and, where appropriate, its consolidated subsidiaries. “Viaskin™”, “EPIT™” and our other registered and common law trade names, trademarks and service marks are the property of DBV Technologies S.A. or our subsidiaries. All other trademarks, trade names and service marks appearing in this Quarterly Report are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Quarterly Report may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.
2
Table of Contents
| • | our expectations regarding the timing or likelihood of regulatory filings and approvals, including with respect to our anticipated re-submission of a Biologics License Application, or a BLA, for ViaskinTM Peanut to the U.S. Food and Drug Administration, or the FDA; |
| • | the timing and anticipated results of interactions with regulatory agencies; |
| • | the initiation, timing, progress and results of our pre-clinical studies and clinical trials, and our research and development programs; |
| • | the sufficiency of existing capital resources; |
| • | our business model and our other strategic plans for our business, product candidates and technology; |
| • | our ability to manufacture clinical and commercial supplies of our product candidates and comply with regulatory requirements related to the manufacturing of our product candidates; |
| • | our ability to build our own sales and marketing capabilities, or seek collaborative partners, to commercialize Viaskin Peanut and/or our other product candidates, if approved; |
| • | the commercialization of our product candidates, if approved; |
| • | our expectations regarding the potential market size and the size of the patient populations for Viaskin Peanut and/or our other product candidates, if approved, and our ability to serve such markets; |
| • | the pricing and reimbursement of our product candidates, if approved; |
| • | the rate and degree of market acceptance of Viaskin Peanut and/or our other product candidates, if approved, by physicians, patients, third- party payors and others in the medical community; |
| • | our ability to advance product candidates into, and successfully complete, clinical trials; |
| • | the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology; |
| • | estimates of our expenses, future revenues, capital requirements and our needs for additional financing; |
| • | the potential benefits of strategic collaboration agreements and our ability to enter into strategic arrangements; |
| • | our ability to maintain and establish collaborations or obtain additional grant funding; |
| • | our financial performance; |
| • | developments relating to our competitors and our industry, including competing therapies; and |
| • | other risks and uncertainties, including those listed under the caption “Risk Factors.” |
September 30, |
December 31, |
|||||||||||
Notes |
2023 |
2022 |
||||||||||
| Assets |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
3 | $ | $ | |||||||||
| Other current assets |
4 | |||||||||||
| |
|
|
|
|||||||||
| Total current assets |
||||||||||||
| Property, plant, and equipment, net |
||||||||||||
| Right-of-use |
5 | |||||||||||
| Intangible assets |
||||||||||||
| Other non-current assets |
||||||||||||
| |
|
|
|
|||||||||
| Total non-current assets |
||||||||||||
| |
|
|
|
|||||||||
| Total Assets |
$ | $ | ||||||||||
| |
|
|
|
|||||||||
| Liabilities and shareholders’ equity |
||||||||||||
| Current liabilities: |
||||||||||||
| Trade payables |
6 | $ | $ | |||||||||
| Short-term operating leases |
5 | |||||||||||
| Current contingencies |
9 | |||||||||||
| Other current liabilities |
6 | |||||||||||
| |
|
|
|
|||||||||
| Total current liabilities |
||||||||||||
| |
|
|
|
|||||||||
| Long-term operating leases |
5 | |||||||||||
| Non-current contingencies |
9 | |||||||||||
| Other non-current liabilities |
6 | |||||||||||
| |
|
|
|
|||||||||
| Total non-current liabilities |
||||||||||||
| |
|
|
|
|||||||||
| Total Liabilities |
$ | $ | ||||||||||
| |
|
|
|
|||||||||
| Shareholders’ equity: |
||||||||||||
| Ordinary shares, € September 30, 2023 and December 31, 2022, respectively |
$ | $ | ||||||||||
| Additional paid-in capital |
||||||||||||
| Treasury stock, |
( |
) | ( |
) | ||||||||
| Accumulated deficit |
( |
) | ( |
) | ||||||||
| Accumulated other comprehensive income |
||||||||||||
| Accumulated currency translation effect |
( |
) | ( |
) | ||||||||
| |
|
|
|
|||||||||
| Total Shareholders’ equity |
7 | $ | $ | |||||||||
| |
|
|
|
|||||||||
| Total Liabilities and Shareholders’ equity |
$ | $ | ||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||
Notes |
2023 |
2022 |
2023 |
2022 |
||||||||||||||||
| Operating income |
10 | $ | $ | $ | $ | |||||||||||||||
| Operating expenses |
||||||||||||||||||||
| Research and development expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| Sales and marketing expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| General and administrative expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Total Operating expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Financial income (expenses) |
||||||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Loss before taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Income tax |
( |
) | ( |
) | ||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Foreign currency translation differences, net of taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| Actuarial gains (losses) on employee benefits, net of taxes |
( |
) | ||||||||||||||||||
| Total comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Basic/diluted net loss per share attributable to shareholders |
14 | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Weighted average shares outstanding used in computing per share amounts: |
||||||||||||||||||||
Nine Months Ended September 30, |
||||||||||||
Notes |
2023 |
2022 |
||||||||||
| Net loss for the period |
|
|
$ | ( |
) | $ | ( |
) | ||||
| Adjustments to reconcile net loss to net cash flow provided by (used in) operating activities: |
|
|
||||||||||
| Depreciation, amortization and accrued contingencies |
|
|
( |
) | ||||||||
| Retirement pension obligations |
|
|
||||||||||
| Expenses related to share-based payments |
|
8 | |
|||||||||
| Other elements |
|
|
( |
) | ||||||||
| Changes in operating assets and liabilities: |
|
|
||||||||||
| Decrease (increase) in other current assets |
|
|
( |
) | ||||||||
| (Decrease) increase in trade payables |
|
|
||||||||||
| (Decrease) increase in other current and non-current liabilities |
|
|
( |
) | ( |
) | ||||||
| Change in operating lease liabilities and right of use assets |
|
|
( |
) | ||||||||
| Net cash flow provided by (used in) operating activities |
|
|
( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Cash flows provided by (used in) investing activities: |
|
|
||||||||||
| Acquisitions of property, plant, and equipment, net from proceeds |
|
|
( |
) | ( |
) | ||||||
| Proceeds from property, plant, and equipment dispositions |
|
|
||||||||||
| Acquisitions of non-current financial assets |
|
|
( |
) | ( |
) | ||||||
| Proceeds from non-current financial assets dispositions |
|
|
( |
) | ||||||||
| |
|
|
|
|
|
|||||||
| Net cash flows provided by (used in) investing activities |
|
|
( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Cash flows provided by (used in) financing activities: |
|
|
||||||||||
| Decrease in conditional advances |
|
|
( |
) | ||||||||
| Treasury shares |
|
|
||||||||||
| Capital increases, net of transaction costs |
|
|
||||||||||
| Other cash flows related to financing activities |
|
|
||||||||||
| |
|
|
|
|
|
|||||||
| Net cash flows provided by (used in) financing activities |
|
|
||||||||||
| |
|
|
|
|
|
|||||||
| Effect of exchange rate changes on cash and cash equivalents |
|
|
( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Net increase (decrease) in cash and cash equivalents |
|
|
( |
) | ||||||||
| |
|
|
|
|
|
|||||||
| Net Cash and cash equivalents at the beginning of the period |
|
|
||||||||||
| |
|
|
|
|
|
|||||||
| Net cash and cash equivalents at the end of the period |
|
3 | |
$ | |
$ | |
|||||
| |
|
|
|
|
|
|||||||
Ordinary shares |
||||||||||||||||||||||||||||||||
Number of Shares |
Amount |
Additional paid-in capital |
Treasury stock |
Accumulated deficit |
Accumulated other comprehensive income (loss) |
Accumulated currency translation effect |
Total Shareholders’ Equity |
|||||||||||||||||||||||||
| Balance at January 1, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Net (loss) |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
| Other comprehensive income (loss) |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||
| Issuance of ordinary shares |
— | — | — | — | ||||||||||||||||||||||||||||
| Treasury shares |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Share-based payments |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Other change in equity |
— | — | — | — | — | ( |
) | — | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at March 31, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Net (loss) |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
| Other comprehensive income (loss) |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||
| Issuance of ordinary shares |
— | — | — | — | ||||||||||||||||||||||||||||
| Issuance of warrants |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Treasury shares |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Share-based payments |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Allocation of accumulated net losses |
— | — | ( |
) | — | — | — | — | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance at June 30, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |
||||||||||||||||||
| Net (loss) |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
| Other comprehensive income (loss) |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||
| Issuance of ordinary shares |
( |
) | — | — | — | — | ( |
) | ||||||||||||||||||||||||
| Issuance of warrants |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Treasury shares |
— | — | — | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||
| Share-based payments |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Allocation of accumulated net losses |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance at September 30, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |
$ | ( |
) | $ | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Ordinary shares |
||||||||||||||||||||||||||||||||
Number of Shares |
Amount |
Additional paid-in capital |
Treasury stock |
Accumulated deficit |
Accumulated other comprehensive income (loss) |
Accumulated currency translation effect |
Total Shareholders’ Equity |
|||||||||||||||||||||||||
| Balance at January 1, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Net (loss) |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
| Other comprehensive income (loss) |
— | — | — | — | — | ( |
) | |||||||||||||||||||||||||
| Issuance of ordinary shares |
( |
) | — | — | — | — | ||||||||||||||||||||||||||
| Treasury shares |
— | — | — | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||
| Share-based payments |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance at March 31, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Net (loss) |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
| Other comprehensive income (loss) |
— | — | — | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
| Issuance of ordinary shares |
— | — | — | — | ||||||||||||||||||||||||||||
| Treasury shares |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Share-based payments |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Allocation of accumulated net losses |
— | — | ( |
) | — | — | — | — | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance at June 30, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Net (loss) |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
| Other comprehensive income (loss) |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||
| Issuance of ordinary shares |
( |
) | — | — | — | — | ( |
) | ||||||||||||||||||||||||
| Treasury shares |
— | — | — | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||
| Share-based payments |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Allocation of accumulated net losses |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance at September 30, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| September 30, 2023 |
December 31, 2022 |
|||||||
Cash |
||||||||
Cash equivalents |
||||||||
Total cash and cash equivalents as reported in the statements of financial position |
||||||||
Bank overdrafts |
||||||||
Total cash and cash equivalents as reported in the statements of cash flows |
||||||||
| September 30, 2023 |
December 31, 2022 |
|||||||
Research tax credit |
||||||||
Other tax claims |
||||||||
Prepaid expenses |
||||||||
Other receivables |
||||||||
Total |
||||||||
Amount in thousands of US Dollars |
||||
Opening research tax credit receivable as of January 1, 2023 |
||||
+ Operating revenue |
||||
- Payment received |
||||
- Adjustment and currency translation effect |
( |
) | ||
Closing research tax credit receivable as of September 30, 2023 |
||||
Of which - Non-current portion |
||||
Of which - Current portion |
||||
September 30, 2023 |
December 31, 2022 |
|||||||||||||||||||||||
Other |
Other |
|||||||||||||||||||||||
Real estate |
assets |
Total |
Real estate |
assets |
Total |
|||||||||||||||||||
Current portion |
||||||||||||||||||||||||
Year 2 |
||||||||||||||||||||||||
Year 3 |
— | |||||||||||||||||||||||
Thereafter |
||||||||||||||||||||||||
Total minimum lease payments |
||||||||||||||||||||||||
Less: Effects of discounting |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Present value of operating lease |
||||||||||||||||||||||||
Less: current portion |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Long-term operating lease |
||||||||||||||||||||||||
Weighted average remaining lease term (years) |
— | — | ||||||||||||||||||||||
Weighted average discount rate |
% | % | % | % | ||||||||||||||||||||
| September 30, | ||||||||
| 2023 | 2022 | |||||||
Operating lease expense |
||||||||
Net termination impact |
( |
) | ( |
) | ||||
| September 30, | ||||||||
| 2023 | 2022 | |||||||
Cash paid for amounts included in the measurement of lease liabilities |
||||||||
Operating cash outflows related to operating leases |
||||||||
September 30, |
December 31, |
|||||||||||||||||||||||
2023 |
2022 |
|||||||||||||||||||||||
Other current liabilities |
Other non-current liabilities |
Total |
Other current liabilities |
Other non-current liabilities |
Total |
|||||||||||||||||||
Employee related liabilities |
||||||||||||||||||||||||
Deferred income |
||||||||||||||||||||||||
Tax liabilities |
||||||||||||||||||||||||
Other debts |
||||||||||||||||||||||||
Total |
||||||||||||||||||||||||
Number of outstanding |
||||||||||||
BSA |
SO |
RSUs |
||||||||||
Balance as of December 31, 2022 |
||||||||||||
Granted during the period |
— | |||||||||||
Forfeited during the period |
— | ( |
) | ( |
) | |||||||
Exercised/released during the period |
— | — | ( |
) | ||||||||
Expired during the period |
— | — | — | |||||||||
Balance as of September 30, 2023 |
||||||||||||
Three Months Ended September 30, |
Nine Months Ended September |
|||||||||||||||||||
30, |
||||||||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||||||
Research & development |
SO | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
| RSU | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Sales & marketing |
SO | ( |
) | ( |
) | ( |
) | |||||||||||||
| RSU | ( |
) | ( |
) | ||||||||||||||||
General & administrative |
SO | ( |
) | ( |
) | ( |
) | ) | ||||||||||||
| RSU | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Total share-based compensation (expense) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| September 30, 2023 |
December 31, 2022 |
|||||||
Current contingencies |
||||||||
Non-current contingencies |
||||||||
Total contingencies |
||||||||
| Pension retirement obligations |
Collaboration agreement - Loss at completion |
Other contingencies |
Total | |||||||||||||
At January 1, 2023 |
— | |||||||||||||||
Increases in liabilities |
— | |||||||||||||||
Used liabilities |
— | — | — | |||||||||||||
Reversals of unused liabilities |
— | ( |
) | — | ( |
) | ||||||||||
Net interest related to employee benefits, and unwinding of discount |
— | — | — | |||||||||||||
Actuarial gains and losses on defined-benefit plans |
— | — | ||||||||||||||
Currency translation effect |
( |
) | ( |
) | ( |
) | ||||||||||
At September 30, 2023 |
||||||||||||||||
Of which Current |
— | |||||||||||||||
Of which Non-current |
— | |||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Research tax credit |
||||||||||||||||
Other operating income |
||||||||||||||||
Total |
||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Research and Development expenses |
||||||||||||||||
Sales and Marketing expenses |
||||||||||||||||
General and Administrative expenses |
||||||||||||||||
Total personnel expenses |
||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Wages and salaries |
||||||||||||||||
Social security contributions |
||||||||||||||||
Expenses for pension commitments |
||||||||||||||||
Employer contribution to bonus shares |
( |
) | ( |
) | ||||||||||||
Share-based payments |
||||||||||||||||
Total |
||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Non-employee warrants |
||||||||||||||||
Stock options |
||||||||||||||||
Restricted stock units |
||||||||||||||||
Prefunded warrants |
||||||||||||||||
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 December 23, 2022, the Company announced it plans to initiate a separate, six-month safety study in approximately 275 additional subjects, randomized 3:1 active versus placebo, to supplement the safety data generated by the VITESSE trial, resulting in a safety database of approximately 600 children ages 4 to 7 years treated with Viaskin Peanut (COMFORT Children).
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 (COMFORT Toddlers) 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.
On July 31, 2023, the Company announced receipt of feedback from FDA on the two supplemental safety studies, COMFORT Children and COMFORT Toddlers. The COMFORT Toddlers safety study will enroll peanut allergic toddlers ages 1 – 3-years and will support the efficacy results generated from the EPITOPE Phase 3 pivotal study. The COMFORT Children safety study will enroll peanut allergic children ages 4 – 7-years and will support the efficacy results anticipated from the ongoing VITESSE Phase 3 pivotal study. The FDA agreed with a 6-month study duration and a 3:1 randomization (active:placebo) of approximately 400 subjects in the double-blind, placebo-controlled COMFORT Toddlers study. The Company expects both COMFORT studies will assess adhesion using the same tools and measurements that were established in VITESSE.
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.
19
Table of Contents
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, 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 September 30, 2023 and 2022.
| Three months ended September 30, | ||||||||||||||||
| 2023 | 2022 | $ change | % change | |||||||||||||
| Operating income |
$ | 2,372 | $ | 2,074 | 297 | 14 | % | |||||||||
| Operating expenses |
||||||||||||||||
| Research and development expenses |
(13,795 | ) | (15,096 | ) | 1,301 | (9 | )% | |||||||||
| Sales and marketing expenses |
(663 | ) | (159 | ) | (504 | ) | 318 | % | ||||||||
| General and administrative expenses |
(6,184 | ) | (4,839 | ) | (1,345 | ) | 28 | % | ||||||||
|
|
|
|
|
|
|
|||||||||||
| Total Operating expenses |
(20,642 | ) | (20,094 | ) | (548 | ) | 3 | % | ||||||||
|
|
|
|
|
|
|
|||||||||||
| Financial income (expenses) |
1,534 | 732 | 802 | 110 | % | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Income tax |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|||||||||||
| Net loss |
$ | (16,736 | ) | $ | (17,287 | ) | 551 | (3 | %) | |||||||
|
|
|
|
|
|
|
|||||||||||
| Basic/diluted Net loss per share attributable to shareholders |
$ | (0.17 | ) | $ | (0.18 | ) | ||||||||||
Operating Income
The following table summarizes our operating income during the three months ended September 30, 2023 and 2022:
| Three months ended September 30, | ||||||||||||||||
| 2023 | 2022 | $ change | % change | |||||||||||||
| Sales |
— | — | — | — | ||||||||||||
| Other income |
2,372 | 2,074 | 297 | 14 | % | |||||||||||
| Research tax credit |
1,237 | 1,407 | (169 | ) | (12 | %) | ||||||||||
| Other operating income |
1,134 | 668 | 467 | 70 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating income |
2,372 | 2,074 | 297 | 14 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
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 $2.4 million during the three months ended September 30, 2023 compared to $2.1 million during the three months ended September 30, 2022.
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.
Operating Expenses
Research and Development Expenses
The following table summarizes our research and development expenses incurred during the three months ended September 30, 2023 and 2022:
20
Table of Contents
| Three Months Ended September 30, |
||||||||||||||||
| Research and Development expenses | 2023 | 2022 | $ change | % change | ||||||||||||
| External clinical-related expenses |
12,277 | 11,136 | 1,141 | 10 | % | |||||||||||
| Employee-related costs (excl. share-based payments) |
3,203 | 2,648 | 555 | 21 | % | |||||||||||
| Share-based payment expenses |
460 | 538 | (78 | ) | (14 | %) | ||||||||||
| Depreciation, amortization and other costs |
(2,145 | ) | 774 | (2,920 | ) | (377 | %) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Research and Development expenses |
13,795 | 15,096 | (1,301 | ) | (9 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Research and Development expenses decreased by $1.3 million for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to the reversal of $4.2 million of the loss at completion recorded as depreciation, amortization and other costs on the Phase II clinical trial conducted as part of the collaboration agreement with Nestlé. During the three months ended September 30, 2023, there was a reduction of costs to be engaged to follow the achievement of upcoming milestones.
Decreases in impacts of the loss at completion were partially offset by the increase by $1.1 million in external clinical-related expenses as a result of differences in phasing of on-going clinical trials between the three months ended September 30, 2022 and the three months ended September 30, 2023 and the increase by $0.6 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 September 30, 2023 and 2022:
| Three Months Ended September 30, | ||||||||||||||||
| Sales and Marketing expenses | 2023 | 2022 | $ change | % change | ||||||||||||
| External professional services |
343 | (279 | ) | 621 | (223 | )% | ||||||||||
| Employee-related costs (excl. share-based payments) |
152 | 188 | (37 | ) | (19 | %) | ||||||||||
| Share-based payment expenses |
32 | (50 | ) | 82 | (165 | %) | ||||||||||
| Depreciation, amortization and other costs |
136 | 299 | (163 | ) | (55 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Sales and Marketing expenses |
663 | 159 | 504 | 318 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing expenses increased by $0.5 million for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, due to an increase 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, 2023 and 2022:
| Three Months Ended September 30, | ||||||||||||||||
| General and Administrative expenses | 2023 | 2022 | $ change | % change | ||||||||||||
| External professional services |
840 | 1,292 | (451 | ) | (35 | %) | ||||||||||
| Employee-related costs (excl. share-based payments) |
2,024 | 1,110 | 914 | 82 | % | |||||||||||
| Share-based payment expenses |
853 | 489 | 364 | 74 | % | |||||||||||
| Depreciation, amortization and other costs |
2,467 | 1,949 | 518 | 27 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total General and Administrative expenses |
6,184 | 4,839 | 1,345 | 28 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
General and Administrative expenses increased by $1.3 million for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, mainly due to increase by $0.9 million in employee-related costs (excluding share-based payments) to support General and Administrative expenses activities explained by the average number of employees increase. In addition, we recorded a provision amounting to $0.8 million as of September 30, 2023, as our best estimate of costs to be incurred if the Montrouge office lease agreement is not renewed at its July 2024 term expiration.
21
Table of Contents
Financial income (expense)
Our financial income was $1.5 million for the three months ended September 30, 2023, compared to a financial income of $0.7 million for the three months ended September 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 September 30, 2023 and September 30, 2022.
Net loss
Net loss was $16.7 million for the three months ended September 30, 2023, compared to $17.3 million for the three months ended September 30, 2022. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.17 and $0.18 for the three months ended September 30, 2023 and 2022, respectively.
Comparison of the Nine Months Ended September 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 nine months ended September 30, 2023 and 2022.
| Nine months ended September 30, | ||||||||||||||||
| 2023 | 2022 | $ change | % change | |||||||||||||
| Operating income |
$ | 6,853 | $ | 6,148 | 705 | 11 | % | |||||||||
| Operating expenses |
||||||||||||||||
| Research and development expenses |
(47,448 | ) | (45,930 | ) | (1,518 | ) | 3 | % | ||||||||
| Sales and marketing expenses |
(1,613 | ) | (1,659 | ) | 46 | (3) | % | |||||||||
| General and administrative expenses |
(22,304 | ) | (17,173 | ) | (5,130 | ) | 30 | % | ||||||||
|
|
|
|
|
|
|
|||||||||||
| Total Operating expenses |
(71,365 | ) | (64,762 | ) | (6,602 | ) | 10 | % | ||||||||
|
|
|
|
|
|
|
|||||||||||
| Financial income (expense) |
2,984 | 1,668 | 1,316 | 79 | % | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Income tax |
(13 | ) | (87 | ) | 74 | (85) | % | |||||||||
|
|
|
|
|
|
|
|||||||||||
| Net loss |
$ | (61,540 | ) | $ | (57,033 | ) | (4,507 | ) | 8 | % | ||||||
|
|
|
|
|
|
|
|||||||||||
| Basic/diluted Net loss per share attributable to shareholders |
$ | (0.65 | ) | $ | (0.79 | ) | ||||||||||
|
|
|
|
|
|||||||||||||
Operating Income
The following table summarizes our operating income during the nine months ended September 30, 2023 and 2022:
| Nine months ended September 30, | ||||||||||||||||
| 2023 | 2022 | $ change | % change | |||||||||||||
| Sales |
— | — | ||||||||||||||
| Other income |
6,853 | 6,148 | ,705 | 11 | % | |||||||||||
| Research tax credit |
4,978 | 4,467 | ,511 | 11 | % | |||||||||||
| Other operating income |
1,875 | 1,681 | ,194 | 12 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating income |
6,853 | 6,148 | ,705 | 11 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
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 $6.9 million during the nine months ended September 30, 2023 compared to $6.1 million during the nine months ended September 30, 2022.
The increase in operating income was mainly due to the increase by $0.5 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.
22
Table of Contents
The other operating income increased by $0.2 million for nine months ended September 30, 2023, after we updated the measurement of progress of the Phase II 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 nine months ended September 30, 2023 and 2022:
| Nine Months Ended September 30, | ||||||||||||||||
| Research and Development expenses | 2023 | 2022 | $ change | % change | ||||||||||||
| External clinical-related expenses |
34,170 | 30,150 | 4,020 | 13 | % | |||||||||||
| Employee-related costs (excl. share-based payments) |
9,797 | 7,761 | 2,036 | 26 | % | |||||||||||
| Share-based payment expenses |
1,886 | 1,596 | 290 | 18 | % | |||||||||||
| Depreciation, amortization and other costs |
1,595 | 6,423 | (4,827 | ) | (75 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Research and Development expenses |
47,448 | 45,930 | 1,518 | 3 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Research and Development expenses increased by $1.5 million for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, mainly due to the increase by $4.0 million and by $2.0 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 $5.3 million of the loss at completion recorded as other costs on the Phase II clinical trial conducted as part of the collaboration agreement with Nestlé. During the nine months ended September 30, 2022, the loss at completion was impacted by additional clinical and production costs following increasing timing to achieve upcoming milestones. During the nine months ended September 30, 2023, there were reduction of costs to be engaged to follow the achievement of upcoming milestones.
Sales and Marketing expenses
The following table summarizes our sales and marketing expenses incurred during the nine months ended September 30, 2023 and 2022:
| nine Months Ended September 30, | ||||||||||||||||
| Sales and Marketing expenses | 2023 | 2022 | $ change | % change | ||||||||||||
| External professional services |
691 | 243 | 449 | 185 | % | |||||||||||
| Employee-related costs (excl. share-based payments) |
454 | 728 | (274 | ) | (38 | %) | ||||||||||
| Share-based payment expenses |
103 | (1 | ) | 104 | (10815 | %) | ||||||||||
| Depreciation, amortization and other costs |
365 | 690 | (325 | ) | (47 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Sales and Marketing expenses |
1,613 | 1,659 | (46 | ) | (3 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing expenses decreased by $ 0.05 million for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, mainly due to a decrease of employee-related costs following departures in the US and other costs offset by an increase of external professional services to support Sales and Marketing activities.
General and Administrative expenses
The following table summarizes our general and administrative expenses incurred during the nine months ended September 30, 2023 and 2022:
| Nine Months Ended September 30, | ||||||||||||||||
| General and Administrative expenses | 2023 | 2022 | $ change | % change | ||||||||||||
| External professional services |
6,352 | 4,171 | 2,182 | 52 | % | |||||||||||
| Employee-related costs (excl. share-based payments) |
6,023 | 5,139 | 884 | 17 | % | |||||||||||
| Share-based payment expenses |
2,811 | 1,822 | 989 | 54 | % | |||||||||||
| Depreciation, amortization and other costs |
7,117 | 6,042 | 1,075 | 18 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total General and Administrative expenses |
22,304 | 17,173 | 5,130 | 30 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
23
Table of Contents
General and Administrative expenses increased by $5.1 million for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, mainly due to an increase by $2.2 million for one-time costs associated with financing activities, organizational planning, market research and planning activities. In addition, we recorded an increase by $0.9 million in employee-related costs to support General and Administrative activities and a provision amounting to $0.8 million as of September 30, 2023, as our best estimate of costs to be incurred if the Montrouge office lease agreement is not renewed at its July 2024 term expiration.
Financial income (expense)
Our financial income was $3.0 million for the nine months ended September 30, 2023, compared to a financial income of $1.7 million for the nine months ended September 30, 2022. This item mainly includes financial income on our financial assets.
Income tax
Our income tax expense was nil for the nine months ended September 30, 2023 and September 30, 2022.
Net loss
Net loss was $ 61.5 million for the nine months ended September 30, 2023, compared to $57.0 million for the nine months ended September 30, 2022. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.65 and $0.79 for the nine months ended September 30, 2023 and 2022, respectively.
Liquidity and Capital Resources
Financial Condition
On September 30, 2023, we had $149.1 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 $66.0 million and $31.8 million for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, we recorded a net loss of $ 61.5 million. Our net cash flows provided by financing activities were $7.0 million during the nine months ended September 30, 2023 that consisted of the ATM program compared to $194.4 million during the nine months ended September 30, 2022, that consisted of the May 2022 ATM and June 2022 PIPE offering.
Our unaudited 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 unaudited 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.
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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 $1.2 million cash requirement as of September 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 September 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 nine months ended September 30, 2023 and 2022.
| Nine months ended September 30, | ||||||||||||||||
| (Amounts in thousands of U.S. Dollars) | 2023 | 2022 | $ change | % of change | ||||||||||||
| Net cash flow used in operating activities |
(65,967 | ) | (31,781 | ) | (34,186 | ) | 108 | % | ||||||||
| Net cash flow used in investing activities |
(621 | ) | (66 | ) | (555 | ) | 839 | % | ||||||||
| Net cash flow provided by financing activities |
6,956 | 194,403 | (187,447 | ) | -96 | % | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents |
(427 | ) | (27,186 | ) | 26,759 | -98 | % | |||||||||
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| Net (decrease) increase in cash and cash equivalents |
(60,059 | ) | 135,369 | (195,429 | ) | -144 | % | |||||||||
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Operating Activities
Our net cash flows used in operating activities were $66.0 million and $31.8 million during the nine months ended September 30, 2023 and 2022, respectively. Our net cash flows used in operating activities increased by $ 34.2 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 nine months period ended September 30, 2023 compared to the nine months period ended September 30, 2022.
Investing Activities
Our net cash flows used in investing activities were $0.6 million and $0.1 million during the nine months ended September 30, 2023 and 2022, respectively.
Financing Activities
Our net cash flows provided by financing activities was $7.0 million during the nine months ended September 30, 2023 that consisted of the ATM in June 2023 compared to $194.4 million during the nine months ended September 30, 2022, that consisted of our May 2022 ATM and June 2022 PIPE offering in second quarter of 2022.
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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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
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.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Based on its evaluation as of September 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.
PART II – Other information
Item 1. Legal Proceedings
See “Note 2: Significant Events and Transactions – Legal Proceedings” in the notes to the condensed consolidated financial statements included elsewhere in this Report.
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Item 1A. Risk Factors
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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the nine months ended September 30, 2023, we issued the following unregistered securities:
| • | On March 23, 2023, the issuance of an aggregate of 10,174 ordinary shares to U.S. and non-U.S. employees upon settlement of RSUs; and |
| • | On May 19, 2023, the issuance of an aggregate of 2,500 ordinary shares to a non-U.S. employee upon settlement of RSUs; and |
| • | On May 22, 2023, the issuance of an aggregate of 14,364 ordinary shares to non-U.S. employees upon settlement of RSUs; and |
| • | On May 24, 2023, the issuance of an aggregate of 34,321 ordinary shares to U.S. and non-U.S. employees upon settlement of RSUs; and |
| • | On September 23, 2023, the issuance of an aggregate of 2,599 ordinary shares to U.S. and non-U.S. employees upon settlement of RSUs. |
None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe these transactions were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Regulation S promulgated under Section 5 of the Securities Act, as transactions by an issuer not involving any public offering or as offerings made to non-U.S. resident employees pursuant to an employee benefit plan established and administered in accordance with the law of a country other than the United States (namely, the Republic of France) and in accordance with that country’s practices and documentation. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits.
Exhibit Index
| Exhibit |
Description |
Incorporated by Reference | ||||||||
| Schedule/ Form |
File Number |
Exhibit | File Date | |||||||
| 3.1 | By-laws (statuts) of the registrant (English translation) | 10-Q | 001- 36697 |
3.1 | 5/04/23 | |||||
| 31.1 | Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended | |||||||||
| 31.2 | Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended | |||||||||
| 32.1* | Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, as amended | |||||||||
| 101.INS | XBRL Instance Document | |||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||
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| Exhibit |
Description |
Incorporated by Reference | ||||||||||||||||
| Schedule/ Form |
File Number |
Exhibit | File Date |
|||||||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||
| 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | |||||||||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||
| 104 | Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101. | |||||||||||||||||
| * | Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporate language contained in such filing. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DBV Technologies S.A. | ||||||
| (Registrant) | ||||||
| Date: October 31, 2023 | By: | /s/ Daniel Tassé | ||||
| Daniel Tassé | ||||||
| Chief Executive Officer | ||||||
| (Principal Executive Officer) | ||||||
| Date: October 31, 2023 | By: | /s/ Sébastien Robitaille | ||||
| Sébastien Robitaille | ||||||
| Chief Financial Officer | ||||||
| (Principal Financial and Accounting Officer) | ||||||
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