DBVT 10-Q
DBV Technologies S.A. (DBVT)
10-Q
2021-08-02
For: 2021-06-30
View Original
Added on
April 10, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 001-36697
(Exact name of registrant as specified in its charter)
e | ||
State or other jurisdiction of incorporation or organization |
(I.R.S. Employer Identification No.) | |
177-181 avenue Pierre Brossolette |
||
(Address of principal executive offices) |
(Zip Code) | |
Registrant’s telephone number, including area code +33 1 55 42 78 78
Securities registered pursuant to Section 12(b) of the Act:
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.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past Yes
90 days. ☒
☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation Yes
S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2
of the Exchange Act. | Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
| Emerging growth company | ||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes
No
As of July 30, 2021, the registrant had 55,011,687 ordinary shares, nominal value €0.10 per share, outstanding.
Table of contents
Page |
||||||
Part I |
2 |
|||||
Item 1 |
2 |
|||||
3 |
||||||
4 |
||||||
5 |
||||||
6 |
||||||
Item 2 |
15 |
|||||
Item 3 |
22 |
|||||
Item 4 |
22 |
|||||
Part II |
||||||
Item 1 |
23 |
|||||
Item 1A |
23 |
|||||
Item 2 |
23 |
|||||
Item 3 |
23 |
|||||
Item 4 |
23 |
|||||
Item 5 |
23 |
|||||
Item 6 |
24 |
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, 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 on Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Quarterly Report on Form 10-Q 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. SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS.
This Quarterly Report on Form
10-Q
(“Form 10-Q”)
contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or variations of these words or similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Any forward-looking statement involves known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statement. Forward-looking statements include statements, other than statements of historical fact, about, among other things: | • | statements regarding the impact of the ongoing COVID-19 pandemic and its effects on our operations, research and development and clinical trials and potential disruption in the operations and business of third-party manufacturers, contract research organizations, other service providers and collaborators with whom we conduct business; |
| • | 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 for ViaskinTM Peanut to the U.S. Food and Drug Administration; |
| • | 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.” in our most recent Annual Report on Form 10-K and in any subsequent Quarterly Reports on Form 10-Q. |
Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form
10-Q,
these statements are based on our estimates or projections of the future that are subject to known and unknown risks and uncertainties and other important factors that may cause our actual results, level of activity, performance, experience or achievements to differ materially from those expressed or implied by any forward-looking statement. These risks, uncertainties and other factors are described in greater detail under the caption “Risk Factors” in Part I. Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on March 17, 2021. As a result of the risks and uncertainties, the results or events indicated by the forward-looking statements may not occur. Undue reliance should not be placed on any forward-looking statement. In addition, any forward-looking statement in this Quarterly Report on Form 10-Q represents our views only as of the date of this Quarterly Report on Form 10-Q and should not be relied upon as representing our views as of any subsequent date. We anticipate that subsequent events and developments may cause our views to change. Although we may elect to update these forward-looking statements publicly at some point in the future, we specifically disclaim any obligation to do so, except as required by applicable law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
1
Part I – Financial Information
Item 1. Financial Statements
DBV Technologies S.A.
Condensed Consolidated Statements of Financial Position (unaudited)
(amounts in thousands, except share and per share data)
June 30, |
December 31, |
|||||||||||
Note |
2021 |
2020 |
||||||||||
| Assets |
||||||||||||
| Current assets : |
||||||||||||
| Cash and cash equivalents |
3 |
$ | $ | |||||||||
| Trade receivables |
— | |||||||||||
| Other current assets |
||||||||||||
| |
|
|
|
|||||||||
| Total current assets |
||||||||||||
| Property, plant, and equipment, net |
||||||||||||
| Right-of-use |
||||||||||||
| Intangible assets |
||||||||||||
| Other non-current assets |
||||||||||||
| |
|
|
|
|||||||||
| Total non-current assets |
||||||||||||
| |
|
|
|
|||||||||
| Total Assets |
$ |
$ |
||||||||||
| |
|
|
|
|||||||||
| Liabilities and shareholders’ equity |
||||||||||||
| Current liabilities: |
||||||||||||
| Trade payables |
4 |
$ | $ | |||||||||
| Short-term operating leases |
||||||||||||
| Short-term financial debt |
||||||||||||
| Current contingencies |
7 |
|||||||||||
| Other current liabilities |
4 |
|||||||||||
| |
|
|
|
|||||||||
| Total current liabilities |
||||||||||||
| |
|
|
|
|||||||||
| Long-term operating leases |
||||||||||||
| Long-term financial debt |
||||||||||||
| Non-current contingencies |
7 |
|||||||||||
| Other non-current liabilities |
4 |
|||||||||||
| |
|
|
|
|||||||||
| Total non-current liabilities |
||||||||||||
| |
|
|
|
|||||||||
| Total Liabilities |
$ |
$ |
||||||||||
| |
|
|
|
|||||||||
| Shareholders’ equity : |
||||||||||||
| Ordinary shares, € |
$ | $ | ||||||||||
| Additional paid-in capital |
||||||||||||
| Treasury stock, |
( |
) | ( |
) | ||||||||
| Accumulated deficit |
( |
) | ( |
) | ||||||||
| Accumulated other comprehensive income |
||||||||||||
| Accumulated currency translation effect |
||||||||||||
| |
|
|
|
|||||||||
| Total Shareholders’ equity |
5 |
$ |
$ |
|||||||||
| |
|
|
|
|||||||||
| Total Liabilities and Shareholders’ equity |
$ |
$ |
||||||||||
| |
|
|
|
|||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
DBV Technologies S.A.
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)
(amounts in thousands, except share and per share data)
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||
Note |
2021 |
2020 |
2021 |
2020 |
||||||||||||||||
| Operating income |
8 |
$ |
( |
) |
$ |
$ |
$ |
|||||||||||||
| Operating expenses |
||||||||||||||||||||
| Research and development expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| Sales and marketing expenses |
( |
) | ( |
) | ( |
) | ||||||||||||||
| General and administrative expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| Restructuring expenses |
— | ( |
) | — | ( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Total Operating expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Loss from operations |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Financial income (expense) |
( |
) | ( |
) | ||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Loss before taxes |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Income tax |
( |
) | ( |
) | ||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Net loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Other comprehensive loss |
||||||||||||||||||||
| Foreign currency translation differences, net of taxes |
( |
) | ||||||||||||||||||
| Actuarial gains (losses) on employee benefits, net of taxes |
( |
) | ( |
) | ( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Comprehensive loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Basic/diluted net loss per share attributable to shareholders |
11 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||||||
| Weighted average shares outstanding used in computing per share amounts: |
||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
DBV Technologies S.A.
Condensed Consolidated Statements of Cash Flows (unaudited)
(amounts in thousands)
Six Months Ended June 30, |
||||||||||||
Notes |
2021 |
2020 |
||||||||||
| Net loss for the period |
$ |
( |
) |
$ |
( |
) | ||||||
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|||||||||||
| Depreciation, amortization and accrued contingencies |
||||||||||||
| Retirement pension obligations |
( |
) | ||||||||||
| Expenses related to share-based payments |
6 |
( |
) | |||||||||
| Other elements |
( |
) | ||||||||||
| Changes in operating assets and liabilities: |
||||||||||||
| Decrease (increase) in inventories and work in progress |
— | ( |
) | |||||||||
| Decrease (increase) in trade receivables |
||||||||||||
| 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 used in operating activities |
( |
) |
( |
) | ||||||||
| |
|
|
|
|||||||||
| Cash flows used in investing activities: |
||||||||||||
| Acquisitions of property, plant, and equipment, net from proceeds |
( |
) | ( |
) | ||||||||
| Acquisitions of intangible assets |
— | ( |
) | |||||||||
| Acquisitions of non-current financial assets |
— | ( |
) | |||||||||
| |
|
|
|
|||||||||
| Net cash flows used in investing activities |
( |
) |
( |
) | ||||||||
| |
|
|
|
|||||||||
| Cash flows provided by financing activities: |
||||||||||||
| (Decrease) increase in conditional advances |
( |
) | ||||||||||
| Treasury shares |
( |
) | ||||||||||
| Capital increases, net of transaction costs |
||||||||||||
| Other cash flows related to financing activities |
( |
) | ( |
) | ||||||||
| |
|
|
|
|||||||||
| Net cash flows provided by financing activities |
||||||||||||
| |
|
|
|
|||||||||
| Effect of exchange rate changes on cash and cash equivalents |
( |
) | ||||||||||
| |
|
|
|
|||||||||
| Net (decrease) increase 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 |
$ |
$ |
|||||||||
| |
|
|
|
|||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
DBV Technologies S.A.
Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)
(amounts in thousands, except share and per share data)
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, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||
| Net (loss) |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
| Other comprehensive income (loss) |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||
| Issuance of ordinary shares |
— | — | — | — | ||||||||||||||||||||||||||||
| Treasury shares |
— | — | — | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||
| Share-based payments |
— | — | — | — | — | |||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance at March 31, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||
| Net (loss) |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
| Other comprehensive income (loss) |
— | — | — | — | — | ( |
) | |||||||||||||||||||||||||
| Insuance of ordinary shares |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Treasury shares |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Share-based payments |
— | — | ( |
) | — | — | — | — | ( |
) | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance at June 30, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||
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, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
$ |
|||||||||||||||||||||
| Net (loss) |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
| Other comprehensive loss |
— | — | — | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
| Insuance of ordinary shares |
— | — | — | — | ||||||||||||||||||||||||||||
| Treasury shares |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Share-based payments |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance at March 31, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||
| 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, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
$ |
|||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
Note 1: The Company
Incorporated in 2002 under the laws of France, DBV Technologies S.A. (“DBV Technologies,” or the “Company”, or the “group”) is a clinical-stage specialty biopharmaceutical company focused on changing the field of immunotherapy by developing a novel technology platform called Viaskin
™
. The Company’s therapeutic approach is based on epicutaneous immunotherapy, or EPIT™
, a proprietary method of delivering biologically active compounds to the immune system through intact skin using Viaskin™
. Basis of Presentation
The condensed consolidated financial statements of the Company and its wholly-owned subsidiaries are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and are presented in U.S. dollars. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated on consolidation.
The unaudited condensed consolidated financial statements presented in this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form
10-K
filed with the SEC on March 17, 2021 (the “Annual Report”). The condensed consolidated statement of financial position at December 31, 2020 was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. The Company’s critical accounting policies are detailed in the Annual Report. The Company’s critical accounting policies have not changed materially since December 31, 2020. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. However, these condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period. These interim financial results are not necessarily indicative of results to be expected for the full fiscal year ending December 31, 2021, or any other future period.
Use of estimates
The preparation of the Company’s condensed consolidated financial statements requires the use of estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of income and expenses during the period. The Company bases its estimates and assumptions on historical experience and other factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. The actual results may differ from these estimates.
On an assets related to leases and property, plant and equipment, (5) recoverability of the Company’s net deferred tax assets and related valuation allowance, (6) assumptions used in the valuation model to determine the fair value and vesting conditions of share-based compensation plan, and (7) estimate of contingencies.
on-going
basis, management evaluates its estimates, primarily those related to: (1) evaluation of costs and measure of progress of the development activities conducted as part of the collaboration agreement with Nestlé Health Science, (2) research tax credits, (3) assumptions used in the valuation of right of use assets—operating lease, (4) impairment of right-of-use
Going concern
Since its inception, the Company has primarily funded its operations with equity financings, and, to a lesser extent, public assistance aimed at supporting innovation and payments associated with research tax credits ( or “CIR”). The Company does not generate product revenue and continues to prepare for the potential launch of its first product in the United States and in the European Union, if approved.
Cr
é
dit d
’
Imp
ô
t Recherche
Following receipt of a Complete Response Letter (“CRL”) from the U.S. Food and Drug Administration (the “FDA”) in connection with its Biologics License Application (“BLA”) for Viaskin
of $™
Peanut, beginning in August 2020, the Company scaled down its other clinical programs and pre-clinical
spend to focus on Viaskin™
Peanut. The Company also initiated a global restructuring plan in June 2020 to provide operational latitude to progress the clinical development and regulatory review of Viaskin™
Peanut in the United States and European Union. Based on guidance received from the FDA in January 2021, the Company’s plans to implement such guidance, and expected cost savings from implementation of the global restructuring plan, the Company expects that its current balance of cash and cash equivalents The Company intends to seek additional capital as it prepares for the launch of Viaskin Peanut, if approved, and continues other research and development efforts. The Company may seek to finance its 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. As a result of disruptions to the global financial markets due to the ongoing COVID-19
pandemic, the Company cannot guarantee that it will be able to obtain the necessary financing to meet its needs or to obtain funds at attractive terms and conditions. The ongoing COVID-19
pandemic has already caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to the Company, including reduced ability to raise additional capital when needed or on acceptable terms, if at all. 6
Accounting Pronouncements adopted in 2021
Effective January 1, 2021, the Company adopted ASU
2019-12, Income
Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. The adoption of ASU 2019-12
did not have a material impact on the Company’s financial position or results of operations. Accounting Pronouncements issued not yet adopted
In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU
2016-13
- Financial Instruments - Credit losses, which replaces the incurred loss impairment methodology for financial instruments in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The FASB has issued ASU 2019-10
which has resulted in the postponement of the effective date of the new guidance for eligible smaller reporting companies to the fiscal year beginning January 1, 2023. The guidance must be adopted using a modified-retrospective approach and a prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The Company is currently evaluating the impact of the guidance on its Consolidated Financial Statements. The Company does not expect this new standard will have a material impact on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s Consolidated Financial Statements upon adoption.
Note 2: Significant Events and Transactions
Clinical programs
Viaskin
TM
Peanut for children ages 4-11
in the United States In January 2020, the Company announced positive topline results of the three-year, open-label extension of its Phase III PEPITES trial, or PEOPLE trial, evaluating the long-term efficacy and safety of investigational Viaskin Peanut in peanut-allergic children ages 4 to 11 years. The results demonstrated long-term clinical benefit as shown by an increase in eliciting dose (“ED”), which may decrease the chance of reacting to an accidental peanut exposure. After three years, the Company observed that 75.9 % (107 /141 ) of patients had increased their ED from baseline, and 51.8 % (73 /141 ) of patients reached an ED of at least 1,000 mg peanut protein by year three. The safety profile of Viaskin Peanut was consistent with that observed in the clinical program to date in over 1,000 patients. During the PEOPLE trial, the most common adverse events were mild to moderate skin reactions localized to the administration site, and there was no epinephrine use deemed related to treatment. No treatment related serious adverse events were reported. One patient experienced one case of mild anaphylaxis that was determined by the investigator to be possibly related to treatment and resolved without anti-anaphylactic treatment. Treatment compliance remained high throughout the study at a mean of 98 % over three years of treatment. Low discontinuations due to adverse events were observed.
In February 2020, the FDA announced an Allergenic Products Advisory Committee meeting to be held on May 15, 2020 to discuss the Biologics License Application (BLA) for Viaskin Peanut. On March 16, 2020, the Company announced that the FDA had informed the Company that during its ongoing review of the Company’s BLA for Viaskin Peanut, it had identified questions regarding efficacy, including the impact of patch-site adhesion. Therefore, the Advisory Committee meeting to discuss the BLA originally scheduled on May 15, 2020 was cancelled.
On August 4, 2020, the Company announced that the FDA has issued a Complete Response Letter, or CRL, in which the FDA indicated it could not approve the Viaskin Peanut BLA in its current form. The FDA identified concerns regarding the impact of patch-site adhesion on efficacy and indicated the need for patch modifications, and subsequently a new human factor study. The FDA also indicated that supplementary clinical data would need to be generated to support the modified patch. In addition, the FDA requested additional Chemistry, Manufacturing and Controls, or CMC, data. The FDA did not raise any safety concerns related to Viaskin Peanut.
On January 13, 2021, the Company received written responses from the FDA to questions provided in the Type A meeting request the Company submitted in October 2020 following the CRL. The Company believes the FDA feedback provides a well-defined regulatory path forward. In exchanges with the FDA, the Company proposed potential resolutions to two main concerns identified by the FDA in the CRL: the impact of patch adhesion and the need for patch modifications. The FDA agreed with the Company’s position that a modified Viaskin Peanut patch should not be considered as a new product entity provided the occlusion chamber of the current Viaskin Peanut patch and the peanut protein dose of 250 µg (approximately 1/1000 one peanut) remains unchanged and performs in the same way it has performed previously. In order to confirm the consistency of efficacy data between the existing and modified patches, the FDA has requested an assessment comparing the uptake of allergen (peanut protein) between the patches in peanut allergic children ages 4 to 11 years. The FDA also recommended conducting a 6 -month, well-controlled safety and adhesion trial to assess the modified Viaskin Peanut patch in the intended patient population.
In the second quarter of 2021, the Company completed CHAMP (Comparison of adHesion Among Modified Patches), a trial in healthy adult volunteers to evaluate the adhesion of five modified Viaskin Peanut patches in order to identify the top performers. Based on the adhesion parameters studied, the Company was pleased to learn that all modified Viaskin Peanut patches demonstrated better adhesion performance as compared to the current Viaskin Peanut patch. The Company then selected two modified patches that performed best out of the five modified patches studied for further development.
The difference between the two selected patches is their shape—one is circular and the other is rectangular with rounded corners. They are both approximately 50% larger than the current patch but maintain the same structure of the occlusion chamber (i.e., foam ring and backing). The Company also conducted advisory boards with patient caregivers and key opinion leaders to obtain qualitative feedback on the consumer experience with both patches.
The Company submitted the protocol for STAMP (Safety, Tolerability and Adhesion of Modified Patches), the 6-month adhesion and safety study of the modified patch, to the U.S. Food and Drug Administration (FDA) in the second quarter of 2021 and is currently awaiting feedback.
Earlier this quarter, the Company initiated PREQUAL, a Phase 1 study in healthy adult volunteers to optimize the allergen sample collection methodologies and validate the assays DBV intends to use in EQUAL (EQuivalence in the Uptake of ALlergen). The Company continues to work closely with FDA on how to best demonstrate the protein transport comparability of the modified patch (mVP) to the reference patch (cVP).
Viaskin
TM
Peanut for children ages 4-11 in EuropeOn November 2, 2020, the Company announced that its Marketi
n
gAuthorization Application, or MAA, for Viaskin Peanut had been validated by the European Medicines Agency, or EMA. The validation of the MAA confirmed that the submission was sufficiently complete to begin the formal review process for Viaskin Peanut to treat peanut allergies in children ages 4 to 11 years. The Company received the first set of questions from the EMA, during the first quarter of 2021, which were consistent with the Company’s expectations
7
and prefiling conversations with the EMA. The Company did not receive questions about the impact of adhesion on efficacy. The EMA’s Committee for Medicinal Products for Human Use will provide a recommendation to the European Commission, or EC, on whether to grant a marketing authorization when its review of the Viaskin Peanut MAA is complete.
In July 2021, the Company received from the EMA Day 180 list of outstanding issues. The review of the Viaskin Peanut MAA is progressing according to established EMA processes and ongoing conversations with the EMA.
Many of EMA’s Objections and Major Objections have been answered; One Major Objection remains. The Company will provide a response to address the outstanding issues, including the mentioned Major Objection.
Based on the average length of an EMA evaluation of an MAA, the Company estimates the EMA could issue its decision on potential marketing authorization for Viaskin Peanut in the fourth quarter of 2021 or the first quarter of 2022.
Viaskin Peanut for children ages
1-3
On June 26, 2020, the Company announced
that in Part A, patients in both treatment arms showed consistent treatment effects after 12 months of therapy, as assessed by a double-blind placebo-controlled food challenge and biomarker results. Part A subjects were not included in Part B and the efficacy analyses from Part A were not statistically powered to demonstrate superiority of either dose versus placebo. These results validate the ongoing investigation of the 250 µg dose in this age group, which is the dose being studied in Part B of the study. Enrollment for Part B of EPITOPE was completed in the first quarter of 2021.
Financing
On February 4, 2020, the Company announced the closing of an underwritten global offering of an aggregate of 7,500,000 ordinary shares in (i) a public offering of 4,535,581 ordinary shares in the form of 9,071,162 American Depositary Shares (“ADSs”) in the United States, Canada and certain countries outside Europe at a public offering price of $10.25 per ADS (on the basis of an exchange rate of $1.0999 = €1.00), and (ii) an offering exclusively addressed to qualified investors in Europe (including France) of 2,964,419 ordinary shares at an offering price of €18.63 per ordinary share (together, the “Global Offering”).
On March 2, 2020, the Company announced that the underwriters partially exercised their option to purchase 338,687 additional ordinary shares in the form of 677,374 ADSs at an offering price of $10.25 per ADS, before deducting commissions and estimated offering expenses (the “Option”). The Option closed on March 4, 2020.
Consequently, following partial exercise of the Option, the total number of ordinary shares sold in the global offering was 7,838,687 ordinary shares, including 4,874,268 ordinary shares in the form of 9,748,536 ADSs, bringing the total gross proceeds from the global offering to $160.7 million and net proceeds of $150.0 million.
Restructuring
The Company initiated a global restructuring plan in June 2020 to provide operational latitude to progress in the clinical development and regulatory review of investigational Viaskin Peanut in the United States and European Union. The Company expects full implementation of the organization-wide costs reduction measures to be completed
in
the second half of 2021. The following table summarizes restructuring activities as of June 30, 2021 included in current contingencies and other current liabilities in the statement of financial position:
Restructuring liabilities |
||||
| Restructuring liability - January 1, 2021 |
||||
| Amounts paid |
( |
) | ||
| Other effect including currency translation effect |
( |
) | ||
| |
|
|||
| Restructuring liability – June 30, 2021 |
||||
| |
|
|||
| of which current contingencies |
||||
| of which other current liabilities |
||||
COVID-19
Pandemic On March 11, 2020, the World Health Organization declared
COVID-19
a pandemic. This global health crisis led many countries to impose national containment measures and travel bans. In view of this exceptional situation, the Company decided to take all measures aimed primarily at guaranteeing the safety of its employees and the continuation of ongoing clinical trials, in compliance with the directives of the authorities in each country. The Company has experienced a decrease in new patients enrolling in the ongoing clinical studies and it has had to adapt the protocols of its clinical trials because patients remain subject to travel restrictions. The Company has assessed the impact of the uncertainties created by the pandemic. As of June 30, 2021, those uncertainties were taken into account in the assumptions underlying the estimates and judgments used by the Company. The Company continues to update these estimates and assumptions as the situation evolves. The effects of the
COVID-19
pandemic are presented in the relevant line items of the condensed consolidated statement of financial position and the condensed consolidated statement of operations according to the function or nature of the income or expense. 8
Legal Proceedings
A class action complaint was filed on January 15, 2019 in the United States District Court for the District of New Jersey, entitled Travis The complaint alleged that the Company and its former Chief Executive Officer, its current Chief Executive Officer, and its former Deputy Chief Executive Officer violated certain federal securities laws, specifically under Sections 10(b) and 20(a) of the Exchange Act, and Rule
Ito-Stone
v. DBV Technologies, et al., Case No. 2:19-cv-00525.
10b-5
promulgated thereunder. The plaintiffs seek unspecified damages on behalf of a purported class of purchasers of the Company’s securities between February 14, 2018 and March 16, 2020. On July 29, 2021, immediately after a hearing with the court, the U.S. District Court, District of New Jersey entered an order granting the Company’s Motion to Dismiss the Second Amended Class Action Complaint without prejudice. The Court indicated that the Second Amended Complaint was deficient in a number of ways and granted Plaintiffs until September 30 to amend the complaint to try to cure the deficiencies.
The Company believes that the allegations contained in the amended complaint are without merit and will defend the case vigorously. The Company believes this complaint will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.
Note 3: Cash and Cash Equivalents
The following tables summarize the cash and cash equivalents as of June 30, 2021 and December 31, 2020:
June 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
| Cash |
||||||||
| Cash equivalents |
||||||||
| |
|
|
|
|||||
| Total cash and cash equivalents as reported in the statements of financial position |
||||||||
| |
|
|
|
|||||
Cash equivalents are immediately convertible into cash at no or insignificant cost, on demand. They are measured using level 1 fair value measurements.
Note 4: Trade Payables and Other Current Liabilities
4.1 Trade Payables
No discounting was performed on the trade payables to the extent that the amounts did not present payment terms longer than one year at the end of each fiscal period presented.
4.2 Other Liabilities
The following tables summarize the other liabilities as of June 30, 2021 and December 31, 2020:
June 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
| Other current liabilities |
||||||||
| Other non-current liabilities |
||||||||
| |
|
|
|
|||||
| Total |
||||||||
| |
|
|
|
|||||
9
The following table summarizes the other liabilities by nature as of June 30, 2021 and December 31, 2020:
June 30, |
December 31, |
|||||||||||||||
2021 |
2020 |
|||||||||||||||
Other current liabilities |
Other non-current liabilities |
Total | Total | |||||||||||||
| Employee related liabilities |
||||||||||||||||
| Deferred income |
||||||||||||||||
| Tax liabilities |
— |
|||||||||||||||
| Other debts |
— |
|||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
The other current liabilities include debt to employees including employee termination allowance and benefits as part of the restructuring (refer to Note 2, “Significant Events and Transactions of the Period – Restructuring”), bonus accruals, and social welfare and tax agency obligations.
Deferred income from the collaboration agreement with Nestlé Health Science amounted to $6.7 million as of June 30, 2021.
Note 5: Shareholders’ equity
The share capital as of June 30, 2021 is set at the sum of €5,501,168.70 ($6,528,543 converted at historical rates). It is divided into 55,011,687 fully authorized, subscribed and 0.10 .
paid-up
shares with a par value of €During the six months ended June 30, 2021, the capital increase of approximately $10,000 is linked to the issuance of an aggregate of 82,500 shares pursuant to the exercise of warrants.
Pursuant to the authorization granted by the General Meeting of the Shareholders held on May 19, 2021, the accumulated net losses of DBV Technologies S.A. after appropriation of the net result for the year ended December 31, 2020 have been allocated to additional 695,575,130.36 ($797,822,881 converted at historical rates).
paid-in
capital in the amount of €Note 6: Share-Based Payments
The Board of Directors has been authorized by the General Meeting of the Shareholders to grant restricted stock units (“RSU”), stock options plan (“SO”), employee warrants (or “BSPCE”) and or “BSA”).
Bons de Souscription de Parts de Créateur d’Entreprise
non-employee
warrants (Bons de Souscription d’Actions
During the six months ended June 30, 2021, the Company granted 75,600 stock options and 44,900 restricted stock units to employees. There have been no changes in the vesting conditions and method of valuation of the SO and RSUs from that disclosed in Note 14 to the consolidated financial statements included in the Annual Report.
| Stock option fair value assumptions during the six months ended June 30, 2021 |
||||
| Weighted average share price at grant date in € |
||||
| Weighted average expected volatility |
% | |||
| Weighted average risk-free interest rate |
( |
)% | ||
| Weighted average expected term (in years) |
||||
| Dividend yield |
||||
| Weighted average fair value of stock options in € |
||||
During the six months ended June 30, 2021, pursuant to the authorization granted by the General Meeting of the Shareholders held on May 19, 2021, the Company offered the directors the opportunity to subscribe for warrants to purchase ordinary shares on May 19, 2021, and on June 3, 2021, the directors subscribed for warrants to purchase an aggregate of 39,185 4 years from their date of issuance and are not subject to a performance condition. Unless otherwise decided by the Board of Directors, these warrants may be exercised at any time prior to their expiration, provided that the beneficiary still holds a seat on the Board of Directors at the time of exercise, and subject to applicable French laws and regulations applicable to companies whose securities are listed on a regulated stock market. The fair value of the warrants has been estimated unsing the
Cox-Ross
Rubinstein binomial option pricing model.10
| Warrant fair value assumptions during the six months ended June 30, 2021 |
||||
| Weighted average share price at grant date in € |
||||
| Weighted average expected volatility |
% | |||
| Weighted average risk-free interest rate |
( |
)% | ||
| Weighted average expected term (in years) |
||||
| Dividend yield |
||||
| Weighted average fair value of warrants in € |
||||
The changes in number of BSA/BCE/SO/RSU are as follows:
Number of outstanding |
||||||||||||||||
BSA |
BCE |
SO |
RSUs |
|||||||||||||
| Balance as of December 31, 2020 |
||||||||||||||||
| Granted during the period |
— | |||||||||||||||
| Forfeited during the period |
— | — | ( |
) | ( |
) | ||||||||||
| Exercised/released during the period |
( |
) | — | — | ||||||||||||
| Expired during the period |
( |
) | — | — | — | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Balance as of June 30, 2021 |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Share-based payments expenses reflected in the condensed consolidated statements of operations is as follows:
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||
| |
2021 |
2020 |
2021 |
2020 |
||||||||||||||||
| Research & development |
SO | ( |
) | ( |
) | |||||||||||||||
| RSU | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Sales & marketing |
SO | ( |
) | ( |
) | |||||||||||||||
| RSU | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| General & administrative |
SO | ( |
) | ( |
) | |||||||||||||||
| RSU | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Total share-based compensation (expense) |
( |
) |
( |
) |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
Note 7: Contingencies
The following tables summarize the contingencies as of June 30, 2021 and December 31, 2020:
June 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
| Current contingencies |
||||||||
| Non-current contingencies |
||||||||
| |
|
|
|
|||||
| Total contingencies |
||||||||
| |
|
|
|
|||||
11
The changes in contingencies are as follows:
Pension retirement obligations |
Collaboration agreement - Loss at completion |
Other contingencies |
Total |
|||||||||||||
| At January 1, 2021 |
||||||||||||||||
| 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 |
— | — | ||||||||||||||
| Other effects including currency translation effect |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| At June 30, 2021 |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Of which current |
— |
|||||||||||||||
| Of which non-current |
— |
|||||||||||||||
In 2020 and during the first six months of 2021, the ongoing
COVID-19
pandemic impacted the Company’s current clinical trials, including the Phase II clinical trial conducted as part of the development activities pursuant to the collaboration and license agreement with Nestlé Health Science. The Company experienced difficulties in enrolling new patients in this Phase II clinical trial, or PII, and modified the protocols of the clinical trial. As a result of the accumulation of recruitment delays, the Company expects to incur additional clinical and production costs related to the Phase II clinical trial. As of June 30, 2021, the Company recorded its collaboration agreements’s revenue based on its updated measurement of progress of the Phase II clinical trial conducted as part of the agreement. The accrual recorded in the amount of the difference between the Company’s current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase II clinical trial has been updated accordingly.
Other contingencies are primarily composed of the estimated expenses to be incurred as part of the employee-related costs related to restructuring, as well as estimated cost of refurbishing lease premises (Refer to Note 2, “Significant Events and Transactions—Restructuring”).
There have been no significant changes in assumptions for the estimation of the retirement commitments from those disclosed in Note 15 to the consolidated financial statements included in the Annual Report.
Note 8: Operating income
The following table summarizes the operating income during the three and six months ended June 30, 2021 and 2020:
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
| Research tax credit |
||||||||||||||||
| Other operating income |
( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
( |
) |
||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
In 2020 and during the first six months of 2021, the ongoing
COVID-19
pandemic impacted the Company’s current clinical trials, including the Phase II clinical trial conducted as part of the development activities pursuant to the collaboration and license agreement with Nestlé Health Science. The Company experienced difficulties in enrolling new patients in this Phase II clinical trial and modified the protocols of the clinical trial. As a result of the accumulation of recruitment delays, the Company expects to incur additional clinical and production costs related to the Phase II clinical trial. 12
As of June 30, 2021, the Company recorded its collaboration agreement’s revenue based on its
updated measurement of progress of the Phase II clinical trial conducted as part of the agreement. The accrual recorded in the amount of the difference between the Company’s current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase II clinical trial has been updated accordingly.
Note 9: Allocation of Personnel Expenses
The Company had an average of 111 employees during the six months ended June 30, 2021, in comparison with an average of 311 employees during the six months ended June 30, 2020.
The following table summarizes the allocation of personnel expenses by function during the three and six months ended June 30, 2021 and 2020:
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
| Research and Development expenses |
||||||||||||||||
| Sales and Marketing expenses |
( |
) | ||||||||||||||
| General and Administrative expenses |
||||||||||||||||
| Restructuring |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total personnel expenses |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
The following table summarizes the allocation of personnel expenses by nature during the three six months ended June 30, 2021 and 2020:
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
| Wages and salaries |
||||||||||||||||
| Social security contributions |
||||||||||||||||
| Expenses for pension commitments |
( |
) | ||||||||||||||
| Employer contribution to bonus shares |
( |
) | ( |
) | ||||||||||||
| Share-based payments |
( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
The decrease in personnel expenses is mainly due to a decreased headcount as well as reductions in accrued bonuses, retention measures and share-based compensation expenses, mainly as a result of the 2020 global restructuring plan.
Note 10: Commitments
There have been no significant changes in other commitments from those disclosed in Note 19 to the consolidated financial statements included in the Annual Report.
Note 11: Relationships with Related Parties
The Company’s related parties consist exclusively of the members of the Board of Directors and the members of the Executive Committee. As of June 30, 2021, the total amount of remuneration granted to the members of the Board of Directors and Executive Committee has not changed significantly since December 31, 2020 .
Pursuant to the authorization granted by the General Meeting of the Shareholders held on May 19, 2021, the Company offered its directors the opportunity to subscribe for warrants to purchase ordinary shares on May 19, 2021, and on June 3, 2021, the directors subscribed for warrants to purchase an aggregate of 39,185
Share-Based Payments
13
There were no other new significant related-party transactions during the period nor any change in the nature of the transactions from those described in Note 20 to the consolidated financial statements included in the Annual Report.
Note 12: Loss Per Share
Basic loss per share is calculated by dividing the net loss attributable to the shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. As the Company was in a loss position for each of the three and six month periods ended June 30, 2021 and 2020, the diluted loss per share is equal to basic loss per share because the effects of potentially dilutive shares were anti-dilutive as a result of the Company’s net loss.
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
| Non-employee warrants |
||||||||||||||||
| Employee warrants |
||||||||||||||||
| Stock options |
||||||||||||||||
| Restricted stock units |
||||||||||||||||
Note 13: Events after the Close of the Period
The Company evaluated subsequent events that occurred after June 30, 2021, through the date the condensed consolidated financial statements were issued after their approval by the Board of Directors on July 30, 2021 and determined that there are no significant events that require adjustments or disclosure in such condensed consolidated financial statements.
14
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, 2020, included in our Annual Report on Form
10-K
for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 17, 2021, 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 EPIT
TM
, our proprietary method of delivering biologically active compounds to the immune system through intact skin using Viaskin. We have generated significant data demonstrating that Viaskin’s mechanism of action is novel and differentiated, as it targets specific antigen-presenting immune cells in the skin, called Langerhans cells, that capture the antigen and migrate to the lymph node in order to activate the immune system without passage of the antigen into the bloodstream, minimizing systemic exposure in the body. We are advancing this unique technology to treat patients, including infants and children, suffering from food allergies, for whom safety is paramount, since the introduction of the offending allergen into their bloodstream can cause severe or life-threatening allergic reactions, such as anaphylactic shock. Viaskin Peanut in the United States
On January 13, 2021, we received written responses from the FDA to questions provided in the Type A meeting request, we submitted in October 2020 following the CRL. We believe the FDA feedback provides a well-defined regulatory path forward. In exchanges with the FDA, we proposed potential resolutions to two main concerns identified by the FDA in the CRL: the impact of patch adhesion and the need for patch modifications. The FDA agreed with our position that a modified Viaskin Peanut patch should not be considered as a new product entity provided the occlusion chamber of the current Viaskin Peanut patch and the peanut protein dose of 250 µg (approximately 1/1000 of a peanut) remains unchanged and performs in the same way it has performed previously. In order to confirm the consistency of efficacy data between the existing and modified patches, the FDA has requested an assessment comparing the uptake of allergen (peanut protein) between the patches in peanut allergic children ages 4 to 11 years. The FDA also recommended conducting a 6-month, well-controlled safety and adhesion trial to assess the modified Viaskin Peanut patch in the intended patient population.
In the second quarter of 2021, we completed CHAMP (Comparison of adHesion Among Modified Patches), a trial in healthy adult volunteers to evaluate the adhesion of five modified Viaskin Peanut patches in order to identify the top performers. Based on the adhesion parameters studied, we were pleased to learn that all modified Viaskin Peanut patches demonstrated better adhesion performance as compared to the current Viaskin Peanut patch. We then selected two modified patches that performed best out of the five modified patches studied for further development.
The difference between the two selected patches is their shape—one is circular and the other is rectangular with rounded corners. They are both approximately 50% larger than the current patch but maintain the same structure of the occlusion chamber (i.e., foam ring and backing). We also conducted advisory boards with patient caregivers and key opinion leaders to obtain qualitative feedback on the consumer experience with both patches.
We submitted the protocol for STAMP (Safety, Tolerability and Adhesion of Modified Patches), the 6-month adhesion and safety study of the modified patch, to the U.S. Food and Drug Administration (FDA) in the second quarter of 2021 and are currently awaiting feedback.
Earlier this quarter, we initiated PREQUAL, a Phase 1 study in healthy adult volunteers to optimize the allergen sample collection methodologies and validate the assays DBV intends to use in EQUAL (EQuivalence in the Uptake of ALlergen). We continue to work closely with the FDA on how to best demonstrate the protein transport comparability of the modified patch (mVP) to the reference patch (cVP).
ViaskinTM Peanut in Europe
During the first quarter of 2021, we received the first set of questions from the European Medicines Agency, or EMA, regarding the Marketing Authorization Application, or MAA, for Viaskin Peanut as a treatment for peanut allergy in children ages 4-11.. The questions were consistent with our expectations and prefiling conversations with the EMA. We did not receive questions about the impact of adhesion on efficacy. The EMA’s Committee for Medicinal Products for Human Use will provide a recommendation to the European Commission, or EC, on whether to grant a marketing authorization when its review of the Viaskin Peanut MAA is complete.
The European Medicines Agency (EMA) review of the Viaskin Peanut Marketing Authorization Application (MAA) is progressing according to established EMA processes and ongoing conversations with the EMA.
In July 2021, we received from the EMA Day 180 list of outstanding issues. The review of the Viaskin Peanut MAA is progressing according to established EMA processes and ongoing conversations with the EMA.
Many of EMA’s Objections and Major Objections have been answered; One Major Objection remains. We will provide a response to address the outstanding issues, including the mentioned Major Objection.
Based on the average length of an EMA evaluation of an MAA, we estimate the EMA could issue its decision on potential marketing authorization for Viaskin Peanut in the fourth quarter of 2021 or the first quarter of 2022.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the 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 Condensed Consolidated Financial Statements in Part I, Item 1 of our Annual Report.
15
Results of Operations
Comparison of the Three Months Ended June 30, 2021 and 2020
The following table summarizes our results of operations, derived from our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and presented in thousands of U.S. Dollars, for the three months ended June 30, 2021 and 2020.
Three months ended June 30, |
$ change |
% change |
||||||||||||||
2021 |
2020 |
|
|
|||||||||||||
| Operating income |
$ |
(1,488 |
) |
$ |
3,610 |
(5,098 |
) |
(141 |
)% | |||||||
| Operating expenses |
||||||||||||||||
| Research and development expenses |
(20,179 | ) | (21,932 | ) | 1,753 | (8 | )% | |||||||||
| Sales and marketing expenses |
(1,198 | ) | 778 | (1,976 | ) | (254 | )% | |||||||||
| General and administrative expenses |
(8,269 | ) | (8,862 | ) | 593 | (7 | )% | |||||||||
| Restructuring expenses |
— | (21,288 | ) | 21,288 | (100 | )% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Operating expenses |
(29,646 | ) | (51,305 | ) | 21,658 | (42 | )% | |||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Financial income (expense) |
46 | (506 | ) | 552 | (109 | )% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Income tax |
434 | (3 | ) | 436 | * | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net loss |
$ |
(30,654 |
) |
$ |
(48,203 |
) |
17,549 |
(36 |
)% | |||||||
| |
|
|
|
|
|
|
|
|||||||||
| * | Percentage not meaningful |
Operating Income
The following table summarizes our operating income during the three months ended June 30, 2021 and 2020:
Three months ended June 30, |
$ change |
% change |
||||||||||||||
2021 |
2020 |
|
|
|||||||||||||
| Sales |
— | — | — | — | ||||||||||||
| Other income |
(1,488 | ) | 3,610 | (5,098 | ) | (141 | )% | |||||||||
| Research tax credit |
1,870 |
2,899 |
(1,028 | ) | (35 | )% | ||||||||||
| Other operating income |
(3,358 |
) |
712 |
(4,070 | ) | (572 | )% | |||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating income |
(1,488 |
) |
3,610 |
(5,098 |
) |
(141 |
)% | |||||||||
| |
|
|
|
|
|
|
|
|||||||||
Our operating income is primarily generated from the French research tax credit (, or “CIR”), and by the revenue recognized under our collaboration agreement with Nestlé Health Science. We generated operating income of $(1.5) million during the three months ended June 30, 2021 compared to $3.6 million during the three months ended June 30, 2020. The decrease in operating income is primarily attributable to the change in 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 due to delays in new patient enrollment. The decrease in research tax credit is attributable to the decline of eligible expenses in connection with Research and Development costs.
Crédit d’Iimpôt Recherche
16
Research and Development Expenses
The following table summarizes our research and development expenses incurred during the during the three months ended June 30, 2021 and 2020:
Three Months Ended June 30, |
$ change |
% change |
||||||||||||||
2021 |
2020 |
|
|
|||||||||||||
| Research and Development expenses |
||||||||||||||||
| External clinical-related expenses |
9,808 | 16,211 | (6,403 | ) | (39 | )% | ||||||||||
| Employee-related costs |
3,206 | 3,998 | (792 | ) | (20 | )% | ||||||||||
| Share-based payment expenses |
187 | (1,892 | ) | 2,079 | (110 | )% | ||||||||||
| Depreciation, amortization and other costs |
6,978 | 3,615 | 3,363 | (93 | )% | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Research and Development expenses |
20,179 |
21,932 |
(1,753 |
) |
(8 |
)% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Research and Development expenses decreased by $1.8 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to a decrease in external clinical-related expenses as a result of budget discipline measures . Employee-related costs, excluding share-based payment expenses, decreased by $0.8 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 directly related to the workforce reduction we implemented as part of our 2020 global restructuring plan.
The shared-based payment income recognized for the three months ended June 30, 2020 was triggered by the reversal of share-based payment expenses due to employees’ departures in the context of our restructuring plan.
The increase of depreciation, amortization and other expenses relates primarily to the change in the second quarter of 2021 in the accrual recorded in the amount of the difference between our current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase II clinical trial conducted as part of the Nestlé agreement.
Sales and Marketing expenses
The following table summarizes our sales and marketing expensesincurred during the during the three months ended June 30, 2021 and 2020:
Three Months Ended June 30, |
$ change |
% change |
||||||||||||||
2021 |
2020 |
|
|
|||||||||||||
| Sales and Marketing expenses |
||||||||||||||||
| External professional services |
307 | 479 | (172 | ) | (36 | )% | ||||||||||
| Employee-related costs |
430 | 1,105 | (676 | ) | (61 | )% | ||||||||||
| Share-based payment expenses |
89 | (2,470 | ) | 2,559 | 104 | % | ||||||||||
| Depreciation, amortization and other costs |
373 | 107 | 265 | 247 | % | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Sales and Marketing expenses |
1,198 |
(778 |
) |
1,976 |
254 |
% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Sales and marketing expenses amounted to $1.2 million for the three months ended June 30, 2021, compared to $(0.8) million for the three months ended June 30, 2020.
The shared-based payment income recognized for the three months ended June 30, 2020 was triggered by the reversal of share-based payment expense due to employees’ departures in the context of our 2020 global restructuring plan.
The increase in share-based payment expense for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was partly offset by the decrease in employee-related costs, directly related to the workforce reduction implemented as part of our restructuring plan. The decrease in external professional services for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 is directly related to budget discipline measures taken.
17
General and Administrative expenses
The following table summarizes our general and administrative expenses incurred during the during the three months ended June 30, 2021 and 2020:
Three Months Ended June 30, |
$ change |
% change |
||||||||||||||
2021 |
2020 |
|
|
|||||||||||||
| General and Administrative expenses |
||||||||||||||||
| External professional services |
1,922 | 4,807 | (2,884 | ) | (60 | )% | ||||||||||
| Employee-related costs |
2,180 | 2,376 | (196 | ) | (8 | )% | ||||||||||
| Share-based payment expenses |
819 | (1,602 | ) | 2,421 | (151 | )% | ||||||||||
| Depreciation, amortization and other costs |
3,348 | 3,281 | 67 | 2 | % | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total General and Administrative expenses |
8,269 |
8,862 |
(593 |
) |
(7 |
)% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
General and Administrative expenses decreased by $0.6 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 primarly due to cost containment measures and decreased external professional fees.
The share-based payment income recognized for the three months ended June 30, 2020 was triggered by the reversal of share-based payment expense due to employees’ departures in the context of our 2020 global restructuring plan.
The decrease in employee-related costs, excluding share-based payments expenses, was directly related to the workforce reduction we implemented as part of our restructuring plan.
Restructuring
We initiated a global restructuring plan in June 2020 to provide operational latitude to progress in the clinical development and regulatory review of investigational Viaskin
™
Peanut in the United States and European Union. For the three months ended June 30, 2021, our average headcount was 99, compared to 306 for the three months ended June 30, 2020. As of June 30, 2021, we had 97 employees. We expect full implementation of the organization-wide cost reduction measures to be completed in the second half of 2021.
The restructuring costs were mainly comprised of payroll expenses, restructuring-related consulting and legal fees, as well as impairment of facilities and right of use assets following resizing of facilities.
There were no restructuring costs for three months ended June 30, 2021.
Financial income (expense)
Our financial income was approximately $46,000 for the three months ended June 30, 2021 compared to a financial expense of $0.5 million for the three months ended June 30, 2020. This item mainly includes foreign exchange income and expenses.
Income tax
Our income tax profit was $0.4 million for the three months ended June 30, 2021. This profit mainly resulted from U.S. tax refunds.
Net loss
Net loss was $30.7 million for the three months ended June 30, 2021, compared to $48.2 million for the three months ended June 30, 2020. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.56 and $0.88 for the three months ended June 30, 2021 and 2020, respectively.
18
Results of Operations
Comparison of the Six Months Ended June 30, 2021 and 2020
The following table summarizes our results of operations, derived from our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and presented in thousands of U.S. Dollars, for the six months ended June 30, 2021 and 2020.
Six months ended June 30, |
$ change |
% change |
||||||||||||||
2021 |
2020 |
|
|
|||||||||||||
| Operating income |
$ |
1,453 |
$ |
8,330 |
(6,877 |
) |
(83 |
)% | ||||||||
| Operating expenses |
||||||||||||||||
| Research and development expenses |
(42,343 | ) | (49,464 | ) | 7,121 | (14 | )% | |||||||||
| Sales and marketing expenses |
(1,927 | ) | (6,519 | ) | 4,592 | (70 | )% | |||||||||
| General and administrative expenses |
(17,951 | ) | (19,975 | ) | 2,024 | (10 | )% | |||||||||
| Restructuring expenses |
— | (21,288 | ) | 21,288 | (100 | )% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Operating expenses |
(62,221 | ) | (97,246 | ) | 35,025 | (36 | )% | |||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Financial income (expense) |
261 | (196 | ) | 457 | (233 | )% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Income tax |
404 | (3 | ) | 407 | * | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net loss |
$ |
(60,103 |
) |
$ |
(89,115 |
) |
29,013 |
(33 |
)% | |||||||
| |
|
|
|
|
|
|
|
|||||||||
| * | Percentage not meaningful |
Operating Income
The following table summarizes our operating income during the six months ended June 30, 2021 and 2020:
Six months ended June 30, |
$ change |
% change |
||||||||||||||
2021 |
2020 |
|
|
|||||||||||||
| Sales |
— | — | ||||||||||||||
| Other income |
1,453 | 8,330 | (6,877 | ) | (83 | )% | ||||||||||
| Research tax credit |
3,677 | 5,800 |
(2,123 | ) | (37 | )% | ||||||||||
| Other operating income |
(2,225 | ) | 2,529 |
(4,754 | ) | (188 | )% | |||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating income |
1,453 |
8,330 |
(6,877 |
) |
(83 |
)% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Our operating income was primarily generated from the French research tax credit (or “CIR”) and from revenue recognized under our collaboration agreement with Nestlé Health Science. We generated operating income of $1.5 million during the six months ended June 30, 2021, compared to $8.3 million during the six months ended June 30, 2020. The decrease in operating income is primarily attributable to the change in 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 due to delays in new patient enrollment.
Crédit d’Impôt Recherche
The decrease in research tax credit is attributable to the decline in eligible expenses in connection with Research and Development costs.
Research and Development Expenses
The following table summarizes our research and development expenses incurred during the six months ended June 30, 2021 and 2020:
Six Months Ended June 30, |
$ change |
% change |
||||||||||||||
2021 |
2020 |
|
|
|||||||||||||
| Research and Development expenses |
||||||||||||||||
| External clinical-related expenses |
22,686 | 29,319 | (6,633 | ) | (23 | )% | ||||||||||
| Employee-related costs |
7,297 | 12,934 | (5,637 | ) | (44 | )% | ||||||||||
| Share-based payment expenses |
814 | (624 | ) | 1,438 | (231 | )% | ||||||||||
| Depreciation, amortization and other costs |
11,546 | 7,834 | 3,712 | 47 | % | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Research and Development expenses |
42,343 |
49,464 |
(7,121 |
) |
(14 |
)% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
19
Research and Development expenses decreased by $7.1 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 primarly due to a decrease in external clinical-related expenses as a result of budget discipline measures . Employee-related costs, excluding share-based payments expenses, decreased by $5.6 million for the six months ended June 30, 2021, compared to the six months ended June 30, 2020 directly related to the workforce reduction we implemented as part of our 2020 global restructuring plan.
The shared-based payment income recognized for the six months ended June 30, 2020 was triggered by the reversal of share-based payment expenses due to employees’ departures in the context of our restructuring plan.
The increase in depreciation, amortization and other expenses relates primarily to the change in the second quarter of 2021 in the accrual recorded in the amount of the difference between our current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase II clinical trial conducted as part of the Nestlé agreement.
Sales and Marketing expenses
The following table summarizes our sales and marketing expenses incurred during the during the six months ended June 30, 2021 and 2020:
Six Months Ended June 30, |
$ change |
% change |
||||||||||||||
2021 |
2020 |
|
|
|||||||||||||
| Sales and Marketing expenses |
||||||||||||||||
| External professional services |
391 | 3,121 | (2,729 | ) | (87 | )% | ||||||||||
| Employee-related costs |
877 | 4,702 | (3,826 | ) | (81 | )% | ||||||||||
| Share-based payment expenses |
159 | (1,870 | ) | 2,029 | (109 | )% | ||||||||||
| Depreciation, amortization and other costs |
500 | 566 | (66 | ) | (12 | )% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Sales and Marketing expenses |
1,927 |
6,519 |
(4,592 |
) |
(70 |
)% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Sales and marketing expenses decreased by $4.6 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarly due to a decrease in external professional services as a result of budget discipline measures . Employee-related costs, excluding share-based payments expenses, decreased by $3.8 million for the six months ended June 30, 2021, compared to the six months ended June 30, 2020 directly related to the workforce reduction we implemented as part of our 2020 global restructuring plan.
The shared-based payment income recognized for the six months ended June 30, 2020 was triggered by the reversal of share-based payment expenses due to employees’ departures in the context of our restructuring plan.
General and Administrative expenses
The following table summarizes our general and administrative expenses incurred during the during the six months ended June 30, 2021 and 2020:
Six Months Ended June 30, |
$ change |
% change |
||||||||||||||
2021 |
2020 |
|
|
|||||||||||||
| General and Administrative expenses |
||||||||||||||||
| External professional services |
4,210 | 8,854 | (4,644 | ) | (52 | )% | ||||||||||
| Employee-related costs |
5,211 | 5,455 | (244 | ) | (4 | )% | ||||||||||
| Share-based payment expenses |
1,554 | (397 | ) | 1,951 | 491 | % | ||||||||||
| Depreciation, amortization and other costs |
6,977 | 6,064 | 913 | 15 | % | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total General and Administrative expenses |
17,951 |
19,975 |
(2,024 |
) |
(10 |
)% | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
General and Administrative expenses decreased by $2.0 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to cost containment measures and decreased external professional fees.
The share-based payment income recognized for the six months ended June 30, 2020 was triggered by the reversal of share-based payment expense due to employees’ departures in the context of our 2020 global restructuring plan.
The decrease in employee-related costs, excluding share-based payment expenses, is directly related to the workforce reduction we implemented as part of our restructuring plan.
20
Restructuring
We initiated a global restructuring plan in June 2020 to provide operational latitude to progress the clinical development and regulatory review of investigational Viaskin
™
Peanut in the United States and European Union. For the six months ended June 30, 2021, our average headcount was 111 compared to 311 for the six months ended June 30, 2020. As of June 30, 2021, we had 97 employees. We expect full implementation of the organization-wide costs reduction measures to be completed in the second half of 2021.
The restructuring costs were mainly comprised of payroll expenses, restructuring-related consulting and legal fees, as well as impairment of facilities and right of use assets following resizing of facilities.
There were no restructuring costs for six months ended June 30, 2021.
Financial income (expense)
Our financial income was $0.3 million for the six months ended June 30, 2021 compared to a financial expense of $0.2 million for the six months ended June 30, 2020. This item mainly includes foreign exchange income (expense).
Income tax
Our income tax profit was $0.4 million for the six months ended June 30, 2021. This income tax profit mainly resulted from US tax refunds.
Net loss
Net loss was $60.1 million for the six months ended June 30, 2021, compared to $89.1 million for the six months ended June 30, 2020. Net loss per share (based on the weighted average number of shares outstanding over the period) was $1.09 and $1.67 for the six months ended June 30, 2021 and 2020, respectively.
Summary Statement of Cash Flows
The table below summarizes our sources and uses of cash for the six months ended June 30, 2021 and 2020.
Six months ended June 30, |
$ change |
% of change |
||||||||||||||
(Amounts in thousands of U.S. Dollars) |
2021 |
2020 |
|
|
||||||||||||
| Net cash flow used in operating activities |
(66,503 | ) | (89,848 | ) | 23,345 | (26 | )% | |||||||||
| Net cash flow used in investing activities |
(13 | ) | (1,450 | ) | 1,437 | (99 | )% | |||||||||
| Net cash flow provided by financing activities |
1,071 | 150,672 | (149,601 | ) | (99 | )% | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents |
(5,423 | ) | 289 | (5,712 | ) | * | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net (decrease) increase in cash and cash equivalents |
(70,868 |
) |
59,663 |
(130,531 |
) |
(219 |
)% | |||||||||
| |
|
|
|
|
|
|
|
|||||||||
| * | Percentage not meaningful |
Operating Activities
Our net cash flows used in operating activities were $66.5 million and $89.8 million during the six months ended June 30, 2021 and 2020, respectively. Our net cash flows used in operating activities decreased by $23.3 million, or 26.1%, mainly due to cost containment measures and the decrease in personnel expenses related to the workforce reduction as part of our global restructuring plan. Cash flows used in operating activities for the six months ended June 30, 2021 includes restructuring costs paid for $6.3 million.
Investing Activities
Our net cash flows used in investing activities was approximately $13,000 and $1.5 million during the six months ended June 30, 2021 and 2020, respectively.
Financing Activities
Our net cash flows provided by financing activities decreased to $1.1 million during the six months ended June 30, 2021 from $150.7 million during the six months ended June 30, 2020. Financing activities consisted mainly of our underwritten global offering in the first quarter of 2020.
Based on our current assumptions, we expect that our current cash and cash equivalents will support our operations for at least 12 months and until the second half of 2022.
21
Contractual Obligations and Other Commitments
There have been no material changes in our contractual obligations and commitments from those disclosed in the Annual Report.
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
Our market risks have not changed materially from those disclosed in Item 7A of the Annual Report.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Based on its evaluation as of June 30, 2021, 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.
22
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.
Item 1A. Risk Factors
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 three months ended June 30, 2021, we granted 20,000 restricted stock units to employees in France.
During the three months ended June 30, 2021, pursuant to the authorization granted by the General Meeting of our Shareholders held on May 19, 2021, we offered our directors the opportunity to subscribe for warrants to purchase ordinary shares on May 19, 2021, and on June 3, 2021, the directors subscribed for warrants to purchase an aggregate of 39,185 ordinary shares .
During the three months ended June 30, 2021, we issued 75,000 ordinary shares following the exercise of warrants by a former in France, for proceeds of $468,700.
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.
23
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) | |||||||||||||||||
| 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 | Inline X BRL Instance Document |
|||||||||||||||||
| 101.SCH | Inline X BRL Taxonomy Extension Schema Document |
|||||||||||||||||
| 101.CAL | Inline X BRL Taxonomy Extension Calculation Linkbase Document |
|||||||||||||||||
| 101.DEF | Inline X BRL Taxonomy Extension Definition Linkbase Document |
|||||||||||||||||
| 101.LAB | Inline X BRL Taxonomy Extension Labels Linkbase Document |
|||||||||||||||||
| 101.PRE | Inline X BRL 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 incorporation language contained in such filing. |
24
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: August 2, 2021 | By: /s/ Daniel Tassé | |
| Daniel Tassé | ||
Chief Executive Officer | ||
(Principal Executive officer) | ||
| Date: August 2, 2021 | By: /s/ Sébastien Robitaille | |
| Sébastien Robitaille | ||
Chief Financial Officer | ||
(Principal Financial and Accounting) | ||
25