6-K
Inventiva S.A. (IVA)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TORULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2022
Commission File Number: 001-39374
InventivaS.A.(Translation of registrant's name into English)
50rue de Dijon21121 Daix France+33 3 80 44 75 00(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
**Note:**Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
**Note:**Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Incorporation by reference
On September 21, 2022, the Registrant issued a press release (the “Press Release”) to announce that it had entered into a licensing and collaboration agreement with Chia Tai-Tianqing Pharmaceutical Group Co., Ltd. A copy of the Press Release is attached to this Report on Form 6-K (the “Report”) as exhibit 99.1.
On September 22, 2022, the Registrant issued the Interim Financial Report for the Six Months Ended June 30, 2022 (the “Interim Financial Report”). A copy of the Interim Financial Report is attached to this Report as exhibit 99.2.
On September 22, 2022, the Registrant also issued an earnings release (the “Earnings Release”). A copy of the Earnings Release is attached to this Report as exhibit 99.3.
Exhibit 99.2 to this Report shall be deemed to be incorporated by reference into the registration statement on Form F-3 (File No. 333-258369) of Inventiva S.A. (including any prospectuses forming a part of such registration statement) and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.
Exhibits 99.1 and 99.3 to this Report are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
Business Update Conference Call
As previously announced, a conference call will be held on September 22, 2022, at 8:00 am ET (2:00 pm CET). The conference call and the slides of the presentation will be webcast live at: https://edge.media-server.com/mmc/p/v5uzhkr8 and also available on Inventiva’s website in the “Investors” – “Financial results” section.
A replay of the conference call and the presentation will be available after the event at: http://inventivapharma.com/investors/financial-results-presentations/.
Cautionarynote on forward-looking statements
This report on Form 6-K contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this Form 6-K are forward-looking statements. These statements include, but are not limited to, forecasts and estimates with respect to Inventiva’s pre-clinical programs and clinical trials, including recruitment, screening and enrolment for those trials, including the LEGEND trial for the treatment of NAFLD, the NATiV3 Phase III clinical trial with lanifibranor in NASH, the investigator-initiated Phase II trial of lanifibranor in patients with NAFLD and T2D, and the expected Phase IIb clinical trial of cedirogant led by AbbVie, potential development of and regulatory pathway for odiparcil, clinical trial data releases and publications, the information, insights and impacts that may be gathered from clinical trials, the potential therapeutic benefits of lanifibranor generally and in combination with empagliflozin, the design of trials and any potential amendments to trial design and the anticipated benefits related thereto, Inventiva’s agreement with Sino Biopharm, including expectations with respect to enrollment of patients in Greater China in the NATiV3 trial or an independent trial, pipeline and preclinical and clinical development plans, milestone payments, royalties and product sales, potential proceeds under the Company’s financing arrangements, future activities, expectations, plans, growth and prospects of Inventiva and the sufficiency of Inventiva’s cash resources and cash runway. Certain of these statements, forecasts and estimates can be recognized by the use of words such as, without limitation, “believes”, “anticipates”, “expects”, “intends”, “plans”, “seeks”, “estimates”, “may”, “will”, “would”, “could”, “might”, “should”, “plans”, “designed”, “hopefully”, “target”, “aim”, and “continue” and similar expressions. Such statements are not historical facts but rather are statements of future expectations and other forward-looking statements that are based on management's beliefs. These statements reflect such views and assumptions prevailing as of the date of the statements and involve known and unknown risks and uncertainties that could cause future results, performance or future events to differ materially from those expressed or implied in such statements. Future events are difficult to predict and may depend upon factors that are beyond Inventiva's control. There can be no guarantees with respect to pipeline product candidates that the clinical trial results will be available on their anticipated timeline, that future clinical trials will be initiated as anticipated, that product candidates will receive the necessary regulatory approvals, or that any of the anticipated milestones by Inventiva or its partners will be reached on their expected timeline, or at all. Actual results may turn out to be materially different from the anticipated future results, performance or achievements expressed or implied by such statements, forecasts and estimates, due to a number of factors, including that Inventiva is a clinical-stage company with no approved products and no historical product revenues, Inventiva has incurred significant losses since inception, Inventiva has a limited operating history and has never generated any revenue from product sales, Inventiva will require additional capital to finance its operations, Inventiva's future success is dependent on the successful clinical development, regulatory approval and subsequent commercialization of current and any future product candidates, preclinical studies or earlier clinical trials are not necessarily predictive of future results and the results of Inventiva's clinical trials may not support Inventiva's product candidate claims, Inventiva may encounter substantial delays in its clinical trials or Inventiva may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities, enrolment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside Inventiva's control, Inventiva's product candidates may cause adverse drug reactions or have other properties that could delay or prevent their regulatory approval, or limit their commercial potential, Inventiva faces substantial competition and Inventiva’s business, and preclinical studies and clinical development programs and timelines, its financial condition and results of operations could be materially and adversely affected by the current COVID-19 pandemic and geopolitical events, such as the conflict between Russia and Ukraine, related sanctions and related impacts and potential impacts on the initiation, enrolment and completion of Inventiva’s clinical trials on anticipated timelines, and macroeconomic conditions, including global inflation and uncertain financial markets. Given these risks and uncertainties, no representations are made as to the accuracy or fairness of such forward-looking statements, forecasts and estimates. Furthermore, forward-looking statements, forecasts and estimates only speak as of the date of this Form 6-K. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
Please refer to the Universal Registration Document for the year ended December 31, 2021 filed with the Autorité des Marchés Financiers on March 11, 2022, and the “Risk Factors” section of the Annual Report on Form 20-F for the year ended December 31, 2021 and the financial report for the first half of 2022 as filed with the Securities and Exchange Commission for additional information in relation to such factors, risks and uncertainties.
All information in this Form 6-K is as of the date of the relevant document, unless otherwise specified. Except as required by law, Inventiva has no intention and is under no obligation to update or review the forward-looking statements referred to above.
EXHIBIT INDEX
| Exhibit<br><br> <br>No. | Description |
|---|---|
| 99.1 | Press<br> Release. |
| 99.2 | Interim<br> Financial Report |
| 99.3 | Earnings<br> Release. |
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.
| Inventiva S.A. | |
|---|---|
| (Registrant) | |
| Date: September 22, 2022 | /s/ Frédéric<br> Cren |
| Frédéric<br> Cren | |
| Chief Executive<br> Officer |
Exhibit 99.1
Inventiva and Sino Biopharm announce licensingand collaboration agreement to develop and commercialize lanifibranor in Greater China
| ► | Sino<br> Biopharm a leading Chinese pharmaceutical group, through CTTQ will oversee the development<br> and commercialization of lanifibranor in Greater China |
|---|---|
| ► | Lanifibranor<br> is an orally-available small molecule with breakthrough therapy designation from the U.S.<br> Food and Drug Administration (“FDA”) following a positive Phase 2b trial in patients<br> with non-alcoholic steatohepatitis (“NASH”). Lanifibranor is currently being<br> evaluated in a Phase 3 trial in NASH |
| --- | --- |
| ► | Inventiva<br> will receive a $12 million upfront payment, with the right to receive $5 million in potential<br> milestone payments, up to $290 million of clinical, regulatory and commercial milestone payments,<br> in addition to tiered royalties on net sales of lanifibranor in Greater China |
| --- | --- |
Daix(France), Long Island City (New York, United States), Beijing/Hong Kong (China), September 21 2022 – Inventiva (Euronext Paris and Nasdaq: IVA), a clinical-stage biopharmaceutical company focused on the development of oral small molecule therapies for the treatment of non-alcoholic steatohepatitis and other diseases with significant unmet medical needs, and Chia Tai-Tianqing Pharmaceutical Group Co., Ltd (“CTTQ”), a subsidiary of Sino Biopharm, have entered into a licensing and collaboration agreement (the “Agreement”) to develop and commercialize lanifibranor, if approved, Inventiva’s proprietary compound, for the treatment of non-alcoholic steatohepatitis and potentially other metabolic diseases in mainland China, Hong Kong, Macau and Taiwan (“Greater China”).
FredericCren, CEO and cofounder of Inventiva, stated: “This agreement with Sino Biopharm represents an important milestonenot only to support and accelerate the development of lanifibranor, but also to potentially develop and commercialize lanifibranor inGreater China, a region which has a similar prevalence of NASH to the U.S. and a large number of untreated patients at risk of progressingto cirrhosis. Moreover, this agreement could make a significant contribution to the reinforcement of our cash position. We are particularlyproud of partnering with Sino Biopharm, a company with a strong presence in the hepatology field and a clear motivation and strategyto make lanifibranor a potential treatment option for patients with NASH in Greater China.”
TheresaTse, Chairwoman, Sino Biopharm: “This agreement is further evidence of Sino Biopharm’s commitment to seekinginnovation, in one of our core therapeutics areas, liver disease. We have been at the forefront in helping China eliminate hepatitisB for over a decade, and today, NASH without any approved treatments, is the fastest growing cause of liver transplants and liver cancer,so we are delighted to enter into this agreement with Inventiva, which is a great opportunity to potentially bring a promising and convenienttreatment of NASH to China.”
SeanChen, Chief Strategy Officer, Sino Biopharm: “Sino Biopharm ranks top in China on liver disease drug sales and webelieve this collaboration on lanifibranor, a potential best-in-class pan-PPAR agonist for the treatment of NASH, will further enrichour innovative pipeline on liver disease and strengthen our leadership in this therapeutic area. Our team is looking forward to partneringwith Inventiva to accelerate the development of Lanifibranor in China and to satisfy an unmet clinical need in the quickest possibletimeframe.”
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In exchange for receiving an exclusive license to develop, import, manufacture, commercialize and market lanifibranor in Greater China, CTTQ will pay Inventiva an upfront payment of $12 million and an additional $5 million if certain clinical milestones are met. Under the terms of the Agreement, Inventiva has the potential to receive up to $290 million of clinical, regulatory and commercial milestone payments. In addition, subject to regulatory approval, Inventiva will receive tiered royalties from high single-digit to mid-teen double digits of net sales made by Sino Biopharm in Greater China during the first three years of commercialization and from low to mid-teen double digits starting from year four. Depending on multiple factors, including Chinese regulatory authority feedback, it is anticipated that CTTQ will either join the ongoing NATiV3 Phase III clinical trial of lanifibranor in NASH or run an independent study. CTTQ will bear all costs associated with the trials conducted in Greater China.
About Inventiva
Inventiva is a clinical-stage biopharmaceutical company focused on the research and development of oral small molecule therapies for the treatment of patients with NASH, MPS and other diseases with significant unmet medical needs. The Company benefits from a strong expertise and experience in the domain of compounds targeting nuclear receptors, transcription factors and epigenetic modulation. Inventiva’s lead product candidate, lanifibranor, is currently in a pivotal Phase III clinical trial, NATiV3, for the treatment of adult patients with NASH, a common and progressive chronic liver disease for which there are currently no approved therapies.
The Company has established a strategic collaboration with AbbVie in the area of autoimmune diseases that resulted in the discovery of the drug candidate cedirogant (ABBV-157), an oral RORγ inverse agonist which is being evaluated in a Phase IIb clinical trial, led by AbbVie, in adult patients with moderate to severe chronic plaque psoriasis. Inventiva’s pipeline also includes odiparcil, a drug candidate for the treatment of adult mucopolysaccharidoses (MPS) VI patients. As part of Inventiva’s decision to focus clinical efforts on the development of lanifibranor, it suspended its clinical efforts relating to odiparcil and is reviewing available options with respect to its potential further development. Inventiva is in the process of selecting an oncology development candidate for its Hippo signalling pathway program.
The Company has a scientific team of approximately 80 people with deep expertise in the fields of biology, medicinal and computational chemistry, pharmacokinetics and pharmacology, and clinical development. It owns an extensive library of approximately 240,000 pharmacologically relevant molecules, approximately 60% of which are proprietary, as well as a wholly-owned research and development facility.
Inventiva is a public company listed on compartment C of the regulated market of Euronext Paris (ticker: IVA - ISIN: FR0013233012) and on the Nasdaq Global Market in the United States (ticker: IVA). www.inventivapharma.com.
About Sino Biopharm
Sino Biopharm is a leading, innovative R&D-driven pharmaceutical conglomerate in China. Its business encompasses a fully-integrated chain which covers an array of R&D platforms, a line-up of intelligent production and a strong sales system. Sino Biopharm’s products have gained a competitive foothold in various therapeutic categories with promising potential, comprising a variety of biopharmaceutical and chemical medicines for oncology, surgery/orthopedics, liver disease, and respiratory system. The collaboration with Inventiva is managed by invoX Pharma Limited (“invoX”), a wholly owned subsidiary of Sino Biopharm, headquarter in the United Kingdom. invoX is Sino Biopharm’s international expansion platform, focusing on R&D and business development activities outside of China.
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For further information about Sino Biopharm, please visit: http://www.sinobiopharm.com/.
About lanifibranor
Lanifibranor, Inventiva’s lead product candidate, is an orally-available small molecule that acts to induce anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic changes in the body by activating all three peroxisome proliferator-activated receptor (PPAR) isoforms, which are well-characterized nuclear receptor proteins that regulate gene expression. Lanifibranor is a PPAR agonist that is designed to target all three PPAR isoforms in a moderately potent manner, with a well-balanced activation of PPARα and PPARδ, and a partial activation of PPARγ. While there are other PPAR agonists that target only one or two PPAR isoforms for activation, lanifibranor is the most advanced pan-PPAR agonist in clinical development for the treatment of NASH. Inventiva believes that lanifibranor’s moderate and balanced pan-PPAR binding profile contributes to the favorable tolerability profile that has been observed in clinical trials and pre-clinical studies to date. The FDA has granted Breakthrough Therapy and Fast Track designation to lanifibranor for the treatment of NASH.
Contacts
| Inventiva<br><br> <br>Pascaline Clerc, VP of Global External<br> Affairs<br><br> <br>media@inventivapharma.com<br><br> <br>+1 240 620<br> 9175<br><br> <br><br><br> <br>Brunswick Group<br><br> <br>Laurence<br> Frost /Tristan Roquet Montegon / Aude Lepreux ; Media relations<br><br> <br>inventiva@brunswickgroup.com<br><br> <br>+33 1 53 96 83 83<br><br> <br>****<br><br> <br>Westwicke, an ICR Company<br><br> <br>Patricia<br> L. Bank; Investor relations<br><br> <br>patti.bank@westwicke.com<br><br> <br>+1 415 513 1284 | Sino Biopharm<br><br> <br>Kyler Lei<br><br> <br>Head of<br> Capital Markets<br><br> <br>kylerlei@sino-biopharm.com |
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Important Notice
Thispress release contains “forward-looking statements” withinthe meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statementsof historical facts, included in this press release are forward-looking statements. These statements include, but are not limited to,potentially bringing a promising and convenient treatment of NASH to China, the ability to accelerate the development of lanifibranorin Greater China and to satisfy an unmet clinical need and make lanifibranor a potential treatment option for patients with NASH in GreaterChina, forecasts and estimates with respect to Inventiva’s pre-clinical programs and clinical trials, including the design, timing,progress and number of patients to be recruited for those trials, including the NATiV3 Phase III clinical trial with lanifibranor inNASH and the expected Phase IIb clinical trial of cedirogant led by AbbVie, measures to decrease the screen failure rate or increasethe enrollment rate or have other intended impacts on the NATiV3 Phase III clinical trial and the timing of the NATiV3 Phase III clinicaltrial may be further delayed, potential development of odiparcil and lanifibranor, clinical trial data releases and publications, theinformation, insights and impacts that may be gathered from clinical trials, including the NATiV3 Phase III clinical trial with lanifibranorin NASH and the planned expansion of the NATiV3 Phase III clinical trial or independent study in Greater China through the Agreement,the potential marketing and therapeutic potential of lanifibranor and other product candidates, pipeline and preclinical and clinicaldevelopment plans, milestone payments, including milestone payments from Sino Biopharm, royalties and product sales, potential proceedsunder the Company’s financing arrangements, future activities, expectations, plans, growth and prospects of Inventiva and the sufficiencyof Inventiva’s cash resources and cash runway. Certain of these statements, forecasts and estimates can be recognized by the useof words such as, without limitation, “believes”, “anticipates”, “expects”, “intends”, “plans”, “seeks”, “estimates”, “may”, “will”, “would”, “could”, “might”, “should”, “plans”, “designed”, “hopefully” and “continue”and similar expressions. Such statements are not historical facts but rather are statements of future expectations and other forward-lookingstatements that are based on management's beliefs. These statements reflect such views and assumptions prevailing as of the date of thestatements and involve known and unknown risks and uncertainties that could cause future results, performance or future events to differmaterially from those expressed or implied in such statements. Future events are difficult to predict and may depend upon factors thatare beyond Inventiva's control. There can be no guarantees with respect to pipeline product candidates that the clinical trial resultswill be available on their anticipated timeline, that future clinical trials will be initiated as anticipated, that product candidateswill receive the necessary regulatory approvals, or that any of the anticipated milestones by Inventiva or its partners will be reachedon their expected timeline, or at all. Actual results may turn out to be materially different from the anticipated future results, performanceor achievements expressed or implied by such statements, forecasts and estimates, due to a number of factors, including that Inventivais a clinical-stage company with no approved products and no historical product revenues, Inventiva has incurred significant lossessince inception, Inventiva has a limited operating history and has never generated any revenue from product sales, Inventivawill require additional capital to finance its operations, Inventiva's future success is dependent on the successful clinical development, Inventiva’sability to obtain regulatory approval and subsequent commercialization of current and any future product candidates, including the commercializationof product candidates in China, preclinical studies or earlier clinical trials are not necessarily predictive of future results and theresults of Inventiva's clinical trials may not support Inventiva's product candidate claims, Inventiva’s ability to meet theconditions to receive clinical, regulatory and commercial milestone or royalty payments under the agreements with its commercial partners, Inventivamay encounter substantial delays in its clinical trials or Inventiva may fail to demonstrate safety and efficacy to the satisfactionof applicable regulatory authorities, the ability of Inventiva and Sino Biopharm to recruit and retain patients in clinical studies,enrolment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult orrendered impossible by multiple factors outside Inventiva's and Sino Biopharm’s control, Inventiva's product candidates maycause adverse drug reactions or have other properties that could delay or prevent their regulatory approval, or limit their commercialpotential, Inventiva’s ability, and that of its commercial partners, to execute their commercialization strategy for approvedproducts, Inventiva faces substantial competition and Inventiva’s business, and preclinical studies and clinical developmentprograms and timelines, its financial condition and results of operations could be materially and adversely affected by the current COVID-19pandemic and geopolitical events, such as the conflict between Russia and Ukraine, related sanctions and related impacts and potentialimpacts on the initiation, enrolment and completion of Inventiva’s clinical trials on anticipated timelines, and macroeconomicconditions, including global inflation and financial markets. Given these risks and uncertainties, no representations are made as tothe accuracy or fairness of such forward-looking statements, forecasts and estimates. Furthermore, forward-looking statements, forecastsand estimates only speak as of the date of this press release. Readers are cautioned not to place undue reliance on any of these forward-lookingstatements.
Please refer to the Universal RegistrationDocument for the year ended December 31, 2021 filed with the Autorité des Marchés Financiers on March 11, 2022and the Annual Report on Form 20-F for the year ended December 31, 2021 filed with the Securities and Exchange Commission onMarch 11, 2022 and the First Half Report for the six months ended June 30, 2022 to be filed with the SEC, for additional informationin relation to such factors, risks and uncertainties.
All information in this press release is asof the date of the release. Except as required by law, Inventiva has no intention and is under no obligation to update or reviewthe forward-looking statements referred to above.
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Exhibit 99.2
INVENTIVA S.A.
A joint-stock company (société anonyme) with a share capital of 421,341.69 euros
Registered office: 50, rue de Dijon, 21121 Daix, France
Dijon Trade and Companies Register 537 530 255
INTERIMFINANCIAL REPORT
FORTHE SIX MONTHS ENDED JUNE 30, 2022
Tableof contents
| 1. Interim Financial Report | 2 | ||
|---|---|---|---|
| 1.1. | General<br> overview of activities | 2 | |
| 1.2. | Significant<br> events in first-half 2022 | 4 | |
| 1.3. | Recent<br> events and prospects | 8 | |
| 1.4. | Risk<br> factors | 10 | |
| 1.5. | Earnings<br> analysis | 12 | |
| 1.6. | Analysis<br> of the financial situation | 19 | |
| 2. Cash flow and equity | 22 | ||
| 2.1. | Cash<br> and cash equivalents | 22 | |
| 2.2. | Cash<br> flow analysis | 25 | |
| 2.3. | Anticipated<br> sources of funds | 27 | |
| 3. Unaudited interim condensed consolidated financial statements | 29 | ||
| Note 1. Company information | 36 | ||
| Note 2. Basis of preparation and statement of compliance | 41 | ||
| Note 3. Accounting principles | 43 | ||
| Note 4. Notes to the consolidated balance sheet | 46 | ||
| Note 5. Notes to the income statement | 58 | ||
| Note 6. Other financial information | 62 | ||
| 4. Other information | 67 | ||
| 4.1. | Table<br> of delegations | 67 |
Definitions
In this half-yearly report (the “Interim Financial Report”), and unless otherwise specified, the terms Inventiva or the Companyare taken to mean the company Inventiva S.A. with its registered office at 50, rue de Dijon, 21121 Daix, France, and which is listed with the Dijon Trade and Companies Register under number 537 530 255 and its subsidiary, 100% owned, Inventiva Inc. with its registered office at 10-34 44^th^ Dr, Long Island, 11101 New York, USA, created in January 2021.
Certain terms used in this Interim Financial Report are defined in the Company’s Annual Report on Form 20-F for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 11, 2022 and in the 2021 Universal Registration Document’s glossary.
Forward-lookinginformation
This Interim Financial Report contains information about the Company’s objectives and development priorities. This information is sometimes identified by the usage of the future, the conditional or terms such as “consider”, “anticipate”, “think”, “aim”, “target”, “expect”, “understand”, “should”, “seek”, “estimate”, “believe”, “wish”, “can” or, where applicable, the negative form of these same terms, or any other variants or similar terminology. The reader’s attention is drawn to the fact that these objectives and development priorities are dependent on circumstances or facts that cannot be certain to occur or materialize. These objectives and development priorities are not historical data and should not be interpreted as a guarantee that the facts or data will occur, that the assumptions will be proven correct or that the objectives will be achieved. By their very nature, these objectives might not be achieved, and any representations or information given in this Interim Financial Report may prove to be incorrect. The Company has no obligation whatsoever to update this information, subject to the applicable regulations and, in particular, the General Regulation of the French Financial Markets Authority (Autoritédes marchés financiers – AMF). Please refer to the Universal Registration Document for the year ended December 31, 2021 filed with the Autorité des Marchés Financiers on March 11, 2022, the Annual Report on Form 20-F for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 11, 2022 for additional information in relation to such factors, risks and uncertainties
Market and competitiveposition
This Interim Financial Report also contains information about the Company’s activities and the markets on which it operates. This information comes from studies or surveys carried out internally or externally. Other information contained in this Interim Financial Report is available to the general public. The Company considers that all of this information is reliable, but it has not been verified by an independent expert. The Company cannot guarantee that a third party using different methods to gather, analyze or calculate market data would obtain the same results.
Rounding of figures
Certain figures (including data expressed in thousands or millions of euros or dollars) and the percentages presented in this Interim Financial Report have been rounded up or down. Accordingly, totals given may vary slightly from those obtained by adding the exact (unrounded) values of those same figures.
Abbreviations
Certain figures are given in thousands or millions of euros and are indicated as € thousand or € million respectively in this Interim Financial Report.
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| 1. | Interim Financial Report |
|---|---|
| 1.1. | General overviewof activities |
| --- | --- |
Since the Company’s founding, most of its resources have gone into research and development (“R&D”), particularly in order to develop:
| - | The lanifibranor<br> clinical program, its most advanced drug candidate, for patients suffering from non-alcoholic<br> steatohepatitis ("NASH"), a chronic and progressive liver disease for which there<br> is currently no approved treatment. The positive results of the Company’s NATIVE Phase<br> IIb were announced in June 2020 and Breakthrough Therapy and Fast Track designations<br> were granted by the U.S. Food and Drug Administration ("FDA"). The Company has<br> initiated the pivotal Phase III clinical trial of lanifibranor in NASH (“NATiV3”)<br> in the second half of 2021 and a combination trial with lanifibranor and empagliflozin in<br> patients with NASH and Type 2 Diabetes (“T2D”).The last patient first visit for<br> the ongoing NATiV3 Phase III clinical trial evaluating lanifibranor in patients with NASH,<br> initially planned for H1 2023, is now targeted for H2 2023, subject to the continuing implementation<br> of measures to accelerate the enrollment rate. (see section 1.2 - Significant events in the first half of 2022 below on the development of NATiV3 and partnership with Sino Biopharm). |
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Inventiva is now targeting the last patient first visit for NATiV3, the Company’s ongoing Phase III clinical trial evaluating lanifibranor in patients with NASH, for H2 2023, subject to the continuing implementation of measures to accelerate the enrollment rate. The delay the Company faces is primarily due to a higher than originally projected screen failure rate resulting in slower than anticipated enrollment rate. In addition, the Company continues to see slower than predicted site activation, screening and enrollment due to negative impacts from the COVID-19 pandemic and the Company continues to be unable to conduct clinical trial activities at sites originally located in Ukraine and Russia. Inventiva has implemented and is planning further measures designed to accelerate enrollment and reduce screen failures in the NATiV3 trial, and additional sites have been identified to help compensate for the inability to use sites in Ukraine and Russia. As of today, 297 clinical sites are activated. The publication of the topline results of the part 1 of NATiV3 is now targeted for second half of 2025, subject to the continuing implementation of measures to accelerate the enrollment rate.
Additionally, the Company has entered into a licensing and collaboration agreement with Sino Biopharm to develop and commercialize, subject to regulatory approval, lanifibranor for the treatment of NASH and other metabolic diseases in Greater China. Depending on multiple factors, including Chinese regulatory authority feedback, it is expected that Chia Tai Tianqing Pharmaceutical Group (CTTQ) will either join the ongoing NATiV3 Phase III clinical trial of lanifibranor in NASH or run an independent study. CTTQ will bear all costs associated with the trials conducted in Greater China.
| - | Inventiva's pipeline<br> also includes odiparcil for the treatment of patients with mucopolysaccharidosis type VI<br> ("MPS VI"), a group of rare genetic diseases. Inventiva believes the potential<br> for an efficient development pathway for odiparcil for the treatment of MPS VI exists based<br> on FDA feedback and continues to review potential options to further development of odiparcil<br> for the treatment of MPS VI, which may include pursuing a partnership. |
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| - | To a lesser extent,<br> in the development of compounds targeting nuclear receptors, transcription factors and epigenetic<br> modulation. Hippo signaling pathway program aims to disrupt the interaction between yes-associated<br> protein, or YAP, and transcription enhancer associated domain transcription factors, or TEAD,<br> an interaction that plays a key role in oncogenic and fibrotic processes. In xenograft and<br> orthotopic models of malignant pleural mesothelioma, or MPM, Inventiva observed that<br> YAP-TEAD inhibition was associated with reduced tumor growth and is in the process of selecting<br> a development candidate for the Hippo program, which the Company anticipates entering pre-clinical<br> development in 2023, versus the second half of 2022 as previously communicated. |
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The Company has a strategic collaboration with AbbVie Inc ("AbbVie") in the autoimmune diseases field. Cedirogant (formerly ABBV-157), a selective and orally-available inverse agonist of the nuclear receptor RORy, was jointly discovered by Inventiva and AbbVie for the treatment of autoimmune diseases and is currently in clinical development by AbbVie for the treatment of moderate-to-severe psoriasis. Following encouraging results from the Phase Ib clinical trial, AbbVie announced in November 2021 the initiation of a cedirogant Phase IIb clinical trial for the treatment of moderate to severe plaque psoriasis in adults, which is expected to be completed in the first quarter of 2023.
These research and development activities are presented in further detail in Item 4.B Business Overview of the Company’s Annual Report on Form 20-F for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 11, 2022 and Chapter 1 Businessactivities and markets of the 2021 Universal Registration Document. Changes in research and development costs are detailed in section 1.5.2 “Operating expenses” below.
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| 1.2. | Significant events in the first half of 2022 |
|---|---|
| 1.2.1. | Operations andproduct portfolio |
| --- | --- |
The 2021 Universal Registration Document and the Annual Report on Form 20-F for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 11, 2022, describe the Company’s main clinical and pre-clinical programs. The significant events linked to the programs that took place in the first six months of 2022 are as follows:
► Lanifibranor
Inventiva announcedthat its IND application for the Phase II combination trial with lanifibranor and empagliflozin in patients with NASH and T2D has beenaccepted by the FDA
On March 8, 2022, Inventiva announced that FDA has completed its safety review of the investigational new drug (“IND”) application and has concluded that the proof-of-concept Phase II combination trial (“LEGEND”) with its lead drug candidate, lanifibranor, and the SGLT2 inhibitor empagliflozin^1^ in patients with Type 2 Diabetes (“T2D”) and non-cirrhotic NASH may proceed.
The LEGEND Phase IIa clinical trial has been designed as a multi-center randomized, placebo-controlled, concept trial to assess the safety and efficacy of lanifibranor in combination with the SGLT2 inhibitor empagliflozin for the treatment of patients with non-cirrhotic NASH and T2D. The trial is double-blind for the placebo and lanifibranor arms and open label for the combination of lanifibranor and empagliflozin arm.
LEGEND is expected to recruit a total of 63 patients with non-cirrhotic NASH and T2D. The diagnosis of non-cirrhotic NASH will be based on historic histology evaluation or a combination of non-invasive methods including imaging and serum-based metabolic diagnostic tests. On July 7, 2022, Inventiva announced the initiation of the LEGEND Phase IIa clinical trial with the screening of the first patient.
The primary efficacy endpoint of the trial is a change in Hemoglobin A1c (HbA1c) at the end of the 24-week treatment compared to baseline. Secondary endpoints include changes in liver enzymes, glycemic and lipids parameters, inflammatory markers and body fat composition. The trial is designed to provide valuable information on body weight evolution and body fat composition in patients with NASH and T2D when treated with lanifibranor and empagliflozin. Magnetic resonance imaging (MRI) is expected to collect noninvasive data on hepatic fat, inflammation, and fibrosis. Publication of top line results is expected for the second half of 2023.
► Collaborationwith AbbVie in auto-immune diseases
On January 31, 2022, the Company announced the receipt of a €4.0 million milestone payment from AbbVie, following the enrollment of the first psoriasis patient in the ongoing Phase IIb clinical trial with cedirogant (formerly ABBV-157), an oral RORy reverse agonist jointly discovered by Inventiva and AbbVie for the treatment of autoimmune diseases. This clinical trial, which is led by AbbVie, is expected to be completed by the end of the first quarter of 2023.
This milestone payment was recognized as revenue in 2021, as the enrollment of the first patient took place in November 2021 (see note 4.6 – Tradereceivables and other current assets of section 3. Unaudited interim condensed consolidated financial statements).
^1^ Empagliflozin is marketed under the brand name Jardiance® by Boehringer Ingelheim and Eli Lilly and Company. Jardiance is approved for treating type 2 diabetes and reducing the risk of cardiovascular disease for adults with type 2 diabetes.
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| 1.2.2. | Other events |
|---|
► Business
Amendments toContract Research Organization (“CRO”) Agreement with Pharmaceutical Research Associates B.V. – NATiV3 and LEGEND trials
Effective January 14, 2022, in connection with the conduct of the LEGEND Phase IIa clinical trial, the Company entered into an agreement with Pharmaceutical Research Associates Group B.V. ("PRA"), a CRO. Under the terms of the agreement, PRA is to support a clinical trial to evaluate the patient benefit of the combination of lanifibranor with empagliflozin, an SGLT2 inhibitor, in patients with T2D and non-cirrhotic NASH. The Company will pay a total amount of €7.9 million for the services rendered (directly and indirectly) by the CRO over the two-year period following the date of the contract.
On February 1, 2022, the Company amended its April 2021 agreement with PRA related to the Phase III clinical trial in NASH (“NATiV3”) to include a bonus and malus mechanism. Depending on whether PRA reaches four milestones in the NATiV3 clinical trial before or after certain dates, PRA will receive a bonus or pay the Company a malus. The bonus and malus scheme is capped at €3.4 million.
On April 12, 2022, the Company further amended its agreement with PRA related to the NATiV3 clinical trial to extend the timelines, with respect to the milestones, and to revise the country/site distribution of the trial. Inventiva is obligated to pay PRA up to an aggregate of €221.7 million under this NATiV3 PRA agreement.
As of June 30, 2022, the total amount still to be paid under the LEGEND and NATiV3 PRA agreements amounts to €207.0 million.
Service Agreementwith Summit Clinical Services LLC ("Summit")
In February 2022, the Company entered a service contract with Summit in connection with the NATiV3 trial. Under the terms of the agreement, Summit is to provide services to support recruitment and commitment of volunteers for the NATiV3 clinical trial. The Company agreed to pay for the services rendered by Summit over the entire period from the effective date of the contract, on February 1, 2022, to March 2029, for a minimum amount of $4.4 million in the aggregate over the term of the agreement. If the Company requests Summit to extend the services rendered, this amount may increase by approximately $1.6 million.
► Ongoingtax dispute settlement
On February 15, 2022, the Company received a global settlement from the French tax authorities regarding the tax audit carried out on payroll taxes for 2016 and 2017, and on French Research Tax Credit (“CIR”) 2013 to 2015. This proposal has been accepted by the Company. On June 30, 2022, accruals of €2.8 million accounted as other current liabilities as of December 31, 2021, have been settled by the payment of €0.4 million, by the offset against a VAT credit of €1.9 million, and by the write-off of CIR 2017 receivables in the amount of €0.2 million and €0.3 million receivables related to the CIR 2013 – 2015 corrective statement (see notes 4.10 – Provisions et 4.12 – Trade payables and other current liabilities of section 3. Unaudited interimcondensed consolidated financial statements).
5
► Equityfinancing
Fundraisingof €9.4 million in At-The-Market program
On June 15, 2022, the Company raised €9.4 million by issuing and selling 1,260,618 American Depositary Shares (“ADS”) pursuant to its At-The-Market (“ATM”) program, established on August 2, 2021. at a price of USD 7.75 per ADS, representing a discount of 0.92% to the volume-weighted average trading price of the Company's ADSs during the prior day’s trading session (equivalent to €7.43 at an exchange rate of 1.0431 USD/€). Each ADS represents one ordinary share of the Company. The movements of the Company’s share capital are described in note 4.8 - Shareholders’ equity f of section 3. Unaudited interim condensedconsolidated financial statements.
► Bankfinancing and cash flow
Payments receivedfrom the CIR 2021
On April 21, 2022, the Company received French Research tax credits (crédit d'impôt recherche or "CIR”) for the fiscal year 2021, totaling €3.6 million.
Inventiva securesa €50 million credit facility from the European Investment Bank (“EIB”), subject to conditions
On May 16, 2022, the Company entered into a finance contract with the EIB for up to €50 million (the “Finance Contract”) to support the Company’s preclinical and clinical pipeline, including to fund a portion of its Phase III clinical trial of lanifibranor in patients with non-alcoholic steatohepatitis.
The Finance Contract provides for funding in two equal tranches of €25 million. The disbursement of the first tranche is subject to, among other conditions, (i) the Company issuing warrants to EIB in accordance with the terms and conditions of the warrants agreement entered into July 1, 2022 and (ii) the receipt by the Company of an aggregate amount of at least €18 million, obtained either through the issuance of new shares in the Company or through the receipt of upfront or milestone payments from the business development activities on the Company's various assets (the Company had received 9.4 million through a capital increase under the At-The-Market financing program, as described in section 1.2 – Significant events in the first half of 2022 and is eligible to receive an upfront payment of $12 million in connection with the signing of the license and collaboration agreement with Sino Biopharm).
The disbursement of second tranche under the Finance Contract is also subject to, among other conditions, (i) the full drawdown of the first tranche, (ii) the receipt by the Company from the date of the Finance Contract of an aggregate amount of at least €70 million (inclusive of the €18 million set forth above), paid either in exchange for Company shares, or through upfront or milestone payments, (iii) (a) an out-licensing, partnership or royalty transaction with an upfront payment of at least €10 million, or (b) the initiation of a Phase III clinical trial of cedirogant by AbbVie Inc; and (iv) operational criteria based on patient enrollment and number of sites activated in the Company’s Phase III clinical trial of lanifibranor in patients with NASH. Any funds not disbursed within 36 months following the execution of the Finance Contract shall be cancelled. The conditions precedent and upfront payment events are described in note 4.9 - Financial debt of section 3. Unaudited interim condensed consolidated financial statements. At the date of this document, all the conditions precedent are not yet met.
Borrowings under the Finance Contract shall bear an interest rate equal to 8% per annum for the first tranche and 7% per annum for the second tranche. Each tranche shall be repayable in a single instalment on the maturity date of the relevant tranche, which shall be no later than four years after the disbursement of the first tranche and no later than three years after the disbursement of the second tranche.
6
Inventiva obtainsnon-dilutive financing of €5.3 million in the form of an additional French state-guaranteed loan and two equity recovery loans
In June 2022, the Company entered into three loan agreements with a syndicate of French banks for a total amount of €5.3 million. Implemented as part of a state-guaranteed PGE loan facility ("Prêt Garanti par l’Etat") with Bpifrance and two loans from a stimulus economic plan ("Prêts Participatifs Relance") granted by Crédit Agricole Champagne-Bourgogne and Société Générale, they are in large part guaranteed by the French State and have a duration of eight-year and a four-year repayment schedule.
The additional French state-guaranteed loan granted by BPI France is guaranteed for up to 90% by the French state and has a maturity aligned with the existing PGE for which the Company has opted for a linear repayment extension until May 2026.
The two equity recovery loans, obtained as part of a French government initiative to support companies, have been granted by Crédit Agricole Champagne-Bourgogne and Société Générale. They are guaranteed predominantly by the state and feature an eight-year financing period and a four-year repayment period.
► Conflictin Ukraine and business update
At the end of 2021 and beginning of 2022, tensions between the U.S. and Russia escalated when Russia amassed large numbers of military ground forces and support personnel on the Ukraine-Russia border and, in February 2022, Russia invaded Ukraine. In response, the European Union, the United States of America (or the “U.S.”) and certain other countries have imposed significant sanctions and export controls against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian political, business, and financial organizations, Russia issued related counter-sanctions, and the European Union, the U.S., Russia, and certain other countries could impose further sanctions, trade restrictions, and other retaliatory actions or counter-actions should the conflict continue or worsen.
In addition to the COVID-19 pandemic, the conflict in Ukraine and related sanctions against Russia have impacted recruitment for NATiV3. Although the pandemic has eased globally, the strain on health systems continues to affect clinical sites, notably through staffing shortages and higher turnover. In addition, recruitment for NATiV3 has been put on hold in Ukraine and the decision has been taken to remove all of Inventiva’s planned sites in Russia from the trial. The Company is continuing to experience delays in NATiV3. The delay the Company faces is primarily due to a higher than originally projected screen failure rate resulting in slower than anticipated enrollment rate. In addition, the Company continues to see slower than predicted site activation, screening and enrollment due to negative impacts from the COVID-19 pandemic and the Company continues to be unable to conduct clinical trial activities at sites originally located in Ukraine and Russia. Inventiva has implemented and is planning further measures designed to accelerate enrollment and reduce screen failures in the NATiV3 trial, and additional sites have been identified to help compensate for the inability to use sites in Ukraine and Russia. As of today, 297 clinical sites are activated. The publication of the topline results of the part 1 of NATiV3 is now targeted for the second half of 2025, subject to the continuing implementation of measures to accelerate the enrollment rate.
Additionally, the Company has entered into a licensing and collaboration agreement with Sino Biopharm to develop and commercialize, subject to regulatory approval, lanifibranor for the treatment of NASH and other metabolic diseases in Greater China. Depending on the multiple factors, including Chinese regulatory authorities' feedback, it is expected that CTTQ will either join the ongoing NATiV3 Phase III clinical trial of lanifibranor in NASH or run an independent study. CTTQ will bear all costs associated with the trials conducted in Greater China.
The investigator driven Phase II trial of lanifibranor in Non-Alcoholic Fatty Liver Disease (“NAFLD”) patients with type 2 diabetes (“T2D”) conducted by Professor Cusi from the University of Florida randomized its last patient in September 2022. However, due to a late enrollment of this last patient, the topline results from this trial are now expected in the first quarter 2023 versus the second half of 2022 as previously communicated. For the ongoing Phase II LEGEND trial combining lanifibranor with SGLT2 inhibitor empagliflozin, patient screening and randomization commenced in July, 2022 and top-line results from this trial are expected in the second half of 2023.
7
| 1.3. | Recent eventsand prospects |
|---|---|
| 1.3.1. | Operations andproduct portfolio |
| --- | --- |
**►**Lanifibranor
Inventiva announcesthe screening of the first patient in LEGEND, a Phase IIa combination trial with lanifibranor and empagliflozin in patients with NASHand T2D
On July 7, 2022, Inventiva announced the screening of the first patient in its Phase IIa LEGEND clinical trial combining lanifibranor and empagliflozin in patients with NASH and T2D in the United States. More than 30 sites in France, the United Kingdom, Belgium, the Netherlands, and the United States have already qualified to participate in the trial. Publication of topline results is expected in the second half of 2023.
► Othersignificant events
| - | In<br> September 2022, Inventiva signed a licensing and collaboration agreement with Sino<br> Biopharm to develop, import, manufacture, commercialize and market, subject to regulatory<br> approval, lanifibranor, for the treatment of NASH and potentially other metabolic diseases,<br> in China, Hong Kong, Macau and Taiwan (Greater China). Under the terms of the agreement,<br> Sino Biopharm will pay Inventiva an upfront payment of $12 million and an additional $5 million<br> upon achievement of certain clinical milestones. Inventiva has the potential to receive up<br> to $290 million of clinical, regulatory and commercial milestone payments under the agreement.<br> In addition, subject to regulatory approval of lanifibranor, Inventiva has the right<br> to receive tiered royalties ranging from high single-digit to mid-teen double digits of net<br> sales by Sino Biopharm in Greater China during the first three years of commercialization<br> and from low to mid-teen double digits starting from year four. Depending on the multiple<br> factors, including Chinese regulatory authorities’ feedback, it is expected CTTQ will<br> either join the ongoing NATiV3 Phase III clinical trial of lanifibranor in NASH or run an<br> independent study. CTTQ will bear all costs associated with the trials conducted in Greater<br> China |
|---|---|
| - | The<br> Company had proposed to the FDA a potential single 52-week randomized, double-blind, placebo-controlled<br> trial, followed by a 52 week safety extension with fifty MPS VI patients aged 5 to 15 receiving<br> placebo or a low or high dose of odiparcil, depending on the patient’s weight, with<br> approval potentially being sought after the initial 52 weeks of treatment if the primary<br> end-point of improvement of a 6-minute walk test were met. In August 2022, the Company<br> received feedback from the FDA that a single Phase 2/3 clinical trial with odiparcil in children<br> with MPS VI could potentially support a marketing application. This decision potentially<br> expands Inventiva's opportunities for clinical development and collaborations. Inventiva<br> believes the potential for an efficient development pathway for odiparcil for the treatment<br> of MPS VI exists based on FDA feedback and continues to review potential options to further<br> development of odiparcil for the treatment of MPS VI, which may include pursuing a partnership. |
| --- | --- |
► Key expected milestones
| - | Publication<br> of the results of the investigator-initiated study with lanifibranor in patients with NAFLD<br> and T2D – now planned for the first quarter of 2023 |
|---|---|
| - | Study<br> completion of Phase IIb trial with cedirogant in patients with psoriasis conducted by AbbVie<br> – planned for first quarter of 2023 |
| --- | --- |
| - | Publication<br> of the topline results of the Phase IIa LEGEND of lanifibranor in combination with empagliflozin<br> in patients with NASH and T2D – planned for second half of 2023 |
| --- | --- |
8
| - | Last Patient<br> First Visit of the Phase III NATiV3 clinical trial evaluating lanifibranor in NASH –<br> now targeted for second half of 2023, subject to the continuing implementation of measures<br> to accelerate the enrollment rate. |
|---|---|
| 1.3.2. | Other events |
| --- | --- |
**►**Conclusion of a warrant agreement with the EIB
On July 4, 2022, in accordance with the terms of the credit facility with EIB, the Company agreed to issue warrants to EIB as a condition to the potential funding of each tranche (see section “Inventiva secures a €50 million credit facility from the European Investment Bank(“EIB”) conditionally”).
The number of warrants to be issued to EIB will be determined based on (i) the aggregate amount raised by the Company through one or more equity offerings, or through upfront or milestone payments, from the date of the Finance Contract to the time of the disbursement of the relevant tranche, and (ii)(a) the average price per share paid for the Company’s shares in its most recent qualifying equity offering or (b) for the first tranche only, in case of no qualifying equity offering, the volume weighted average price per share of the Company shares over the last 180 calendar days.
The subscription price shall be €0.01 per warrant.
The warrants would have a maturity of twelve years and shall be exercisable following the earliest to occur of (i) a change of control event, (ii) the maturity date of the first tranche, (iii) an event of default under the Finance Contract, or (iv) a repayment demand by the EIB under the Finance Contract. The warrants shall automatically be deemed null and void if they are not exercised within the twelve-year period. Each warrant will entitle EIB to one ordinary share of the Company in exchange for the exercise price (subject to anti-dilutive provisions). EIB shall be entitled to a put option at its intrinsic value to require the Company to buy back the exercisable warrants not yet exercised in certain of these occurrences.
Each warrant will entitle EIB to one ordinary share of the Company.
The exercise price will be equal to 95% of the volume weighted average of the trading price of the Company shares on the regulated market of Euronext Paris for the last trading session preceding the decision of the Company to issue such warrant.
Furthermore, the Company shall be entitled to a call option to require EIB to sell to the Company all the warrants, and a right of first refusal to buy back any warrants that are offered for sale to a third party, subject to exceptions.
**►**Changes in foreign currency accounts
During July 2022, the company sold $15 million on a term deposit and sold $10 million on a current account to take advantage of the favorable exchange rate of the euro against the dollar.
9
| 1.4. | Risk factors |
|---|
The Company’s business faces significant risks. You should carefully consider all of the information set forth in this document and in the Company’s other filings with the United States Securities and Exchange Commission, or the SEC, including the risk factors which the Company faces and which are faced by the Company’s industry described in Chapter 2 of the Company’s 2021 Universal Registration Document Part I, Item 1A. “ Risk Factors” of the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2022, in addition to the following risk factors. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. This document also contains forward-looking statements that involve risks and uncertainties. The Company’s results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this document and in the Company’s other SEC filings. See “Special Note Regarding Forward-Looking Statements” above.
Liquidity risk:the Company believes that it has sufficient funding to finance its activities until the fourth quarter of 2023
As of June 30, 2022, the Company's effective cash (cash, cash equivalents and some other current assets) amounted to €87.2 million.
On this date, the Company estimates its existing cash and cash equivalents are sufficient to finance its operating and capital expenditure requirements as currently planned until the fourth quarter of 2023, including the expected $12 million upfront payment under the license and collaboration agreement signed with Sino Biopharm and the potential first €25 million tranche of the EIB facility. This estimate is based on the Company’s current business plan and excludes any potential milestones payable to or by the Company and any additional expenditures related to the potential continued development of the odiparcil program or resulting from the potential in-licensing or acquisition of additional product candidates or technologies, or any associated development the Company may pursue. This period could be shortened if there are any significant increases beyond the Company’s expectations in spending on development programs or more rapid progress of development programs than anticipated. The Company may have based this on assumptions that are incorrect and may end up using its resources sooner than anticipated.
The Company expects that it will need to raise substantial additional funds in the future. Any additional fundraising efforts may divert management from their day-to-day activities, which may adversely affect the Company’s ability to develop and, if approved, commercialize its product candidates. In addition, the Company’s ability to raise necessary financing could be negatively impacted by worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the U.S. and worldwide resulting from the effects of the COVID-19 pandemic or otherwise. in addition to market impacts as a result of geopolitical events, including relating to Russia's invasion of Ukraine.
The implementation and terms and conditions of new financing will depend on factors, particularly economic and market ones, over which the Company has no control. A new financing could take the form of debt financing, which could impact the Company’s financial structure, a capital increase, which could result in share dilution, or other strategic transaction such as a partnership. If the Company is unable to obtain funding on a timely basis, it may be required to significantly curtail, delay or discontinue one or more of its research or development programs or the commercialization of any approved product or be unable to expand its operations or otherwise capitalize on its business opportunities, as desired, which could impair its growth prospects.
10
Risks related todifficulties in recruiting patients
The lanifibranor clinical program is the Company’s most advanced drug candidate, for patients suffering from NASH, a chronic and progressive liver disease for which there is currently no approved treatment. The positive results of the Company’s NATIVE Phase IIb were announced in June 2020 and Breakthrough Therapy and Fast Track designations were granted by the FDA. The Company has initiated the pivotal Phase III clinical trial of lanifibranor in NASH (“NATiV3”) in the second half of 2021 and a combination trial with lanifibranor and empagliflozin in patients with NASH and Type 2 Diabetes (“T2D”). The last patient first visit for the ongoing NATiV3 Phase III clinical trial evaluating lanifibranor in patients with NASH is now targeted for H2 2023, subject to the continuing implementation of measures to accelerate the enrollment rate..
In addition to the COVID-19 pandemic, the conflict between Russia and Ukraine and related sanctions against Russia have impacted recruitment for NATiV3. Although the pandemic has eased globally, the strain on health systems continues to affect clinical sites, notably through staffing shortages and higher turnover. In addition, recruitment for NATiV3 has been put on hold in Ukraine and the decision has been taken to remove all of Inventiva’s planned sites in Russia from the trial.
The Company is continuing to experience delays in NATiV3. The delay the Company faces is primarily due to a higher than originally projected screen failure rate resulting in slower than anticipated enrollment rate. In addition, the Company continues to see slower than predicted site activation, screening and enrollment due to negative impacts from the COVID-19 pandemic and the Company continues to be unable to conduct clinical trial activities at sites originally located in Ukraine and Russia. Inventiva has implemented and is planning further measures designed to accelerate enrollment and reduce screen failures in the NATiV3 trial, and additional sites have been identified to help compensate for the inability to use sites in Ukraine and Russia. As of today, 297 clinical sites are activated. The publication of the topline results of the part 1 of NATiV3 is now targeted for the second half of 2025, subject to the continuing implementation of measures to accelerate the enrollment rate.
Additionally, the Company has entered into a licensing and collaboration agreement with Sino Biopharm to develop and commercialize lanifibranor for the treatment of NASH and other metabolic diseases in Greater China. Depending on the multiple factors, including Chinese regulatory authorities feedback, it is expected CTTQ will either join the ongoing NATiV3 Phase III clinical trial of lanifibranor in NASH or run an independent study. CTTQ will bear all costs associated with the trials conducted in Greater China.
11
| 1.5. | Earnings analysis | |||
|---|---|---|---|---|
| 1.5.1. | Revenue and otherincome | |||
| --- | --- | |||
| Operating income<br> <br>In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||
| --- | --- | --- | --- | --- |
| Revenue | 67 | 139 | ||
| Total revenue | 67 | 139 | ||
| CIR research tax credit | 3,210 | 1,849 | ||
| Subsidies | 6 | 3 | ||
| Other | 109 | 156 | ||
| Other income | 3,325 | 2,009 | ||
| Total revenue and other income | 3,392 | 2,147 | ||
| Revenue | ||||
| --- |
As part of its collaboration with AbbVie in auto-immune diseases, Inventiva may be eligible to receive development, regulatory and commercial milestone payments as well as royalty payments.
Otherincome
Other income increased of €1.3 million or 65% compared to the first half of 2021. This increase is due to the CIR and other research tax credits resulting from the increase in research and development activities for lanifibranor for the treatment of NASH in the first half of 2022.
| 1.5.2. | Operating expenses | |||||
|---|---|---|---|---|---|---|
| Operating expenses<br> <br>In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Research and development expenses | (29,866 | ) | (19,109 | ) | ||
| Marketing – Business development expenses | (278 | ) | (258 | ) | ||
| General and administrative expenses | (6,847 | ) | (5,779 | ) | ||
| Total operating expenses | (36,991 | ) | (25,146 | ) |
The increase in operating expenses of €11.8 million, or 47% compared to the first half of 2021 is mainly driven by the increase in research and development expenses of €10.8 million and general and administrative expenses of €1.1 million described below.
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| **1.**5.2.1. | Research and development expenses |
|---|
Research and development expenses for the six months ended June 30, 2022 break down as follows:
| Research and development expenses<br> <br>In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||||
|---|---|---|---|---|---|---|
| Disposables | (920 | ) | (714 | ) | ||
| Energy and liquids | (368 | ) | (304 | ) | ||
| Patents | (227 | ) | (296 | ) | ||
| Studies | (20,530 | ) | (11,742 | ) | ||
| Maintenance | (466 | ) | (459 | ) | ||
| Fees | (103 | ) | (93 | ) | ||
| IT systems | (428 | ) | (362 | ) | ||
| Personnel costs | (5,891 | ) | (4,389 | ) | ||
| Depreciation, amortization, and provisions | (594 | ) | (375 | ) | ||
| Other research and development costs | (340 | ) | (374 | ) | ||
| Total research and development expenses | (29,866 | ) | (19,109 | ) |
The €10.8 million (56%) increase in research and development expenses as compared to the six-months ended June 30, 2021, was primarily driven by:
| - | a<br> €8.8 million increase in spending on studies in the research and development phase,<br> particularly for lanifibranor; and |
|---|---|
| - | a<br> €1.5 million increase in personnel costs, compared to first half of 2021, mainly<br> due (i) to the strengthening of the development and executive team working on the lanifibranor<br> trials in the second half of 2021 and the first half of 2022 (ii) and to the share-based<br> payment increase following the Long Term Incentive Plan granted on April 16, 2021 (full<br> year effect compared first half of 2021). |
| --- | --- |
**►**Lanifibranor
Clinical trial-related expenses for lanifibranor development increased by €8.7 million compared to the first half of 2021, totaling €19.9 million in the first half of 2022.
In line with previous periods, costs relating to lanifibranor’s development in the first half of 2022 can be broken down into two main categories:
| (i) | activities<br> related to clinical studies amounted to €15.1 million, mainly including the Phase III<br> trial in NASH, the initiation of the Phase II LEGEND trial, and Phase I studies as detailed<br> below; and |
|---|---|
| (ii) | development<br> activities amounted to €4.7 million, mainly including pharmaceutical development and<br> non-clinical, preclinical pharmacology and toxicology trials in animals and the activities<br> related to regulatory consulting. |
| --- | --- |
Costs linked to clinical trial activities included the following developments over the six months ended June 30, 2022:
Treatments forNASH
| - | Costs<br> linked to the Phase III trial conduct with the qualification and opening of investigator<br> sites, regulatory submissions and first patients recruitments, leasing of Fibroscans equipment,<br> the initial expenses related to the first packaging campaigns for the treatment units, costs<br> related to the biopsy slides reading and the consulting including committees; |
|---|
13
| - | Costs<br> linked to the recruitment of the patients in the NAFLD trial and storage of treatments units;<br> and |
|---|---|
| - | costs<br> related to the biological samples used in the NATIVE trial, of which the last patients left<br> the trial on March 16, 2020, and that has been closed. |
| --- | --- |
LEGEND
| - | Launching<br> of Phase II trial initiation tasks with expenses of contract research organizations related<br> to regulatory submissions, qualification and opening of investigator sites, and first patients’<br> recruitments. Other costs of the period are related to the first packaging campaigns for<br> the treatment units and preparation of pharmacokinetics analysis. |
|---|
Phase I studies
| - | Pursuit<br> of Hepatic Impairment trial with Synheos as part of a CRO contract and the clinical packaging; |
|---|---|
| - | Finalization<br> of the “TQT” trial which is intended to assess the impact of the molecule on<br> cardiac repolarization, including the activities within the CRO contract including the redaction<br> by Spaulding Clinical Research, and last bioanalysis expenses; |
| --- | --- |
| - | Residual costs correspond to the initiation of the Renal Impairment trial among which costs related<br> to the finalization of the protocol and submission record preparation, and the finalization<br> of the Drug Interaction trial. |
| --- | --- |
PhaseII FASST trial was archived and closed.
Development costs in the first half of 2022 related primarily to:
| - | Pharmaceutical<br> development consisting mainly of the orders of raw materials for the manufacturing of the<br> active ingredient batches and the manufacturing of the 140kg cGMP batch for phase III, the<br> pursuit of the optimization activities of lanifibranor active ingredient synthesis and its<br> analytical methods; |
|---|---|
| - | Regarding<br> the non-clinical development program, environmental toxicology and pharmacokinetics studies,<br> including the validation of a physiological based pharmacokinetic model (“PBPK”)<br> developed with Phinc as well as in vitro and in vivo toxicology; |
| --- | --- |
| - | Manufacture<br> campaign of the first 2 clinical batch campaigns with Delpharm and pursuit of the stability<br> trials of the finished product; |
| --- | --- |
| - | Regulatory<br> and quality advice from clinical, statistical, quality assurance, scientific and clinical<br> operations experts to enable the Company to conduct its development program in line with<br> quality standards and regulatory requirements; and |
| --- | --- |
| - | The<br> continuation studies on animals through collaboration with recognized experts in therapeutic<br> indications to improve knowledge of the effects of lanifibranor and its mechanism of action. |
| --- | --- |
**►**YAP-TEAD
Trial-related expenses for the YAP-TEAD project increased by €0.3 million compared to the first half of 2021, totaling €0.6 million in the first half of 2022.
Costs incurred mainly related to the optimization of studies and pre-clinical collaboration and included:
| - | Biological<br> and pharmacological studies (in vivo xenograft and orthotopic models, deconvolution<br> target studies); |
|---|
14
| - | Trial<br> initiation on compound affinity to transporters; |
|---|---|
| - | Medicinal<br> chemistry studies (Computer Aided Drug Design (CADD), structural chemistry, synthesis and<br> binding); and |
| --- | --- |
| - | Consulting<br> fees. |
| --- | --- |
| 1.5.2.2. | Marketing and business development expenses |
| --- | --- |
Marketing and business development expenses break down as follows:
| Marketing – Business development<br> <br>In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||||
|---|---|---|---|---|---|---|
| Fees | (1 | ) | (150 | ) | ||
| IT systems | (7 | ) | (5 | ) | ||
| Personnel costs | (111 | ) | (100 | ) | ||
| Other operating expenses | (159 | ) | (4 | ) | ||
| Total marketing and business development expenses | (278 | ) | (258 | ) |
Marketing and business development expenses for the first half of 2022 were in line with the first half of 2021 with a decrease of €0.2 million of consulting fees on the Company's marketing strategy, in particular concerning the options for developing the odiparcil program, and a €0.2 million increase of other operating expenses related to the fees related to business development.
15
| 1.5.2.3. | General and administrative expenses |
|---|
General and administrative expenses are mainly composed of administrative staff costs, support costs (mainly consisting of security costs, taxes and various rentals), non-scientific IT costs and consulting fees.
General and administrative expenses break down as follows:
| General and administrative expenses<br> <br>In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||||
|---|---|---|---|---|---|---|
| Energy | (92 | ) | - | |||
| Maintenance | (55 | ) | - | |||
| Consulting fees | (2,026 | ) | (1,652 | ) | ||
| IT systems | (42 | ) | (26 | ) | ||
| Support costs (including taxes) | (355 | ) | (452 | ) | ||
| Personnel costs | (2,198 | ) | (1,736 | ) | ||
| Depreciation, amortization and provisions | (105 | ) | (79 | ) | ||
| Insurance | (1,265 | ) | (1,078 | ) | ||
| Other general and administrative expenses | (708 | ) | (756 | ) | ||
| Total general and administrative expenses | (6,847 | ) | (5,779 | ) |
General and administrative expenses for the first half of 2022 increased by €1.1 million (18%) compared to the first half of 2021. These changes are mainly due to:
| - | increase<br> of personnel costs of €0.5 million related to the increase of share-based payment linked<br> to the LTIP granted on April 16, 2021; |
|---|---|
| - | increase<br> of consulting fees by €0.4 million and insurance costs by €0.1 million incurred<br> in connection with the additional costs related to Inventiva Inc. and the dual listed status<br> of the Company. |
| --- | --- |
| 1.5.3. | Other operating income and expenses |
| --- | --- |
Other operating income and expenses break down as follows:
| Other operating income and expenses<br> <br>In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||||
|---|---|---|---|---|---|---|
| Other operating income | 294 | 341 | ||||
| Other operating expenses | (163 | ) | (948 | ) | ||
| Other operating income and expenses | 131 | (607 | ) |
For the first half of 2022, other operating income and expenses are mainly due to fiscal litigation unwinding (see notes 4.10 - Provisionsand 4.12 - Trade payables and other current liabilities of section 3. Unaudited interimcondensed consolidated financial statements), other operating incomes are composed of €0.3 million reversal of provision and the other operating expenses of €0.1 million penalties linked to this litigation.
16
For the first half of 2021, other operating income and expenses were mainly composed of:
| - | €0.8<br> million insurance costs related to the "Public Offering of Securities Insurance",<br> to cover the risks related to the Company’s initial public offering on the Nasdaq Global<br> Market in July 2020 for; and |
|---|---|
| - | €0.3<br> million reversal of the full impairment of the carry back receivable recorded on December 31,<br> 2020. An income tax for the same amount was recognized in the first half of 2021. Consequently,<br> the net impact in the consolidated income statement was nil. |
| --- | --- |
| 1.5.4. | Financial income and expenses |
| --- | --- |
Financial income and expenses break down as follows:
| Financial income and expenses<br> <br>In thousands of euros | First-half<br><br> 2022 | First-half<br><br> 2021 | ||||
|---|---|---|---|---|---|---|
| Income from cash<br> equivalents | 140 | 11 | ||||
| Foreign<br> exchange gains | 4,019 | 2,967 | ||||
| Total<br> financial income | 4,159 | 2,978 | ||||
| Interest cost | (120 | ) | (48 | ) | ||
| Foreign exchange losses | (49 | ) | (1,453 | ) | ||
| Losses on fair value variation | - | (651 | ) | |||
| Other<br> financial expenses | (7 | ) | (2 | ) | ||
| Total<br> financial expenses | (177 | ) | (2,154 | ) | ||
| Net<br> financial income | 3,983 | 824 |
Net financial income for the first half of 2022 increased by €3.2 million compared to the first half of 2021. This increase is mainly due to:
| - | Increase<br> of foreign exchange gains by €1.1 million generated by cash and cash equivalents in<br> foreign currency, which are attributable to the appreciation of the U.S. dollar against the<br> euro during the first half of 2022; |
|---|---|
| - | foreign<br> exchange losses of the first half of 2021 resulted from the unfavorable position of the foreign<br> currency term deposit contracts at the maturity date for €1.5 million; and |
| --- | --- |
| - | losses<br> from changes in fair value of the first half of 2021 resulted from the unwinding of three<br> foreign currency forward contracts for an aggregate of €0.7 million. |
| --- | --- |
| 1.5.5. | Income tax |
| --- | --- |
In accordance with IAS 34, the income tax recognized in the financial statements for each interim period is adjusted based on a best estimate calculated by applying the expected weighted average tax rate for the entire year.
Current taxes
As the imputation of tax losses on tax benefits of Inventiva S.A., at short or mid-term, were considered unlikely due to the growth phase of the company and regarding the nil projected tax rate as of December 31, 2022, no current taxes were recorded as of June 30, 2022, for Inventiva S.A.
17
Deferred taxes
Inventiva S.A. recorded tax losses in the first half of 2022. As recovery of these losses in future periods is considered unlikely due to the uncertainty inherent to the Company’s activity, no deferred tax assets were recognized on this basis on June 30, 2022.
| 1.5.6. | Net loss for the period |
|---|
Inventiva recorded a net loss of €29.5 million in the first half of 2022 versus a loss of €23.1 million in first half of 2021, which was an increase in net loss of €6.3 million year over year.
18
| 1.6. | Analysis of the financial situation |
|---|---|
| 1.6.1. | Non-current assets |
| --- | --- |
Non-current assets consist of:
| - | other<br> non-current assets mainly comprising term accounts with progressive interest rate; | |||
|---|---|---|---|---|
| - | property,<br> plant, and equipment, mainly comprising assets acquired on the incorporation of the Company<br> and the right of use from Fibroscans leasing; and | |||
| --- | --- | |||
| - | intangible<br> assets, mainly comprising the compound and software library. | |||
| --- | --- | |||
| Non-current assets | ||||
| --- | --- | --- | --- | --- |
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||
| Intangible assets | 670 | 770 | ||
| Property, plant and equipment | 6,166 | 3,197 | ||
| Other non-current assets | 1,629 | 2,442 | ||
| Total non-current assets | 8,464 | 6,408 |
Non-current assets increased by €2.0 million (32%) compared to December 31, 2021.
This was mainly attributable to:
| - | the<br> €3.0 million increase of property, plant and equipment net value mainly due to the acquisition<br> of right-of-use of Fibroscans (see note 4.2 - Property, plant and equipment of section<br> 3. Unaudited interim condensed consolidated financial statements); partly offset by, | |||
|---|---|---|---|---|
| - | the<br> €0.8 million decrease due to the €1.0 million term accounts change in maturity<br> and an increase in the advance payment to the supplier PRA under the CRO contract for €0.2<br> million. (See note 4.3 - Other non-current assets of section 3. Unaudited interim condensed consolidated financial statements); | |||
| --- | --- | |||
| 1.6.2. | Current assets | |||
| --- | --- | |||
| Current assets | ||||
| --- | --- | --- | --- | --- |
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||
| Inventories | 355 | 392 | ||
| Trade receivables | 1 | 4,000 | ||
| Tax receivables | 3,491 | 4,373 | ||
| Other current assets | 19,677 | 20,260 | ||
| Cash and cash equivalents | 76,406 | 86,553 | ||
| Total current assets | 99,930 | 115,577 |
Current assets decreased by €15,6 million (14%) compared to December 31, 2021.
This was mainly attributable to:
| - | the<br> €10.1 million (12%) decrease in cash and cash equivalents related to the Company’s<br> activity (see section 2 Cash flow and equity of this Interim Financial Report); |
|---|---|
| - | the<br> €4.0 million decrease in trade receivables related to the milestone payment received<br> on January 31, 2022, following the initiation of the Phase IIb trial for cedirogant<br> (see note 4.6 - Trade receivables and other current assets of section 3. Unaudited interim condensed consolidated financial statements); |
| --- | --- |
19
| - | tax<br> receivables mainly include CIR and other tax research credits receivables related to the<br> first half of 2022 for €3.5 million as the CIR 2021 receivables of €3.6 million<br> was collected in June 2022. As of December 31, 2021, tax receivables were composed<br> of CIR and other tax research credits receivables related to the entire 2021 year, hence<br> the €0.9 million decrease (20%) compared to December 31, 2021; and | |||||
|---|---|---|---|---|---|---|
| - | the<br> €0.6 million decreases in other receivables, mainly due to: | |||||
| --- | --- | |||||
| o | an<br> increase term deposit accounts for €1.9 million; | |||||
| --- | --- | |||||
| o | a<br> decrease in prepaid expenses for €1.9 million, mainly corresponding to trial costs incurred<br> under the CRO contracts with third parties; and | |||||
| --- | --- | |||||
| o | a<br> decrease in foreign currency forwards for €0.4 million. | |||||
| --- | --- | |||||
| 1.6.3. | Shareholders’ equity | |||||
| --- | --- | |||||
| Shareholders’ equity | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||||
| Share capital | 421 | 409 | ||||
| Premiums related to share capital | 173,893 | 165,072 | ||||
| Net loss for the period | (29,466 | ) | (49,635 | ) | ||
| Reserves | (74,881 | ) | (26,815 | ) | ||
| Currency translation reserves | (240 | ) | (164 | ) | ||
| Total shareholders' equity | 69,727 | 88,866 |
Shareholders’ equity decreased by €19.1 million, or 22%, compared to December 31, 2021. This change is mainly due to net loss for the current period for €29.5 million, offset by increase of €8.8 million net related to the ATM.
Changes in shareholders’ equity during the first six months of 2022 are described in further detail in note 4.8 - Shareholders’ equity of section 3. Unaudited interim condensed consolidated financial statements of this Interim Financial Report and in section 2 Cash flowand equity of this Interim Financial Report.
| 1.6.4. | Non-current liabilities | |||
|---|---|---|---|---|
| Non-current liabilities | ||||
| --- | --- | --- | --- | --- |
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||
| Long-term debt | 13,437 | 8,837 | ||
| Long-term provisions | - | - | ||
| Provisions for retirement benefit obligations | 1,184 | 1,429 | ||
| Total non-current liabilities | 14,621 | 10,266 |
The €4.3 million (42%) increase of non-current liabilities compared to December 31, 2021, is mainly due to the €4.6 million increase of long-term debt following the three bank loans completion amounted to €5.3 million during the period (see notes 4.9 - Financial debt of section 3. Unaudited interim condensed consolidated financial statements and section 2. Cash flow and equity).
20
| 1.6.5. | Current liabilities | |||
|---|---|---|---|---|
| Current liabilities | ||||
| --- | --- | --- | --- | --- |
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||
| Short-term debt | 5,094 | 1,282 | ||
| Trade payables | 14,253 | 14,602 | ||
| Short-term provisions | - | 180 | ||
| Other current liabilities | 4,698 | 6,789 | ||
| Total current liabilities | 24,046 | 22,853 |
Current liabilities increased by €1.2 million (5%) for the six months ended June 30, 2022, compared to December 31, 2021. This change is mainly due to the €3.8 million increase of short-term debt (see notes 4.9 - Financial debt of section 3. Unauditedinterim condensed consolidated financial statements and section 2. Cash flow and equity), partially offset by the €2.1 million decrease (31%) in other current liabilities due to the unwinding of litigation about payroll tax and CIR.
Following the tax dispute settlement submission received on February 15, 2022, and accepted by the Company, accruals accounted as other current liabilities has been settled during the first half of 2022 with:
| - | a<br> €0.4 million payment, |
|---|---|
| - | the<br> imputation on a €1.9 million VAT credit, |
| --- | --- |
| - | the<br> CIR 2017 tax relief amounted to €0.2 million and €0.3 million receivables related<br> to the CIR 2013 – 2015 corrective statement. |
| --- | --- |
21
| 2. | Cash flow and equity |
|---|
This section discusses the Company’s shareholders’ equity, cash position and sources of funding for the six months ended June 30, 2022, and the fiscal year ended December 31, 2021.
| 2.1. | Cash and cash equivalents | |||
|---|---|---|---|---|
| Net cash and cash equivalents | ||||
| --- | --- | --- | --- | --- |
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||
| Other cash equivalents | 37,041 | 42,900 | ||
| Cash at bank and at hand | 39,365 | 43,653 | ||
| Cash and cash equivalents | 76,406 | 86,553 |
As of June 30, 2022, cash and cash equivalents amounted to €76.4 million compared to €86.6 million as of December 31, 2021, with a decrease of €10.1 million (12%), mainly related to the Company's ongoing research activities, in particular the Phase III trial with lanifibranor for the treatment of NASH and, to a lesser extent, to the Phase II LEGEND trial.
Cash at hand and marketable securities held by the Company are generally invested in short-term deposit accounts that are readily convertible into known amounts of cash.
Cash at hand and marketable securities are used to finance the Company's activities, in particular its R&D costs.
After deducting debt, the Company has a net cash surplus as of June 30, 2022. Borrowings are set out in section 2.1.2 Financing from bank loansbelow.
| Analysis of debt | ||||||
|---|---|---|---|---|---|---|
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||||
| Cash and cash equivalents | (76,406 | ) | (86,553 | ) | ||
| Current financial liabilities^(1)^ | 5,094 | 1,282 | ||||
| Current debt (A) | 5,094 | 1,282 | ||||
| Non-current financial liabilities^(1)^ | 13,437 | 8,837 | ||||
| Non-current debt (B) | 13,437 | 8,837 | ||||
| Total debt (A) + (B) | 18,531 | 10,119 | ||||
| Net debt | (57,875 | ) | (76,434 | ) | ||
| ^(1)^ | Including<br> accrued interests payable on loans | |||||
| --- | --- |
There are no restrictions on the use of the Company’s cash and cash equivalents resources.
| 2.1.1. | Equity financing |
|---|
As of June 30, 2022, the Company’s share capital increased by €12.6 thousand compared to December 31, 2021, up to €421.3 thousand.
On June 15, 2022, the Company issued and sold 1,260,618 ADSs for a gross amount of €9.4 million pursuant to the ATM program established on August 2, 2021, at price of $7.75 per new ADS, which represents a discount of 0.92% to the volume weighted average price of the Company's shares on Euronext Paris over the last trading day (€7.43 equivalent to an exchange rate of 1.0431 USD/€). This resulted in a capital increase in nominal value of €12,606 and a net contribution of €8.8 million.
22
The capital increases carried out by the Company prior to January 1, 2022, have been its main source of financing since its creation (see section 4.5. Cash flow and equity of the Universal Registration Document 2021).
| 2.1.2. | Financing from bank loans | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Analysis of debt<br><br> In thousands of euros | Debt carried on<br><br>the balance<br><br>sheet at<br><br>Jan. 1, 2022 | Proceeds<br><br>(+) | Repayments<br><br>(-) | Exchangerategain/losses(+/-) | Debt carried on<br><br>the balance<br><br>sheet on<br><br>June 30, 2022 | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Lease liabilities | 130 | 3,278 | (223 | ) | 9 | 3,193 | |||||
| PGE SG 2020 (state-guaranteed) | 3,339 | - | - | - | 3,339 | ||||||
| PGE CA 2020 (state-guaranteed) | 3,339 | - | - | - | 3,339 | ||||||
| PGE BPI France 2020 (state-guaranteed) | 3,300 | - | - | - | 3,300 | ||||||
| PGE BPI France 2022 (state-guaranteed) | - | 1,780 | - | - | 1,780 | ||||||
| PPR SG 2022 | - | 1,780 | - | - | 1,780 | ||||||
| PPR CA 2022 | - | 1,780 | - | - | 1,780 | ||||||
| Other^(1)^ | 11 | - | 8 | - | 19 | ||||||
| Total | 10,119 | 8,618 | (215 | ) | 9 | 18,531 | |||||
| ^(1)^ | Including<br> accrued interests payable on loans | ||||||||||
| --- | --- |
The Company has entered into six loan agreements:
| - | a<br> loan of €3,3 million at a fixed rate of 0.25% in the form of a State Guaranteed Loan<br> (PGE) concluded on May 12, 2020, with Société Générale for<br> an initial term of 12 months. In accordance with the measures put in place by the French<br> State in the context of the health crisis linked to COVID-19, the Company had decided to<br> extend the franchise period until September 2022. The amendment was signed on May 12,<br> 2021 and stipulates that the capital repayment will be spread over four years starting in<br> September 2022 with a revised annual interest rate of 0.58%. |
|---|---|
| - | a<br> loan of €3.3 million at a fixed rate of 0.00% in the form of a State Guaranteed Loan<br> (SGL) signed on May 19, 2020, with Crédit Agricole for an initial term of 12<br> months. In accordance with the measures put in place by the French State in the context of<br> the health crisis linked to COVID-19, the Company had decided to extend the grace period<br> until September 2022. The amendment was signed on May 5, 2021, and stipulates that<br> the capital repayment will be spread over four years starting in September 2022 with<br> a revised annual interest rate of 0.55%. |
| --- | --- |
| - | a<br> loan of €3.3 million at a fixed rate of 2.35% in the form of a State Guaranteed Loan<br> (PGE) signed on May 18, 2020, with BPI for an initial term of 12 months. In accordance<br> with the measures put in place by the French State in the context of the health crisis linked<br> to COVID-19, the Company decided to extend the grace period until September 2022. The<br> amendment was signed on March 30, 2021, and stipulates that the capital repayment will<br> be spread over four years starting in September 2022 with a revised annual interest<br> rate of 3.35%. |
| --- | --- |
23
| - | a<br> loan of €1.8 million at a fixed rate of 4.65% in the form of a Recovery Participating<br> Loan (PPR) signed on June 9, 2022, with Société Générale<br> for an initial duration of 8 years and a deferred repayment of 4 years. The repayment will<br> commence July 6, 2026 until June 10, 2030. |
|---|---|
| - | a<br> loan of €1.8 million at a fixed rate of 2.35% in the form of a State Guaranteed Loan<br> (PGE) signed on June 10, 2022, with BPI, in addition to the previous one, for an initial<br> term of 12 months, with the ability to extend to the same maturity as the existing PGE. |
| --- | --- |
| - | a<br> loan of €1.8 million at a fixed rate of 4.20% in the form of a Recovery Participating<br> Loan (PPR) signed on June 24, 2022, with Crédit Agricole for an initial duration<br> of 8 years and a deferred repayment of 4 years. The repayment will commence June 24,<br> 2027 until June 24, 2030. |
| --- | --- |
These funds obtained in the form of PGE and PPR are expected to be used primarily for the Company's operating activities and the development of Phase III clinical trial of lanifibranor.
As of June 30, 2022, no funds have been received from the EIB, as the conditions precedent have not yet been met. The Company has entered into a licensing and collaboration agreement with Sino Biopharm, and the Company should receive an initial payment of $12 million (described in section 1.3 – Recent events and perspectives) in connection with the signing of this agreement. Upon receipt of the initial payment, the condition precedent of the first tranche, in regards of the receipt by the Company of an aggregate amount of at least €18 million, will be met.
On June 30, 2022, these loans do not impose any financial commitments on the Company (see note 6.1 - Commitments related to operational activities of section 3. Unaudited interim condensed consolidated financial statements).
Inventiva’s loans and debt maturity profile as of June 30, 2022 is as follows:
| June 30, 2022<br> <br>In thousands of euros | Less than<br><br>1 year | Between 1 and<br><br>3 years | Between 3 and<br><br>5 years | More than<br><br>5 years |
|---|---|---|---|---|
| Bank borrowings | 4,266 | 7,498 | 1,780 | 1,780 |
| Other loans and similar borrowings^(1)^ | - | 14 | - | - |
| Lease liabilities | 829 | 2,365 | - | - |
| Total loans and similar borrowings | 5,094 | 9,877 | 1,780 | 1,780 |
*^(1)^*Includingaccrued interests payable on loans.
| 2.1.3. | Financing from Research TaxCredits |
|---|
Due to its status as a European small and medium-sized enterprise (“SME”), the Company receives payment for research tax credits granted in the previous period. Consequently, cash proceeds from research tax credits in a given period correspond to the amount of credits calculated on eligible expenditure for the previous period.
In the first half of 2022, the Company received the settlement of 2021 CIR of €3.6 million (see notes 1.2 “Significant events in the firsthalf of 2022” and 4.6 “Trade receivables and other current assets”).
24
Research tax credits during the six months ended June 30, 2022 and June 30, 2021 were as follows:
| Financing from research tax credits<br> <br>In thousands of euros | First half 2022 | First half 2021 | ||
|---|---|---|---|---|
| Income statement impact of research tax credits | 3,210 | 1,849 | ||
| Cash flow impact of research tax credits | 3,553 | 7,957 |
At June 30, 2022, the income statement impact of CIR and other research tax credits included €3.1 million in research tax credits granted with respect to the first half of 2022 of which €2.9 million for Inventiva S.A. and €0.2 million for Inventiva Inc., and €0.1 million regarding a corrective claim on CIR 2021.
The increase of €1.4 million compared to the first half of 2021 is primarily attributable to the increase in research and development expenses incurred by the Company.
| 2.2. | Cash flow analysis |
|---|
The following table sets forth the Company’s cash flow for the first half of 2022 and the first half of 2021:
| Cash flow In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||
|---|---|---|---|---|
| Net cash used in operating activities | (26,221 | ) | (19,792 | ) |
| Net cash used in investing activities | (268 | ) | 4,740 | |
| Net cash from (used in) financing activities | 13,952 | 31 | ||
| Net increase (decrease) in cash and cash equivalents | (12,537 | ) | (15,021 | ) |
| Exchange gains / losses | 2,390 | 2,967 |
In the first half of 2022 and the first half of 2021, the main financing needs of the Company related to its operating activities, including its working capital requirements.
Net cash used in operating activities in the first half of 2021 and the first half of 2022 amounted to €19.8 million and €26.2 million, respectively. This increase is mainly attributable to the increase of cash used in operations, mainly due to the increase of research and development expenses, excluding depreciation, amortization, provision, and IFRS 2 expenses, of €9.9 million, offset by a €2.1 million decrease of working capital variation.
In the first half of 2021 and the first half of 2022, the main sources of the Company were as follow:
| - | Capital<br> increase: The capital increase carried out in June 2022, as part of the ATM program<br> implementing on August 2, 2021, generated a €8.8 million net contribution (see<br> section 1.2 “Significant events in the first half of 2022”) |
|---|---|
| - | Subscription<br> of borrowings: the three loans obtained by the Company for a total of €5.3 million in<br> the form of two Recovery Participating Loans (PPR) and a State Guaranteed Loan complement<br> (PGE), of €1.8 million each, which are guaranteed by the French State. |
| --- | --- |
25
| 2.2.1. | Cash flow linked to operatingactivities | |||||
|---|---|---|---|---|---|---|
| In thousands of euros | First-half<br><br>2022 | First-half<br><br>2021 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Net loss for the period | (29,466 | ) | (23,136 | ) | ||
| Eliminationof non-cash or non-operating income and expenses | ||||||
| Depreciation, amortization and provisions | 635 | 534 | ||||
| Deferred and current taxes | (74 | ) | 22 | |||
| Tax credits | (2,639 | ) | (2,455 | ) | ||
| Cost of net debt | 54 | 82 | ||||
| IFRS 2 expenses | 1,643 | 623 | ||||
| Unrealized foreign exchange losses/(gains) | (3,284 | ) | (1,529 | ) | ||
| Change in fair value through profit (or loss) | - | 651 | ||||
| Other | - | 605 | ||||
| Cash flows used in operations before tax, interest and changes in working capital | (33,130 | ) | (24,603 | ) | ||
| Increase (decrease) in operating and other receivables | 3,894 | (73 | ) | |||
| (Increase) decrease in operating and other payables | (2,410 | ) | 909 | |||
| Increase (decrease) in inventories | 37 | (114 | ) | |||
| Tax credit received | 3,553 | 7,957 | ||||
| Other | 1,835 | (3,868 | ) | |||
| Tax, interest and changes in operating working capital | 6,910 | 4,811 | ||||
| Net cash used in operating activities | (26,221 | ) | (19,792 | ) |
Cash flow used in operating activities increased by €6.4 million in the first half of 2022 in comparison with the first half of 2021.
This increase in the cash requirement is mainly attributable to:
| - | the<br> €10.8 million increase in operating expenses excluding depreciation, amortization,<br> provision, and IFRS 2 expenses, compared to the first half of 2021, mainly linked to the<br> increase in research and development costs related to the development of Phase III clinical<br> trial of lanifibranor for the treatment of NASH; and offset by |
|---|---|
| - | €2.1<br> million decrease in the change in working capital related to operations, mainly due to changes<br> in other current assets over the periods concerned. |
| --- | --- |
26
| 2.2.2. | Cash flow linked to investingactivities |
|---|
Cash flow used in investing activities over the periods presented was as follows:
| In thousands of euros | First-half<br><br>2022 | First-half<br><br>2021 | ||||
|---|---|---|---|---|---|---|
| Purchases of property, plant and equipment and intangible assets | (296 | ) | (158 | ) | ||
| Disposals of property, plant and equipment and intangible assets | 24 | 54 | ||||
| (Increase)/decrease in current term accounts | - | 5,893 | ||||
| Net change in other non-current financial assets | 4 | (1,048 | ) | |||
| Net cash used in investing activities | (268 | ) | 4,740 |
In the first half of 2021, the increase of net cash used in investing activities was mainly attributable to the unwinding of short-term deposit accounts in foreign currency for a total amount of €5.9 million (excluding exchange rate gains and losses).
| 2.2.3. | Cash flow linked to financingactivities | |||||
|---|---|---|---|---|---|---|
| In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Capital increase | 8,834 | 49 | ||||
| Subscription of borrowings | 5,340 | - | ||||
| Repayment of debt | - | (13 | ) | |||
| Repayment of lease liabilities | (223 | ) | (5 | ) | ||
| Net cash from (used in) financing activities | 13,952 | 31 |
In the first half of 2022, net cash flows from financing operations amounted to €13.9 million, compared to €31 thousand in the first half of 2021. This was attributable to the following financing operations:
| - | the<br> € 8.8 million capital net increase carried out in June 2022 as part of the<br> ATM program; and |
|---|---|
| - | the<br> three loans for a total amount of €5.3 million obtained from a syndicate of French banks,<br> in the form of loans mainly guaranteed by the French State. |
| --- | --- |
| 2.3. | Anticipated sources of funds |
| --- | --- |
Cash and cash equivalents amounted to €76.4 million at June 30, 2022.
The Company expects to use the following sources of financing to fund its future operations:
| - | the<br> potential milestone payments under its partnership with AbbVie; |
|---|---|
| - | the<br> potential capital increases through the ATM program; |
| --- | --- |
| - | the<br> research tax credits; |
| --- | --- |
| - | the<br> initial payment of $12 million under the license and collaboration agreement signed with<br> Sino Biopharm (described in section 1.3 – Recent events and perspectives) which<br> is expected by the end of 2022; |
| --- | --- |
27
| - | the<br> potential recourse to the financing contract concluded with the EIB, whose condition precedent<br> of the first tranche, in regards of the receipt by the Company of an aggregate amount of<br> at least €18 million, will be met, upon receipt of the initial payment under the license<br> and collaboration agreement signed with Sino Biopharm, which should support the disbursement<br> of the first tranche of €25 million; and |
|---|---|
| - | Global<br> or regional business development partnerships in non-strategic territories. |
| --- | --- |
The Company expects that its net cash and cash equivalents at June 30, 2022, which is the primary source of funding for the Company, should allow the Company to finance its activities until the fourth quarter of 2023, including the expected $12 million upfront payment under the license and collaboration agreement signed with Sino Biopharm and the potential first €25 million tranche of the EIB facility^2^
^2^ This estimate is based on the Company’s current business plan and excludes any potential milestones payable to or by the Company and any additional expenditures related to the potential continued development of the odiparcil program or resulting from the potential in-licensing or acquisition of additional product candidates or technologies, or any associated development the Company may pursue. The Company may have based this estimate on assumptions that are incorrect and the Company may end up using its resources sooner than anticipated.
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| 3. | Unaudited interim condensedconsolidated financial statements |
|---|
Statutory Auditors’ ReviewReport on the Half-yearly Financial Information
This is a free translation into Englishof the statutory auditors’ review report on the half-yearly financial information issued in French and is provided solely for theconvenience of English-speaking users. This report includes information relating to the specific verification of information given inthe Group’s half-yearly management report. This report should be read in conjunction with, and construed in accordance with, Frenchlaw and professional standards applicable in France.
| Inventiva S.A. |
|---|
| Registered<br> office: 50, rue de Dijon - 21121 Daix |
| Statutory Auditors’ Review Report on the Half-yearly Financial Information |
| For<br> the period from January 1 to June 30, 2022 |
| Ladies<br> and Gentlemen, |
In compliance with the assignment entrusted to us by your General Annual Meeting and in accordance with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code ("Code monétaire et financier"), we hereby report to you on:
| • | the<br> review of the accompanying condensed half-yearly consolidated financial statements of Inventiva<br> S.A., for the period from January 1 to June 30, 2021, |
|---|---|
| • | the<br> verification of the information presented in the half-yearly management report. |
| --- | --- |
These condensed half-yearly consolidated financial statements are the responsibility of the Board of Directors. Our role is to express a conclusion on these financial statements based on our review.
I. Conclusionon the financial statements
We conducted our review in accordance with professional standards applicable in France.
A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-yearly consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 - standard of the IFRSs as adopted by the European Union applicable to interim financial information.
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II. Specificverification
We have also verified the information presented in the half-yearly management report on the condensed half-yearly consolidated financial statements subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-yearly consolidated financial statements.
| Paris<br> La Défense, on the September 21, 2022 | Paris,<br> on the September 21, 2022 |
|---|---|
| Cédric<br> Adens | Lison<br> Dahan-Chouraki |
30
Unaudited interimcondensed consolidated statement of financial position
(in thousandsof euros)
| Notes | June 30,2022 | Dec. 31,<br><br>2021 | |||||
|---|---|---|---|---|---|---|---|
| Intangible assets | 4.1 | 670 | 770 | ||||
| Property, plant and equipment | 4.2 | 6,165 | 3,196 | ||||
| Other non-current assets | 4.3 | 1,629 | 2,442 | ||||
| Total non-current assets | 8,464 | 6,408 | |||||
| Inventories | 4.5 | 355 | 392 | ||||
| Trade receivables | 4.6 | 1 | 4,000 | ||||
| Tax receivables | 4.6 | 3,491 | 4,373 | ||||
| Other current assets | 4.6 | 19,677 | 20,260 | ||||
| Cash and cash equivalents | 4.7 | 76,406 | 86,553 | ||||
| Total current assets | 99,930 | 115,578 | |||||
| Total assets | 108,394 | 121,985 | |||||
| Share capital | 4.8 | 421 | 409 | ||||
| Premiums related to share capital | 4.8 | 173,893 | 165,072 | ||||
| Reserves | 4.8 | (74,881 | ) | (26,815 | ) | ||
| Translation reserve | 4.8 | (240 | ) | (164 | ) | ||
| Net loss for the period | 4.8 | (29,466 | ) | (49,635 | ) | ||
| Shareholders’ equity | 69,727 | 88,866 | |||||
| Long-term debt | 4.9 | 13,437 | 8,837 | ||||
| Provisions for retirement benefit obligations | 4.11 | 1,184 | 1,429 | ||||
| Total non-current liabilities | 14,621 | 10,266 | |||||
| Short-term debt | 4.9 | 5,094 | 1,282 | ||||
| Trade payables | 4.12 | 14,253 | 14,602 | ||||
| Short-term provisions | 4.10 | - | 180 | ||||
| Other current liabilities | 4.12 | 4,698 | 6,789 | ||||
| Total current liabilities | 24,046 | 22,853 | |||||
| Total equity and liabilities | 108,394 | 121,985 |
The accompanyingnotes form an integral part of these financial statements
31
Unaudited interimcondensed consolidated statement of (income) loss
(in thousandsof euros)
| Six months ended | |||||||
|---|---|---|---|---|---|---|---|
| Notes | June 30, 2022 | June 30, 2021 | |||||
| Revenue | 5.1 | 67 | 139 | ||||
| Other income | 5.1 | 3,325 | 2,009 | ||||
| Research and development costs | 5.2 | (29,866 | ) | (19,109 | ) | ||
| Marketing – Business development expenses | 5.2 | (278 | ) | (258 | ) | ||
| General and administrative expenses | 5.2 | (6,847 | ) | (5,779 | ) | ||
| Other operating income (expenses) | 5.3 | 131 | (607 | ) | |||
| Net operating loss | (33,468 | ) | (23,605 | ) | |||
| Financial income | 5.4 | 4,159 | 2,978 | ||||
| Financial expenses | 5.4 | (177 | ) | (2,154 | ) | ||
| Net financial income | 3,983 | 824 | |||||
| Income (expense) tax | 5.5 | 19 | (355 | ) | |||
| Net loss for the period | (29,466 | ) | (23,136 | ) | |||
| Basic/diluted loss per share (euros/share) | (0.72 | ) | (0.60 | ) | |||
| Weighted average number of shares outstanding used to calculate basic/diluted loss per share | 5.6 | 40,864,457 | 38,677,187 |
The accompanyingnotes form an integral part of these financial statements
32
Unaudited interimcondensed consolidated statement of comprehensive (income) loss
(in thousandsof euros)
| Six months ended | ||||
|---|---|---|---|---|
| June 30, 2022 | June 30, 2021 | |||
| Net loss for the period | (29,466 | ) | (23,136 | ) |
| Items recycled to income | (75 | ) | (5 | ) |
| Exchange difference on translation of foreign operations | (75 | ) | (5 | ) |
| Items not recycled to income | 370 | 117 | ||
| Actuarial gains and losses on retirement benefit obligations (IAS 19) | 370 | 117 | ||
| Total comprehensive loss | (29,172 | ) | (23,023 | ) |
The accompanyingnotes form an integral part of these financial statements
33
Unaudited interimcondensed consolidated statement of changes in shareholders’ equity
(in thousandsof euros)
| Notes | Share<br> capital | Premiums<br> related to<br> share<br> capital | Net income<br> (loss) for<br> the period | Translation<br> reserves | Reserves | Shareholders’<br> equity | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| At Jan. 1, 2022 | 409 | 165,072 | (49,635 | ) | (164 | ) | (26,815 | ) | 88,866 | |||||||||
| Net (income) loss for the period | - | - | (29,466 | ) | - | - | (29,466 | ) | ||||||||||
| Actuarial gains and losses, net of deferred tax | - | - | - | - | 370 | 370 | ||||||||||||
| Change in actuarial gains and losses | - | - | - | (75 | ) | - | (75 | ) | ||||||||||
| Total comprehensive income (loss) | - | - | (29,466 | ) | (75 | ) | 370 | (29,172 | ) | |||||||||
| Appropriation of 2021 net (income) loss | - | - | 49,635 | - | (49,635 | ) | - | |||||||||||
| Issued of ordinary shares | 4.8 | 13 | 9,354 | - | - | - | 9,366 | |||||||||||
| Transaction costs | 4.8 | - | (532 | ) | - | - | - | (532 | ) | |||||||||
| Share-based payment compensation expenses | 4.8 | - | - | - | - | 1,643 | 1,643 | |||||||||||
| Treasury shares | - | - | - | - | (445 | ) | (445 | ) | ||||||||||
| At June 30, 2022 | 421 | 173,893 | (29,466 | ) | (240 | ) | (74,881 | ) | 69,727 | |||||||||
| Notes | Share<br><br>capital | Premiums<br><br>related to<br><br>share<br><br>capital | Net<br><br>income<br><br>(loss) for<br><br>the period | Translationreserves | Reserves | Shareholders’<br><br>equity | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| At Jan. 1, 2021 | 386 | 139,668 | (33,619 | ) | - | 4,777 | 111,211 | |||||||||||
| Net (income) loss for the period | - | - | (23,136 | ) | - | - | (23,136 | ) | ||||||||||
| Actuarial gains and losses, net of deferred tax | - | - | - | (5 | ) | - | (5 | ) | ||||||||||
| Change in actuarial gains and losses | - | - | - | - | 117 | 117 | ||||||||||||
| Total comprehensive income (loss) | - | - | (23,136 | ) | (5 | ) | 117 | (23,023 | ) | |||||||||
| Appropriation of 2020 net (income) loss | - | - | 33,619 | - | (33,619 | ) | - | |||||||||||
| Exercise of BSAs/BSPCEs and AGAs | 4.8 | 0 | - | - | - | (0 | ) | - | ||||||||||
| Share-based payments | 4.8 | - | - | - | - | 623 | 623 | |||||||||||
| Subscription premiums related to BSAs | - | - | - | - | 49 | 49 | ||||||||||||
| Treasury shares | - | - | - | - | (339 | ) | (339 | ) | ||||||||||
| At June 30, 2021 | 386 | 139,668 | (23,136 | ) | (5 | ) | (28,393 | ) | 88,520 |
The accompanyingnotes form an integral part of these financial statements
34
Unaudited interimcondensed consolidated statement of cash flows
(in thousandsof euros)
| First-half<br> <br>2022 | First-half<br> <br>2021 | |||||
|---|---|---|---|---|---|---|
| Net loss for the period | (29,455 | ) | (23,136 | ) | ||
| Eliminationof non-cash or non-operating income and expenses | ||||||
| Depreciation, amortization and provisions | 635 | 534 | ||||
| Deferred and current taxes | (74 | ) | 22 | |||
| Tax credits | (2,639 | ) | (2,455 | ) | ||
| Cost of net debt | 54 | 82 | ||||
| IFRS 2 expense | 1,643 | 623 | ||||
| Exchange (gains) / losses | (3,284 | ) | (1,529 | ) | ||
| Fair value variation through profit and loss | - | 651 | ||||
| Other | - | 605 | ||||
| Cash flows used in operations before tax, interest and changes in working capital | (33,130 | ) | (24,603 | ) | ||
| Increase (decrease) in operating and other receivables | 3,894 | (73 | ) | |||
| (Increase) decrease in operating and other payables | (2,410 | ) | 909 | |||
| Increase (decrease) in inventories | 37 | (114 | ) | |||
| Tax credit received | 3,553 | 7,957 | ||||
| Other | 1,835 | (3,868 | ) | |||
| Tax, interest and changes in operating working capital | 6,910 | 4,811 | ||||
| Net cash used in operating activities | (26,221 | ) | (19,792 | ) | ||
| Purchases of property, plant and equipment and intangible assets | (296 | ) | (158 | ) | ||
| Disposals of property, plant and equipment and intangible assets | 24 | 54 | ||||
| (Decrease) / Increase in short-term deposit accounts | - | 5,893 | ||||
| Net change in other non-current financial assets | 4 | (1,048 | ) | |||
| Net cash used in investing activities | (268 | ) | 4,740 | |||
| Capital increase | 8,834 | 49 | ||||
| Subscription of borrowings | 5,340 | - | ||||
| Repayment of debt | - | (13 | ) | |||
| Repayment of lease liabilities | (223 | ) | (5 | ) | ||
| Net cash from (used in) financing activities | 13,952 | 31 | ||||
| Net increase (decrease) in cash and cash equivalents | (12,537 | ) | (15,021 | ) | ||
| Cash and cash equivalents at beginning of period | 86,553 | 105,687 | ||||
| Exchange gains / (losses) | 2,390 | 2,967 | ||||
| Cash and cash equivalents at end of period | 76,406 | 93,633 |
The accompanyingnotes form an integral part of these financial statements
35
Notes to theunaudited interim condensed consolidated financial statements
Note 1. Companyinformation
| 1.1 | Company information |
|---|
Inventiva S.A. is a public limited company registered and domiciled in France. Its head office is located at 50 rue de Dijon, 21121 Daix. The consolidated financial statements of the company Inventiva include Inventiva S.A. and its subsidiary Inventiva Inc., created in January 2021 (the group designated as “Inventiva” or the “Company”).
Inventiva is a clinical-stage biopharmaceutical company focused on the development of oral small molecule therapies for the treatment of non-alcoholic steatohepatitis, or NASH, and other diseases with significant unmet medical need.
Leveraging its expertise and experience in the domain of compounds targeting nuclear receptors, transcription factors and epigenetic modulation, Inventiva is currently advancing Lanifibranor in the treatment for NASH, as well as a pipeline of earlier stage programs or oncology discovery.
Lanifibranor, its lead product candidate, is being developed for the treatment of patients with NASH, a chronic and progressive liver disease for which there are currently no approved therapies. In 2020, Inventiva announced positive topline data from its Phase IIb clinical trial evaluating lanifibranor for the treatment of patients with NASH and obtained Breakthrough Therapy and Fast Track designation. The Company initiated the preparations for the pivotal Phase III clinical trial of lanifibranor in NASH (“NATiV3”) in the second half of 2021 and a combination trial with lanifibranor and empagliflozin in patients with NASH and Type 2 Diabetes (“T2D”). The Company is now targeting the last patient first visit for NATiV3, the Company’s ongoing Phase III clinical trial evaluating lanifibranor in patients with NASH, for H2 2023, subject to the continuing implementation of measures to accelerate the enrollment rate. The delay the Company faces is primarily due to a higher than originally projected screen failure rate resulting in slower than anticipated enrollment rate. In addition, the Company continues to see slower than predicted site activation, screening and enrollment due to negative impacts from the COVID-19 pandemic and the Company continues to be unable to conduct clinical trial activities at sites originally located in Ukraine and Russia. Inventiva has implemented and is planning further measures designed to accelerate enrollment and reduce screen failures in the NATiV3 trial, and additional sites have been identified to help compensate for the inability to use sites in Ukraine and Russia. As of today, 297 clinical sites are activated. The publication of the topline results of the part 1 of NATiV3 is now targeted for second half of 2025, subject to the continuing implementation of measures to accelerate the enrollment rate.
Additionally, the Company has entered into a licensing and collaboration agreement with Sino Biopharm to develop and commercialize, subject to regulatory approval, lanifibranor for the treatment of NASH and other metabolic diseases in Greater China. Depending on the multiple factors, including Chinese regulatory authorities’ feedback, it is expected CTTQ will either join the ongoing NATiV3 Phase III clinical trial of lanifibranor in NASH or run an independent study. CTTQ will bear all costs associated with the trials conducted in Greater China.
36
Inventiva's pipeline also includes odiparcil for the treatment of patients with mucopolysaccharidosis type VI ("MPS VI"), a group of rare genetic diseases. Inventiva believes the potential for an efficient development pathway for odiparcil for the treatment of MPS VI exists based on FDA feedback and continues to review potential options to further development of odiparcil for the treatment of MPS VI, which may include pursuing a partnership.
Inventiva has a strategic collaboration with AbbVie Inc. (“AbbVie”) in the area of autoimmune diseases. AbbVie has started the clinical development of cedirogant (formerly ABBV-157), a drug candidate for the treatment of moderate to severe psoriasis resulting from its collaboration with Inventiva. Following the achievement of clinical proof of concept during Phase Ib clinical trial, AbbVie has decided in November 2021 to launch the drug candidate into Phase IIb development for cedirogant in adults with moderate to severe plaque psoriasis, which is expected to be completed in the first quarter 2023.
Inventiva’s ordinary shares have been listed on compartment C of Euronext Paris regulated market since February 2017 and Inventiva’s American Depositary Shares (ADSs), each representing one ordinary share, have been listed on the Nasdaq Global Market since July 2020.
37
| 1.2 | Significant events in the firsthalf of 2022 |
|---|
Business
Amendments tocontract research organization (“CRO”) Agreement with Pharmaceutical Research Associates B.V.
Effective January 14, 2022, in connection with the conduct of the LEGEND Phase IIa clinical trial, the Company entered into an agreement with Pharmaceutical Research Associates Group B.V. ("PRA"), a CRO. Under the terms of the agreement, PRA is to support a clinical trial to evaluate the patient benefit of the combination of lanifibranor with empagliflozin, an SGLT2 inhibitor, in patients with T2D and non-cirrhotic NASH. The Company will pay a total amount of €7.9 million for the services rendered (directly and indirectly) by the CRO over the two years period following the date of the contract.
On February 1, 2022, the Company amended its April 2021 agreement with PRA related to the Phase III clinical trial in NASH (“NATiV3”) to include a bonus and malus mechanism. Depending on whether PRA reaches four milestones in the NATiV3 clinical trial before or after certain dates, PRA will receive a bonus or pay the Company a malus. The bonus and malus scheme is capped at €3.4 million.
On April 12, 2022, the Company further amended its agreement with PRA related to the NATiV3 clinical trial to extend the timelines, with respect to the milestones, and to revise the country/site distribution of the trial. Inventiva is obligated to pay PRA up to an aggregate of €221.7 million under this NATiV3 PRA agreement.
As of June 30, 2022, the total amount still to be paid under the LEGEND and NATiV3 PRA agreements amounts to €207.0 million.
Service Agreementwith Summit Clinical Research LLC ("Summit")
In February 2022, the Company entered a service contract with Summit in connection with the NATiV3 trial. Under the terms of the agreement, Summit is to provide services to support recruitment and commitment of volunteers for the NATiV3 clinical trial. The Company agreed to pay for the services rendered by Summit over the entire period from the effective date of the contract to March 2029, for a minimum amount of $4.4 million in the aggregate over the term of the agreement. If the Company requests Summit to extend the services rendered, this amount may increase by approximately $1.6 million.
Ongoing taxdispute settlement
On February 15, 2022, the Company received a global settlement from the French tax authorities regarding the tax audit carried out on payroll taxes for 2016 and 2017, and on French Research Tax Credit (“CIR”) 2013 to 2015. This proposal has been accepted by the Company. On June 30, 2022, accruals of €2.8 million accounted as other current liabilities as of December 31, 2021, have been settled by a €0.4 million payment, by the offset against a VAT credit of €1.9 million, and by the write-off of CIR 2017 receivables in the amount of €0.2 million and €0.3 million receivables related to the CIR 2013 – 2015 corrective statement (see note 4.10 "Provisions" and note 4.12 "Other current liabilities").
Equity financing
Fundraisingof €9.4 million in At-The-Market program
On June 15, 2022, the Company raised €9.4 million by issuing and selling 1,260,618 American Depositary Shares (“ADS”) pursuant to its At-The-Market (“ATM”) program, established on August 2, 2021. at a price of USD 7.75 per ADS, representing a discount of 0.92% to the volume-weighted average trading price of the Company's ADSs during the prior day’s trading session (equivalent to €7.43 at an exchange rate of 1.0431 USD/€). Each ADS represents one ordinary share of the Company.
38
Changes in shareholders’ equity during the first six months of 2022 are described in further detail in note 4.8 “Shareholders’ equity”.
Bank financingand cash flow
Payments receivedfrom the Research Tax Credit (“CIR”)
On April 21, 2022, the Company received French Research tax credits (crédit d'impôt recherche or "CIR”) for the fiscal year 2021, totaling €3.6 million.
Inventiva securesa €50 million credit facility from the European Investment Bank (“EIB”), subject to conditions
On May 16, 2022, the Company entered into a finance contract with the European Investment Bank for up to €50 million (the “Finance Contract”) to support the Company’s preclinical and clinical pipeline, including to fund a portion of its Phase III clinical trial of lanifibranor in patients with non-alcoholic steatohepatitis.
The Finance Contract provides for funding in two equal tranches of €25 million. The disbursement of the first tranche is subject to, among other conditions, (i) the Company issuing warrants to EIB, in accordance with the terms and conditions of the warrants agreement entered into July 1, 2022, and (ii) the receipt by the Company of an aggregate amount of at least €18 million, obtained either through the issuance of new shares in the Company or through the receipt of upfront or milestone payments from the business development activities on the Company's various assets (at June 30, 2022, the Company had received €9.4 million through a capital increase under the At-The-Market financing program, as described in note 1.2 “Significant events in the first half of 2022” and is eligible to receive an upfront payment of $12 million following the conclusion of the license and collaboration agreement with Sino Biopharm), and the disbursement of the second tranche under the Finance Contract is also subject to, among other conditions, (i) the full drawdown of the first tranche, (ii) the receipt by the Company from the date of the Finance Contract of an aggregate amount of at least €70 million (inclusive of the €18 million set forth above), paid either in exchange for Company shares, or through upfront or milestone payments, (iii) (a) an out-licensing, partnership or royalty transaction with an upfront payment of at least €10 million, or (b) the initiation of a Phase III clinical trial of cedirogant by AbbVie Inc; and (iv) operational criteria based on patient enrollment and number of sites activated in the Company’s Phase III clinical trial of lanifibranor in patients with NASH. Any funds not disbursed within 36 months following the execution of the Finance Contract shall be cancelled.. The disbursement of the funds under the Finance Contract is also subject to the Company receiving certain upfront or milestone payments. The conditions precedent and upfront payment events are described in note 4.9 “Financial debts”.
Borrowings under the Finance Contract shall bear an interest rate equal to 8% per annum for the first tranche and 7% per annum for the second tranche. Each tranche shall be repayable in a single instalment on the maturity date of the relevant tranche, which shall be no later than four years after the disbursement of the first tranche and no later than three years after the disbursement of the second tranche.
Inventiva obtainsnon-dilutive financing of €5.3 million in the form of an additional French state-guaranteed loan and two equity recovery loans
In June 2022, the Company entered into three loan agreements with a syndicate of French banks for a total amount of €5.3 million. Implemented as part of a state-guaranteed PGE loan facility ("Prêt Garanti par l’Etat") with Bpifrance and two loans from a stimulus economic plan ("Prêts Participatifs Relance") granted by Crédit Agricole Champagne-Bourgogne and Société Générale, they are in large part guaranteed by the French State and have a duration of eight-year and a four-year repayment schedule.
39
The additional French state-guaranteed loan granted by BPI France is guaranteed for up to 90% by the French state and has a maturity aligned with the existing PGE for which the Company has opted for a linear repayment extension until May 2026.
The two equity recovery loans, obtained as part of a French government initiative to support companies, have been granted by Crédit Agricole Champagne-Bourgogne and Société Générale. They are guaranteed predominantly by the state and feature an eight-year financing period and a four-year repayment period.
Receipt of a €4 million milestone payment from AbbVie following the initiation of the Phase IIb trial for cedirogant
On January 31, 2022, the Company announced the receipt of a €4.0 million milestone payment from AbbVie, following the enrollment of the first psoriasis patient in the ongoing Phase IIb clinical trial with cedirogant (formerly ABBV-157), an oral RORy reverse agonist jointly discovered by Inventiva and AbbVie for the treatment of autoimmune diseases.
This milestone payment was recognized as revenue over 2021, as the enrollment of the first patient took place in November 2021 (see note 4.6 “Tradereceivables and other current assets and receivables”).
Conflict inUkraine and business update
At the end of 2021 and beginning of 2022, tensions between the U.S. and Russia escalated when Russia amassed large numbers of military ground forces and support personnel on the Ukraine-Russia border and, in February 2022, Russia invaded Ukraine. In response, the European Union, the United States of America (or the “U.S.”) and certain other countries have imposed significant sanctions and export controls against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian political, business, and financial organizations, Russia issued related counter-sanctions, and the European Union, the U.S., Russia, and certain other countries could impose further sanctions, trade restrictions, and other retaliatory actions or counter-actions should the conflict continue or worsen.
In addition to the COVID-19 pandemic, the conflict in Ukraine and related sanctions against Russia have impacted recruitment for NATiV3. Although the pandemic has eased globally, the strain on health systems continues to affect clinical sites, notably through staffing shortages and higher turnover. In addition, recruitment for NATiV3 has been put on hold in Ukraine and the decision has been taken to remove all of Inventiva’s planned sites in Russia from the trial. The Company is continuing to experience delays in NATiV3. The delay the Company faces is primarily due to a higher than originally projected screen failure rate resulting in slower than anticipated enrollment rate. In addition, the Company continues to see slower than predicted site activation, screening and enrollment due to negative impacts from the COVID-19 pandemic and the Company continues to be unable to conduct clinical trial activities at sites originally located in Ukraine and Russia. Inventiva has implemented and is planning further measures designed to accelerate enrollment and reduce screen failures in the NATiV3 trial, and additional sites have been identified to help compensate for the inability to use sites in Ukraine and Russia. The publication of the topline results of the part 1 of NATiV3 is now targeted for second half of 2025, subject to the continuing implementation of measures to accelerate the enrollment rate.
Additionally, the Company has entered into a licensing and collaboration agreement with Sino Biopharm to develop and commercialize lanifibranor for the treatment of NASH and other metabolic diseases in Greater China. Depending on multiple factors, including Chinese regulatory authorities' feedback, it is expected CTTQ will either join the ongoing NATiV3 Phase III clinical trial of lanifibranor in NASH or run an independent study. CTTQ will bear all costs associated with the trials conducted in Greater China.
40
The investigator driven Phase II trial of lanifibranor in Non-Alcoholic Fatty Liver Disease (“NAFLD”) patients with type 2 diabetes (“T2D”) conducted by Professor Cusi from the University of Florida randomized its last patient in September 2022. However, due to a late enrollment of this last patient, the topline results from this trial are now expected in the first quarter 2023 versus the second half of 2022 as previously communicated. For the ongoing Phase II LEGEND trial combining lanifibranor with SGLT2 inhibitor empagliflozin, patient screening and randomization commenced in July, 2022 and top-line results from this trial are expected in the second half of 2023.
Note 2. Basis of preparationand statement of compliance
| 2.1. | Basis of preparation for theconsolidated financial statements |
|---|
The Company has prepared these unaudited interim condensed consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union and IFRS as issued by the International Accounting Standard Board (“IASB”).
These unaudited interim condensed consolidated financial statements as of June 30, 2022 were approved by the Board of Directors of the Company on September 21, 2022.
| 2.2. | Statement of compliance |
|---|
These unaudited interim condensed consolidated financial statements were prepared in compliance with International Accounting Standards (IAS) 34—InterimFinancial Reporting, which provides for the presentation of selected explanatory notes. The accompanying notes do not contain all the disclosures required for annual financial statements and should therefore be read in conjunction with the Company’s financial statements prepared in accordance with IFRS as of and for the year ended December 31, 2021.
IFRS basis adopted
The accounting policies applied by the Company in the preparation of the unaudited interim condensed consolidated financial statements for the six-month period ended June 30, 2022 are identical to those used in the annual financial statements prepared in accordance with IFRS as of and for the year ended December 31, 2021, with the exception of specific provisions for the preparation of unaudited interim condensed consolidated financial statements.
Standards, amendmentsto existing standards and interpretations published by the IASB whose application has been mandatory since January 1, 2022
The application of standards, amendments to existing standards and interpretations whose application has been mandatory since January 1, 2022 in the European Union primarily concern:
| - | Amendments<br> to IFRS 3 related to the conceptual framework; |
|---|---|
| - | Amendments<br> to IAS 37 related to onerous contracts; |
| --- | --- |
| - | Amendments<br> to IAS 16 related to proceed before intended use; |
| --- | --- |
| - | IFRIC<br> decision of March 2021 on configuration or customization costs in a cloud computing<br> arrangement (IAS 38). |
| --- | --- |
Those amendments had no material impact on the Company’s consolidated financial statements. As of June 30, 2022, the IASB have not published any amendments that would be expected to have a material impact on Company’s consolidated financial statements.
Standards, amendmentsto existing standards and interpretations published by the IASB whose application is not yet mandatory
No standards, amendments to existing standards or interpretations had been published but were not yet applicable as of June 30, 2022, that may have material impact on the Company’s financial statements.
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| 2.3. | Scope and method of consolidation |
|---|---|
| • | Accounting policy |
| --- | --- |
In accordance with IFRS 10 Consolidated Financial Statements, an entity (subsidiary) is consolidated when it is controlled by the company (the parent).
Subsidiaries are all entities over which the Company has control. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and could affect those returns through its power to direct the activities of the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date the control ceases.
All intercompany transactions, balances, and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries are consistent with the policies adopted by the parent.
| • | Consolidated entities |
|---|
As of June 30, 2022, the scope of consolidation consists of two entities, the parent, Inventiva S.A. and its subsidiary 100% owned, Inventiva Inc., for which no non-controlling interest is recognized.
| Date of<br> incorporation | Percent of<br> Ownership<br> Interest | Accounting Method | |||
|---|---|---|---|---|---|
| INVENTIVA Inc. | 01/05/2021 | 100 | % | Fully Consolidated | |
| 2.4 | Foreign currency translation | ||||
| --- | --- | ||||
| • | Functional and presentation currency | ||||
| --- | --- |
The Company’s consolidated financial statements are presented in euros, which is also the functional currency of the parent company, INVENTIVA S.A. The functional currency of INVENTIVA Inc. is the U.S. dollar. All amounts presented in these notes to the consolidated financial statements are denominated in euros unless otherwise stated.
| • | Translation of financial statements into presentation currency |
|---|
The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into euros, the presentation currency, as follows:
| • | Assets and<br> liabilities for each balance sheet presented are translated at the closing rate at the date<br> of that balance sheet, | |
|---|---|---|
| • | Income and<br> expenses for each statement of (income) loss and statement of comprehensive (income) loss<br> are translated at average exchange rates (which is an approximate value of the exchange rate<br> on the transaction date in the absence of significant fluctuations. Income and expenses are<br> translated at the transaction dates if the exchange rate fluctuate significantly), and | |
| --- | --- | |
| • | All resulting<br> exchange differences are recognized in other comprehensive income. | |
| --- | --- | |
| Exchange rate (USD per EUR) | As of June 30, 2022 | |
| --- | --- | --- |
| Average exchange rate for the period | 1.0934 | |
| Exchange rate at period end | 1.0387 |
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The table below shows the impact of the consolidated entities as of June 30, 2022 in the consolidated financial statements:
| June 30, 2022 – Thousands of euros | Inventiva<br><br>S.A | Inventiva<br><br>Inc. | Consolidation<br><br>restatement | Inventiva<br><br>consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net (income) loss | (29,890 | ) | 215 | 208 | (29,466 | ) | |||||
| Total assets | 108,642 | 5,192 | (5,440 | ) | 108,394 | ||||||
| Shareholders’ equity | 69,065 | 667 | (5 | ) | 69,727 |
Note3. Accounting principles
| 3.1. | Use of estimates and judgment |
|---|
The preparation of financial statements requires management to make judgments and estimates and apply assumptions that can affect the carrying amounts of assets, liabilities, income and expenses, as well as the information presented in the accompanying notes. Actual reported values may differ from the accounting estimates made.
The material judgments and main estimates used by management when applying the Company’s accounting policies in the preparation of these unaudited interim condensed consolidated financial statements are identical to those described in the annual financial statements prepared in accordance with IFRS for the year ended December 31, 2021.
The COVID-19 pandemic and the conflict in Ukraine have not led to any material changes in the estimates or judgements made by management in the preparation of the Company’s unaudited interim condensed consolidated financial statements.
| 3.2. | Fair value measurement |
|---|
Financial instruments are measured at fair value according to a hierarchy comprising three levels of valuation inputs:
| • | Level 1:<br> Quoted prices (unadjusted) in active markets for identical assets or liabilities that the<br> entity can access at the measurement date. |
|---|---|
| • | Level 2:<br> Inputs other than quoted market prices included within Level 1 that are observable for<br> the asset or liability, either directly or indirectly. |
| --- | --- |
| • | Level 3:<br> Unobservable inputs for the asset or liability. |
| --- | --- |
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The table below presents the financial assets and liabilities of the Company measured at fair value at June 30, 2022:
| At June 30, 2022 (in thousands of euros) | Level 1 | Level 2 | Level 3 | |||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Financial assets at fair value through profit or loss | ||||||
| Term deposits | 9,701 | - | - | |||
| Total assets | 9,701 | - | - | |||
| Total liabilities | - | - | - |
The table below presents the financial assets and liabilities of the Company measured at fair value at December 31, 2021:
| At December 31, 2021 (in thousands of euros) | Level 1 | Level 2 | Level 3 | |||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Financial assets at fair value through profit or loss | ||||||
| Term deposits | 8,829 | - | - | |||
| Total assets | 8,829 | - | - | |||
| Total liabilities | - | - | - | |||
| 3.3. | Specific disclosure requirementsfor unaudited interim financial statements | |||||
| --- | --- |
Seasonalityof operations
The Company’s operations are not subject to material seasonal fluctuations.
Income tax
Income tax is recognized in the financial statements for each interim period. The amount corresponds to a best estimate calculated by applying the expected weighted average tax rate for the entire year.
The income tax amount recorded as due for an interim period may have to be adjusted in the subsequent interim period of the same year if the estimated annual average tax rate changes.
| 3.4. | Going concern |
|---|
From inception, the Company has financed its growth through its initial agreement with Abbott which ended in 2017, revenues generated by the AbbVie Partnership, reimbursements of CIR receivables and successive capital increases. The Company does not generate revenue, other than the AbbVie Partnership, and continues to pursue its research and development of its product candidates.
At the date of these consolidated financial statements, the Company estimates that, given its current cost structure and forecasted expenses commitments (see note 6 “Other financial information”), it will be able to finance its activities until the fourth quarter of 2023, considering:
| • | available<br> cash and cash equivalents amounting to €76.4 million as of June 30, 2022. They<br> consist of cash and short-term deposit accounts that are liquid and easily convertible within<br> 3 months without penalty or risk of change in value (see note 4.7 “Cash and Cash equivalents”); and |
|---|
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| • | short-term<br> deposits for a total amount of €10.7 million as of June 30, 2022 (see note 4.6<br> “Other current assets”). |
|---|---|
| • | the<br> initial payment of $12 million under the license and collaboration agreement signed with<br> Sino Biopharm (described in section 6.4 – Events after the reporting date) which is expected by the end of 2022; and |
| --- | --- |
| • | the<br> potential recourse to the financing contract concluded with the EIB, whose condition<br> precedent of the first tranche, in regards of the receipt by the Company of an aggregate<br> amount of at least €18 million, will be met, upon receipt of the initial payment under<br> the license and collaboration agreement signed with Sino Biopharm, allowing the disbursement<br> of the first tranche of €25 million |
| --- | --- |
The Company could potentially extend its expected financing horizon through:
| • | the<br> possibility of further sales of ordinary shares under the ATM financing program, up to an<br> additional USD 58.3 million, under the current ATM program; |
|---|---|
| • | the<br> second EIB tranche of €25 million, if the Company is able to satisfy the condition precedent<br> related to this second tranche (see note 1.2 “Significant events in the first half of 2022”); |
| --- | --- |
| • | potential<br> additional financings through public or private securities offerings or otherwise; and |
| --- | --- |
| • | potential<br> business development partnerships. |
| --- | --- |
Assuming satisfaction of conditions, the Company expects to use any borrowings under the facility of the EIB for his pre-clinical and clinical pipeline, especially to help the financing of the phase II Lanifibranor trial for patient with NASH. There can be no guarantee that any of the anticipated milestones by the Company or its partners will be reached or that conditions precedent to receive funds under the Finance Contract will be met on their expected timeline, or at all.
Accordingly, the consolidated financial statements have been prepared on a going concern basis.
The Company expects to continue to rely on additional financing to meet its research and development program development objectives, through a combination of equity offerings, debt financing, collaborations, strategic alliances, licensing agreements or other transactions.
45
Note 4. Notesto the consolidated balance sheet
| 4.1 | Intangible assets | |||||
|---|---|---|---|---|---|---|
| In thousands of euros | June 30,<br><br>2022 | Dec. 31,<br><br>2021 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Intangible assets, gross | 3,727 | 3,717 | ||||
| Amortization and impairment | (3,057 | ) | (2,947 | ) | ||
| Intangible assets, net | 670 | 770 | ||||
| 4.2 | Property, plant and equipment | |||||
| --- | --- | |||||
| In thousands of euros | June 30,<br> <br>2022 | Dec. 31,<br> <br>2021 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Property, plant and equipment, gross | 13,870 | 10,321 | ||||
| Depreciation and impairment | (7,704 | ) | (7,124 | ) | ||
| Property, plant and equipment, net | 6,166 | 3,196 |
As of June 30, 2022, property, plant and equipment net value increased by €3.0 million mainly due to the recognition of the right of use related to the Fibroscans lease agreement. On September 21, 2021, the Company entered into an agreement with Echosens to lease Fibroscans in order to equip the clinical sites opened for the Phase III trial, evaluating lanifibranor in patients with NASH.
| 4.3 | Other non-current assets | |||
|---|---|---|---|---|
| In thousands of euros | June 30,<br> <br>2022 | Dec. 31,<br> 2021 | ||
| --- | --- | --- | --- | --- |
| Long-term accrued income | 31 | - | ||
| Short-term deposit accounts | 696 | 1,745 | ||
| Security deposits | 8 | 8 | ||
| Advance payments – non-current | 895 | 689 | ||
| Other non-current assets | 1,629 | 2,442 |
As of June 30, 2022, short-term deposit accounts with more than a year of maturity decreased by €1.0 million, related to the reclassification of deposits account in current assets.
As of June 30, 2022, advance payments to suppliers – non-current increased by €0.2 million and amounted to €0.9 million corresponding to the advances paid under the contract CRO with PRA (see note 6.1 “Commitments relating to financing activities”).
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| 4.4 | Deferred tax asset |
|---|
Inventiva S.A. is recorded tax losses for the first half of 2022. As recovery of these losses in future periods is considered unlikely due to the uncertainty inherent to the Company’s activity, no deferred tax assets were recognized on this basis for the six months ended June 30, 2022.
Deferred tax assets were recognized only for the entities that have provide sufficient evidence to attest that they will have a sufficient taxable benefit available to use the unused tax losses in a foreseeable future.
| 4.5 | Inventories | |||||
|---|---|---|---|---|---|---|
| In thousands of euros | June 30,<br><br> 2022 | Dec. 31,<br><br> 2021 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Laboratory inventories | 388 | 425 | ||||
| Inventories write-down | (33 | ) | (33 | ) | ||
| Inventories | 355 | 392 | ||||
| 4.6 | Trade receivables and other current assets | |||||
| --- | --- |
Trade receivables
Trade receivables break down as follows:
| In thousands of euros | June 30,<br> 2022 | Dec. 31,<br> 2021 | ||
|---|---|---|---|---|
| 3 months or less | 1 | 4,000 | ||
| Between 3 and 6 months | - | - | ||
| Between 6 and 12 months | - | - | ||
| More than 12 months | - | - | ||
| Trade receivables | 1 | 4,000 |
The average payment period is 30 days.
As of December 31, 2021, trade receivables consisted exclusively of the milestone payment of €4.0 million from AbbVie following the initiation of the Phase IIb trial on the cedirogant program. This payment was received on January 31, 2022. Information relating to this payment is described in note 1.2 “Significant events in the first half of 2022”.
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Other current assets
| In thousands of euros | June 30,<br> 2022 | Dec. 31,<br> 2021 | ||
|---|---|---|---|---|
| CIR and other research tax credits | 3,462 | 4,357 | ||
| Other | 29 | 16 | ||
| Tax receivables | 3,491 | 4,373 | ||
| Prepaid expenses | 5,529 | 7,454 | ||
| Short-term deposit accounts | 10,748 | 8,829 | ||
| Current accrued income | 62 | 92 | ||
| Liquidity agreement - Cash | 317 | 762 | ||
| Sales tax receivable | 3,011 | 2,828 | ||
| Other receivables | 10 | 294 | ||
| Other current assets | 19,677 | 20,260 | ||
| Other current assets and receivables | 23,169 | 24,632 |
As of June 30, 2022, tax receivables are mainly composed of research tax credits receivable in the amount of €3.5 million including €0.4 million for Inventiva Inc. In the first half of 2022, Inventiva S.A. CIR receivables consisted on €2.9 million regarding 2022 CIR and a €0.1 million receivable regarding a corrective claim on CIR 2021.
Prepaid expenses, which decreased about €1.9 million, are mainly composed of trial costs incurred under the CRO contracts and, to a lesser extent, computer maintenance and research equipment costs, patent annuity costs and insurance contributions for the end of 2022.
As of June 30, 2022, short-term deposit accounts increased by €1.9 million due to the deposit account change in maturity for €1.0 million and the increase from the Carbone short-term deposit account in the amount of $10 million.
| 4.7 | Cash and cash equivalents | |||
|---|---|---|---|---|
| Net cash and cash equivalents In thousands of euros | June 30,<br> 2022 | Dec. 31,<br> 2021 | ||
| --- | --- | --- | --- | --- |
| Other cash equivalents^(1)^ | 37,041 | 42,900 | ||
| Cash at bank and at hand | 39,365 | 43,653 | ||
| Cash and cash equivalents | 76,406 | 86,553 | ||
| 4.8 | Shareholders’ equity | |||
| --- | --- |
Share capital
The share capital is set at €421 thousand at June 30, 2022 divided into 42,134,169 fully authorized, subscribed and paid-up shares with a nominal value of €0.01.
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Share capital variation during the first half of 2022 is set forth in the table below:
In euros, apart from number of shares
| Date | Nature of the transactions | Share<br> capital | Premiums<br> related to<br> share capital | Number of<br> shares | Nominal<br> value | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2021 | 408,735 | 165,071,566 | 40,873,551 | 0.01 | ||||||
| June 15, 2022 | Capital increase by issuance of ordinary share – (ATM-3) | 12,606 | 9,353,504 | 1,260,618 | 0.01 | |||||
| June 15, 2022 | Transaction Costs related to the ATM-3 | (531,668 | ) | |||||||
| Balance at June 30, 2022 | 421,341 | 173,893,401 | 42,134,169 | 0.01 |
Movements related to BSA share warrants plans and AGA bonus shares award plans are described in subsection “Options and share warrants” and “Free sharesawards”.
Liquidity agreement
On January 19, 2018, the Company entered into a liquidity agreement with Kepler Cheuvreux, replacing the previous liquidity agreement with Oddo BHF, for a period of 12 months renewable by tacit agreement. Under the terms of the agreement, the investment services provider (ISP) is authorized to buy and sell Inventiva treasury shares without interference from the Company in order to ensure the liquidity of the shares on the Euronext market.
The liquidity agreement with Kepler Cheuvreux was extended for a new period of 12 months from January 1, 2022.
At June 30, 2022, treasury shares acquired by Inventiva through its ISP, as well as the gains or losses resulting from share purchase, sale, issue and cancellation transactions during the first half of 2022, were accounted for as a deduction from equity. Consequently, these transactions had no impact on the Company’s results.
Options and share warrants
Share-based payments correspond to:
| - | BSPCE<br>founder share warrants granted to Company employees in 2013 and 2015; |
|---|---|
| - | BSA<br>share warrants granted to Company directors in 2017, with a subscription price set at €0.534; |
| --- | --- |
| - | BSA<br>share warrants granted to Company service providers in 2018, with a subscription price set at €0.48; |
| --- | --- |
| - | BSA<br>share warrants granted in 2019 to David Nikodem, a member of Sapidus Consulting Group LLC, a service provider of Inventiva, with a subscription<br>price set at €0.18; |
| --- | --- |
| - | BSA<br>share warrants granted in 2019 to David Nikodem, a member of Sapidus Consulting Group LLC, and Jérémy Goldberg, a member<br>of PG Healthcare LLC, both service providers of Inventiva, with a subscription price set at €0.29; |
| --- | --- |
| - | BSPCE<br>founder share warrants granted on April 16, 2021, to Frederic Cren and Pierre Broqua, Company’s Directors; and |
| --- | --- |
| - | BSA<br>share warrants granted on April 16, 2021 to David Nikodem, a member of Sapidus Consulting Group LLC, a service provider of Inventiva,<br>with a subscription price set at €2.45. |
| --- | --- |
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BSA and BSPCE plan characteristics
At January 1, 2022, two BSPCE share warrant plans were outstanding: BSPCE 2013-1 and BSPCE 2021.
At January 1, 2022, six BSA share warrant plans were outstanding: BSA 2017, BSA 2018, BSA 2019, BSA 2019 bis, BSA 2019 ter and BSA 2021.
The BSPCE and BSA share warrant plans are described in the note 10.3 “Share warrants plans” of the 2021 annual financial statements.
No new share warrants plan has been attributed in the first half of 2022.
Movements in BSPCE share warrants and BSAshare warrants (in number of shares issuable upon exercise)
| Type | Grant<br> Date | Exercice<br> price (in<br> euros) | Outstanding<br> at Jan 1,<br> 2022 | Issued | Exercised | Forfeited/<br> Lapsed | Outstanding<br> at June 30,<br> 2022 | Number of<br> exercisable<br> shares | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| BSPCE 2013 plan | 12/25/13 | 0,59 | 8 800 | - | - | - | 8 800 | 8 800 | |||||||
| BSPCE 2021 plan | 04/16/21 | 11,74 | 600 000 | - | - | - | 600 000 | - | |||||||
| Total BSPCE share warrants | 608 800 | - | - | - | 608 800 | 8 800 | |||||||||
| BSA – 2017 plan | 05/29/17 | 6,68 | 130 000 | - | - | - | 130 000 | 130 000 | |||||||
| BSA – 2018 plan | 12/14/18 | 6,07 | 116 000 | - | - | - | 116 000 | 116 000 | |||||||
| BSA – 2019 plan | 06/28/19 | 2,20 | 10 000 | - | - | - | 10 000 | 10 000 | |||||||
| BSA – 2019 bis plan | 03/09/20 | 3,68 | 10 000 | - | - | - | 10 000 | 10 000 | |||||||
| BSA - 2019 ter plan | 03/09/20 | 3,68 | 36 000 | - | - | - | 36 000 | 24 000 | |||||||
| BSA – 2021 plan | 14/16/21 | 11,74 | 20 000 | - | - | - | 20 000 | - | |||||||
| Total BSA share warrants | 322 000 | - | - | - | 322 000 | 290 000 | |||||||||
| Total share warrants | 930 800 | - | - | - | 930 800 | 298 800 |
At June 30, 2022, a total of 600,088 BSPCE share warrants (or 608,800 shares) and 322,000 BSA share warrants were outstanding, corresponding to an aggregate of 298,800 shares that can be issued during the exercise.
Free share awards
AGA free share award plans
At January 1, 2022, two free share award plans were outstanding: AGA 2021 and AGA 2021-bis.
No bonus share award plan has been attributed in the first half of 2022.
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Movements in AGA free shares (in number ofshares issuable upon exercise)
| Type | Grant<br> date | Reference<br> price (in<br> euros) | Outstanding<br> at Jan 1,<br> 2022 | Issued | Exercised | Forfeited/<br> Lapsed | Outstanding<br> at June<br><br>30, 2022 | Number of<br> exercisable<br> shares | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| AGA Plan 2021-1 | 04/16/21 | 11,30 | 448 000 | - | - | (10 000 | ) | 438 000 | - | |||||||
| AGA Plan 2021-bis | 12/08/21 | 12,20 | 123 000 | - | - | (12 000 | ) | 111 000 | - | |||||||
| Total free shares | 571 000 | - | - | (22 000 | ) | 549 000 | - |
At June 30, 2022, a total of 549,000 AGA bonus shares were outstanding.
The free share award plan is described in the Note 10.4 “Bonus share award plans” of the annual consolidated financial statements for the year ended on December 31, 2021.
Share-based payments with respect to AGA bonus shares and BSA share warrants totaled €1.6 million at June 30, 2022, in comparison with €0.6 million at June 30, 2021. They are recognized in personnel costs (see note 5.2 “Operating expenses”).
| 4.9 | Financial debt | |||
|---|---|---|---|---|
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||
| --- | --- | --- | --- | --- |
| Bank borrowings | 15,324 | 9,984 | ||
| Other loans and similar borrowings^(1)^ | 14 | 6 | ||
| Lease liabilities | 3,193 | 130 | ||
| Total debt | 18,531 | 10,119 |
^(1)^ includeaccrued interests.
French state guaranteed loan and equity recoveryloans
In May 2020, the Company entered into three credit agreements pursuant to which it received €10.0 million in the form of State Guaranteed Loans (Prêts Garantis parl'Etat), which are provided by a syndicate of French banks and guaranteed by the French State in the context of the COVID-19 pandemic with initial maturity in May 2021. These loans have been extended until the third quarter of 2022. The amendments provide for reimbursements to be made over four years, beginning in July 2022 for the loan from Crédit Agricole and in September 2022 for the loans from Bpifrance and Société Générale.
In June 2022, the Company entered into three loan agreements with a syndicate of French banks for a total amount of €5.3 million. Implemented as part of a state-guaranteed PGE loan facility ("Prêt Garanti par l’Etat") with Bpifrance and two loans from a stimulus economic plan ("PrêtsParticipatifs Relance") granted by Crédit Agricole Champagne-Bourgogne and Société Générale, they are in large part guaranteed by the French State and have a duration of eight-year and a four-year repayment schedule.
The additional French state-guaranteed loan granted by Bpifrance is guaranteed up to 90% by the French state and has a maturity aligned with the existing PGE for which the Company has opted for a linear repayment extension until May 2026. The two equity recovery loans, obtained as part of a French government initiative to support companies, have been granted by Crédit Agricole Champagne-Bourgogne and Société Générale. They are guaranteed predominantly by the state and feature an eight-year financing period and a four-year repayment period.
51
Credit facility agreement with the EuropeanInvestment Bank
On May 16, 2022, the Company entered into a finance contract with the EIB for up to €50 million, divided into two tranches of €25 million each.
Capitalized interest for first tranche (“TrancheA”) is 8% and for the second tranche (“Tranche B”) is 7%. The maturity date of any borrowings under the facility is four years after disbursement of Tranche A and three years after disbursement of Tranche B. It is therefore expected that the reimbursement of the interests and capital of this credit facility should happen after the publication of the headline results of the part 1 of the Phase III clinical trial of lanifibranor in patients with NASH. Any funds not disbursed within 36 months following the execution of the Finance Contract shall be cancelled.
The two tranches are subject to the completion of certain condition precedents. The disbursement of the Tranche A is subject to, among other conditions:
| - | The<br>Company has to issue warrants to the EIB, in accordance with the terms and conditions of the warrants agreement entered into July 1,<br>2022 (see note 6.4 “Events after the reporting date”); and |
|---|---|
| - | the<br>receipt by the Company of an aggregate amount of at least €18 million, paid either through the issuance of new Company shares, or<br>through upfront or milestone payments (at June 30, 2022, the Company had received 9.4 million through a capital increase under the<br>At-The-Market financing program, as described in section 1.2 – Significant events in the first half of 2022 and is eligible<br>to receive an upfront payment of $12 million in connection with the signing of the license and collaboration agreement with Sino Biopharma). |
| --- | --- |
The disbursement of the Tranche B is subject to, among other conditions:
| - | the<br>full drawdown of the first tranche; |
|---|---|
| - | the<br>issue of the second tranche of warrants regarding the Warrant agreement; |
| --- | --- |
| - | the<br>receipt by the Company of an aggregate amount of at least €70 million (inclusive of the €18 million conditioning the Tranche<br>A), made of either the issuance of new Company shares, or through upfront or milestone payments coming from business development activities<br>on the various assets of the Company; |
| --- | --- |
| - | an<br>out-licensing, partnership or royalty transaction with an upfront payment of at least €10 million (could be include in the €70<br>million above), or the initiation of a Phase III clinical trial of cedirogant by AbbVie Inc; and |
| --- | --- |
| - | operational<br>criteria based on patient enrollment and number of sites activated in the Company’s Phase III clinical trial of lanifibranor in<br>patients with NASH. |
| --- | --- |
The Finance Contract may, in certain circumstances, be prepaid, in whole or in part, for a prepayment fee, either at the election of the Company or as a result of EIB’s demand following certain prepayment events, including a change of control or change in senior management of the Company.
Subject to certain terms and conditions, upon the occurrence of usual events of default (i.e. including payment default, misrepresentation, cross default), EIB may demand immediate repayment by the Company of all or part of the outstanding loan and/or cancel the undisbursed tranches.
Lease liabilities
The increase in lease liabilities to €3.1 million as of June 30, 2022, is related to the increase of €3.3 million in lease rights of use for Fibroscans equipment. The lease liabilities are recognized each time a new Fibroscans is leased, on a period of 4 years. Lease liabilities are calculated using specific discount rates, whether the Fibroscans are leased in France or in the United States.
52
The breakdown between long-term and short-term debt as at June 30, 2022 is as follows:
| June 30, 2022<br> In thousands of euros | Less than<br> 1 year | Between 1 and<br> 3 years | Between 3 and<br> 5 years | More than<br> 5 years | ||||
|---|---|---|---|---|---|---|---|---|
| Bank borrowings | 4,266 | 7,498 | 1,780 | 1,780 | ||||
| Other loans and similar borrowings | - | 14 | - | - | ||||
| Lease liabilities | 829 | 2,365 | - | - | ||||
| Total debt | 5,094 | 9,877 | 1,780 | 1,780 |
The maturity of long-term debt and of short-term borrowings and debt is determined according to repayment estimates as at June 30, 2022.
| Dec. 31, 2021<br> In thousands of euros | Less than<br> 1 year | Between 1 and<br> 3 years | Between 3 and<br> 5 years | More than<br> 5 years | ||||
|---|---|---|---|---|---|---|---|---|
| Bank borrowings | 1,244 | 7,484 | 1,256 | - | ||||
| Other loans and similar borrowings | - | 6 | - | - | ||||
| Lease liabilities | 38 | 92 | - | - | ||||
| Total long-term debt | 1,282 | 7,582 | 1,256 | - |
Movements in the period break down as follows:
| In thousands of euros | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Jan. 1, 2022 | 10,119 | ||||||||
| Subscription of PGE | 1,780 | ||||||||
| Subscription of bank borrowings | 3,560 | ||||||||
| Subscription of lease liabilities | 3,278 | ||||||||
| Repayment of lease liabilities | (223 | ) | |||||||
| Capitalized interest | 8 | ||||||||
| Exchange gains/losses | 9 | ||||||||
| June 30, 2022 | 18,531 | ||||||||
| 4.10 | Provisions | ||||||||
| --- | --- | ||||||||
| In thousands of euros | Jan. 1, 2022 | Additions | Reversals | June 30, 2022 | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Long-term provisions | - | - | - | - | |||||
| Payroll taxes 2016-2018 | 180 | - | (180 | ) | - | ||||
| Short-term provisions | 180 | - | (180 | ) | - | ||||
| Total provisions | 180 | - | (180 | ) | - |
Provisions booked at January 1, 2022 relate to the late payment penalties related to the tax audit carried out on payroll taxes 2016- 2017.
53
The reversal of provisions for the period is due to the receipt of two formal notices from the tax authorities concerning late payments penalties on the tax audit carried out on the CIR and payroll taxes.
The settlements of the CIR and payroll tax disputes is described in note 4.12 “Other current liabilities”.
| 4.11 | Provisions for retirement benefit obligations |
|---|
Retirement benefit obligations are determined based on the rights set forth in the national collective bargaining agreement for the French pharmaceutical industry (IDCC 176/Brochure 3104) and in accordance with IAS 19 – Employee Benefits. These rights depend on the employee’s final salary and seniority within the Company at his/her retirement date.
Net provision
The provision recorded in respect of defined benefit schemes at the end of each reporting period is shown in the table below:
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||
|---|---|---|---|---|
| Retirement benefit obligations | 1,184 | 1,429 | ||
| Total obligation | 1,184 | 1,429 |
Given the absence of plan assets at June 30, 2022 and December 31, 2021, the total amount of the provision corresponds to the estimated obligation at those dates.
Changes in the net provision
Changes in the provision recorded in respect of defined benefit schemes break down as follows:
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||||
|---|---|---|---|---|---|---|
| Provision at beginning of period | (1,429 | ) | (1,385 | ) | ||
| Other variations | - | 75 | ||||
| Expense for the period | (125 | ) | (200 | ) | ||
| Actuarial gains or losses recognized in other comprehensive income | 370 | 82 | ||||
| Provision at end of period | (1,184 | ) | (1,429 | ) |
Breakdown of expense recognized for the period
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||||
|---|---|---|---|---|---|---|
| Service cost for the period | (118 | ) | (224 | ) | ||
| Interest cost for the period | (7 | ) | (5 | ) | ||
| Plan curtailments and modifications | - | - | ||||
| Benefits for the period | - | 29 | ||||
| Total | (125 | ) | (200 | ) |
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| 4.12 | Trade payables and other current liabilities | |||
|---|---|---|---|---|
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||
| --- | --- | --- | --- | --- |
| Trade payables | 14,253 | 14,602 | ||
| Other current liabilities | 4,698 | 6,789 | ||
| Trade payables and other current liabilities | 18,951 | 21,391 |
In the first half of 2022, trade payables are composed of prepaid expenses for €10.7 million of which €9.4 million relate to scientific projects.
Trade payables
Trade payables break down as follows:
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||
|---|---|---|---|---|
| Due in 30 days | 13,991 | 14,445 | ||
| Due in 30-60 days | 262 | 158 | ||
| Due in more than 60 days | - | - | ||
| Trade payables | 14,253 | 14,602 |
No calculations have been made to discount trade payables to present value as payment is due within one year at the end of the reporting period.
Other current liabilities
| In thousands of euros | June 30, 2022 | Dec. 31, 2021 | ||
|---|---|---|---|---|
| Employee-related payables | 1,378 | 1,518 | ||
| Accrued payroll and other employee-related taxes | 1,098 | 1,234 | ||
| Sales tax payables | 2,094 | 879 | ||
| Other accrued taxes and employee-related expenses | 116 | 178 | ||
| Other miscellaneous payables | 12 | 2,979 | ||
| Other current liabilities | 4,698 | 6,789 |
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No calculations have been made to discount other current liabilities to present value, as payment is due within one year of the end of the reporting period.
As of December 31, 2021, other miscellaneous payables were mainly composed of :
| - | an<br>accrued expense for an amount of €1.2 million (mark-up and delays interests included) following receipt of the Notice of Recovery,<br>on October 30, 2020, relating to the payroll tax for the taxable years 2016 and 2017; and |
|---|---|
| - | an<br>accrued expense for an amount of €1.6 million (mark-up and delays interests included) following the partial acceptance of the French<br>tax authorities related to CIR for the period from 2013 to 2015. |
| --- | --- |
Following the tax dispute settlement submission received on February 15, 2022, related to the payroll tax for the taxable years 2016 and 2017 and CIR for the period from 2013 to 2015. The Company agreed on this settlement. Accrued expenses are settled during the first half of 2022 as follow:
| - | €0.4<br>million payment; |
|---|---|
| - | Imputation<br>on a €1.9 million VAT credit; and |
| --- | --- |
| - | CIR<br>2017 tax relief amounted to €0.2 million and €0.3 million receivables related to the CIR 2013 – 2015 corrective statement. |
| --- | --- |
Accrued payroll and other employee-related taxes mainly relate to payables to social security and employee-benefit organizations such as URSSAF, KLESIA and APGIS for the second quarter of the year.
Other accrued taxes and employee-related expenses concern provisions for payroll taxes, such as professional training charges, apprenticeship tax and the employer’s contribution to construction investment in France.
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| 4.13 | Financial assets and liabilities |
|---|
The table below presents the carrying amount of financial assets and liabilities by IFRS 9 accounting category:
| In thousands of euros | June 30, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| Financial assets | Financial<br> assets<br> carried at<br> amortized<br> cost | Financial<br> assets<br> carried at<br> fair value<br> through<br> profit or loss | Liabilities<br> carried at<br> amortized<br> cost | Total | ||||
| Long-term accrued income | 31 | 31 | ||||||
| Long-term deposit accounts | 696 | - | - | 696 | ||||
| Long-term security deposits | 8 | - | - | 8 | ||||
| Advance payment | 895 | - | - | 895 | ||||
| Current accrued income | 62 | - | - | 62 | ||||
| Short-term deposit accounts | 1,047 | 9,701 | - | 10,748 | ||||
| Trade receivables | 1 | - | - | 1 | ||||
| Other receivables | 327 | - | - | 327 | ||||
| Cash and cash equivalents | 76,406 | - | - | 76,406 | ||||
| Total | 79,471 | 9,701 | - | 89,172 | ||||
| Financial liabilities | ||||||||
| Long-term debt | - | - | 1,437 | 1,437 | ||||
| Short-term debt | - | - | 5,094 | 5,094 | ||||
| Trade payables | - | - | 14,253 | 14,253 | ||||
| Other miscellaneous payables | - | - | 12 | 12 | ||||
| Total | - | - | 32,796 | 32,796 |
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| In thousands of euros | Dec. 31, 2021 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Financial assets | Carrying<br> amount in the<br> balance sheet | Financial<br> assets<br> carried at<br> amortized<br> cost | Financial<br> assets<br> carried at<br> fair value<br> through<br> profit or loss | Liabilities<br> carried at<br> amortized<br> cost | Fair value | |||||
| Long-term deposit accounts | 1,745 | 1,745 | - | - | 1,745 | |||||
| Long-term security deposits | 8 | 8 | - | - | 8 | |||||
| Advance payment | 689 | 689 | - | 689 | ||||||
| Current accrued income | 92 | 92 | - | - | 92 | |||||
| Short-term deposit accounts | 8,829 | - | 8,829 | - | 8,829 | |||||
| Trade receivables | 4,000 | 4,000 | - | - | 4,000 | |||||
| Foreign currency forwards | 762 | 762 | - | - | 762 | |||||
| Other receivables | 294 | 294 | - | - | 294 | |||||
| Cash and cash equivalents | 86,553 | - | - | - | 86,553 | |||||
| Total | 102,972 | 94,143 | 8,829 | - | 102,972 | |||||
| Financial liabilities | ||||||||||
| Long-term debt | 8,837 | - | 8,837 | 8,837 | ||||||
| Short-term debt | 1,282 | - | 1,282 | 1,282 | ||||||
| Trade payables | 14,602 | - | 14,602 | 14,602 | ||||||
| Other miscellaneous payables | 2,979 | - | 2,979 | 2,979 | ||||||
| Total | 27,701 | - | 27,701 | 27,701 |
Note 5. Notes to the income statement
| 5.1 | Revenues and other income | |||
|---|---|---|---|---|
| In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||
| --- | --- | --- | --- | --- |
| Revenue | 67 | 139 | ||
| Total revenue | 67 | 139 | ||
| Tax credits | 3,210 | 1,849 | ||
| Subsidies | 6 | 3 | ||
| Other | 109 | 156 | ||
| Other operating income | 3,325 | 2,009 | ||
| Total revenue and other income | 3,392 | 2,147 |
58
| 5.2 | Operating expenses | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| First-half 2022<br> In thousands of euros | Research and<br> development<br> costs | Marketing –<br> Business<br> development<br> expenses | General and<br> administrative<br> expenses | Total | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Disposables | (920 | ) | - | - | (920 | ) | ||||||
| Energy and liquids | (368 | ) | - | (92 | ) | (460 | ) | |||||
| Patents | (227 | ) | - | - | (227 | ) | ||||||
| Studies | (20,530 | ) | - | - | (20,530 | ) | ||||||
| Maintenance | (466 | ) | - | (55 | ) | (521 | ) | |||||
| Fees | (103 | ) | (1 | ) | (2,026 | ) | (2,129 | ) | ||||
| IT systems | (428 | ) | (7 | ) | (42 | ) | (477 | ) | ||||
| Support costs (including taxes) | - | - | (355 | ) | (355 | ) | ||||||
| Personnel costs | (5,891 | ) | (111 | ) | (2,198 | ) | (8,201 | ) | ||||
| Depreciation, amortization and provisions | (594 | ) | - | (105 | ) | (699 | ) | |||||
| Other operating expenses | (340 | ) | (159 | ) | (1,973 | ) | (2,471 | ) | ||||
| Total operating expenses | (29,866 | ) | (278 | ) | (6,847 | ) | (36,991 | ) | ||||
| First-half 2021<br> In thousands of euros | Research and<br> development<br> costs | Marketing –<br> Business<br> development<br> expenses | General and<br> administrative<br> expenses | Total | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Disposables | (714 | ) | - | - | (714 | ) | ||||||
| Energy and liquids | (304 | ) | - | - | (304 | ) | ||||||
| Patents | (296 | ) | - | - | (296 | ) | ||||||
| Studies | (11,742 | ) | - | - | (11,742 | ) | ||||||
| Maintenance | (459 | ) | - | - | (459 | ) | ||||||
| Fees | (93 | ) | (150 | ) | (1,652 | ) | (1,895 | ) | ||||
| IT systems | (362 | ) | (5 | ) | (26 | ) | (393 | ) | ||||
| Support costs (including taxes) | - | - | (452 | ) | (452 | ) | ||||||
| Personnel costs | (4,389 | ) | (100 | ) | (1,736 | ) | (6,225 | ) | ||||
| Depreciation, amortization and provisions | (375 | ) | - | (79 | ) | (455 | ) | |||||
| Other operating expenses | (374 | ) | (4 | ) | (1,834 | ) | (2,212 | ) | ||||
| Total operating expenses | (19,109 | ) | (258 | ) | (5,779 | ) | (25,146 | ) |
The increase in the research and development, from €19.1 million to €29.9 million for the first half of 2022 is primarily the result of increase in studies (research, pre-clinical trial and clinical trial) expenses from €11.7 million to €20.5 million, mainly related to lanifibranor, and to a lesser extent, a €1.5 million increase in connection with personnel costs including shared-based compensation expense about Long Term Incentive Plan (“LTIP”) and a higher recruitment level.
59
The increase in the general and administrative expenses, from €5.8 million to €6.8 million for the first half of 2022 is primarily the result of increase in fees for €0.4 million, related to additional insurance, legal, audit and consulting fees in connection with dual listing on the Nasdaq Global Market, and to a €0.5 million increase of personnel costs due to the LTIP attributed the April 16, 2021.
Personnel costs and headcount
| First-half 2022<br> In thousands of euros | Research and<br> development<br> costs | Marketing –<br> Business<br> development<br> expenses | General and<br> administrative<br> expenses | Total | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Wages, salaries and similar costs | (3,671 | ) | (94 | ) | (1,147 | ) | (4,913 | ) | ||||
| Payroll taxes | (1,107 | ) | (8 | ) | (412 | ) | (1,527 | ) | ||||
| Provisions for retirement benefit obligations | (78 | ) | - | (40 | ) | (118 | ) | |||||
| Share-based payments | (1,034 | ) | (9 | ) | (600 | ) | (1,643 | ) | ||||
| Total personnel costs | (5,891 | ) | (111 | ) | (2,198 | ) | (8,201 | ) |
The Company has 109 employees at June 30, 2022, of which 102 are employed by Inventiva S.A. and 7 are employed by Inventiva Inc.
| First-half 2021<br> In thousands of euros | Research and<br> development<br> costs | Marketing –<br> Business<br> development<br> expenses | General and<br> administrative<br> expenses | Total | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Wages, salaries and similar costs | (2,854 | ) | (96 | ) | (1,066 | ) | (4,016 | ) | ||||
| Payroll taxes | (1,081 | ) | - | (397 | ) | (1,478 | ) | |||||
| Provisions for retirement benefit obligations | (72 | ) | - | (36 | ) | (108 | ) | |||||
| Share-based payments | (382 | ) | (4 | ) | (237 | ) | (623 | ) | ||||
| Total personnel costs | (4,389 | ) | (100 | ) | (1,736 | ) | (6,225 | ) |
The Company had 100 employees at June 30, 2021 (only Inventiva S.A.).
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| 5.3 | Other operating income and expenses |
|---|
Other operating income and expenses break down as follows:
| In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||||
|---|---|---|---|---|---|---|
| Income - Disposals of assets | - | 8 | ||||
| Reversal of provision – Tax disputes | 180 | - | ||||
| Reversal of provision – AMR penalties | 114 | - | ||||
| Reversal of carryback | - | 333 | ||||
| Total other operating income | 294 | 341 | ||||
| Disposals of assets | (9 | ) | - | |||
| Provision for tax risk – payroll taxes | - | (34 | ) | |||
| Accrued expenses – CIR 2013-2015 | (0 | ) | - | |||
| Late payment interest on CIR 2013-2015 | (121 | ) | - | |||
| Transaction costs ^(1)^ | (32 | ) | (914 | ) | ||
| Total other operating expenses | (163 | ) | (948 | ) | ||
| Other operating income (expenses) | 131 | (607 | ) | |||
| ^(1)^ | During<br>the first half of 2021, transaction costs are mainly constituted of insurance charges related to the Initial Public Offering of SecuritiesInsurance in connection with the Company's IPO on the Nasdaq Global Market in July 2020. | |||||
| --- | --- | |||||
| 5.4 | Financial income and expenses | |||||
| --- | --- | |||||
| In thousands of euros | First-half<br> 2022 | First-half<br> 2021 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Income from cash equivalents | 140 | 11 | ||||
| Foreign exchange gains | 4,019 | 2,967 | ||||
| Total financial income | 4,159 | 2,978 | ||||
| Interest cost | (120 | ) | (48 | ) | ||
| Foreign exchange losses | (49 | ) | (1,453 | ) | ||
| Losses on fair value variation | - | (651 | ) | |||
| Other financial expenses | (7 | ) | (2 | ) | ||
| Total financial expenses | (177 | ) | (2,154 | ) | ||
| Net financial income | 3,983 | 824 |
In the first half of 2022, financial income is mainly related to foreign exchange gains generated by bank accounts in U.S. dollar and is primarily attributable to the appreciation of the U.S. dollar against the euro over the period.
61
Financial charges mainly include foreign exchange losses due to the unwinding of short-term deposits accounts and the losses on fair value variation following the unwinding of the three foreign currency forward contracts.
| 5.5 | Income tax |
|---|
The income tax calculation for interim periods is set out in note 3.3 “Specific disclosure requirements for unaudited interim financial statements.”
As the imputation of tax benefits on tax losses of Inventiva S.A., at short or mid-term, were considered unlikely due to the growth phase of the company and regarding the nil projected tax rate as of December 31, 2022, no current taxes were recorded as of June 30, 2022, for Inventiva S.A.
| 5.6 | Basic and diluted loss per share |
|---|
Basic earnings (loss) per share are calculated by dividing net income (loss) attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the period.
| In euros | First-half<br><br> 2022 | First-half<br><br> 2021 | ||||
|---|---|---|---|---|---|---|
| Net loss for the period | (29,466 | ) | (23,136 | ) | ||
| Weighted<br> average number of shares outstanding used to calculate basic/diluted loss per share^(1)^ | 40,864,457 | 38,677,187 | ||||
| Basic/diluted loss per share | (0.72 | ) | (0.60 | ) | ||
| ^(1)^ | In<br>accordance with IAS 33.19, basic/diluted earnings per share exclude treasury shares held by the Group as of June 30, 2022. | |||||
| --- | --- |
As a loss was recorded in the first half of 2022 and 2021, diluted earnings (loss) per share are the same as basic earnings (loss) per share. Share-based payment plans (BSAs, BSPCEs and AGAs) are not included as their effects would be anti-dilutive.
Note 6. Other financial information
| 6.1 | Commitments related to operational activities |
|---|
Commitments given – Contracts CROand CMO with third parties
| - | ContractCMO with Fisher Clinical Services |
|---|
In March 2021, the Company entered into an agreement with Fisher Clinical Services to perform product packaging and distribution services for large-scale clinical studies, including Phase III studies in 25 countries around the world (including 300 clinical centers).
The Company undertakes to pay for the services rendered by the CMO over the 7 years following the date of the agreement for a total amount of €15.0 million.
As of June 30, 2022, the amount remaining to be paid is $13.7 million.
62
| - | ContractCRO with Pharmaceutical Research Associates B.V. |
|---|
In April 2021, as part of the conduct of the Phase III clinical trial in NASH, the Company entered into an agreement, with retroactive effect in January 2021, with Pharmaceutical Research Associates Groupe B.V (“PRA”), acting as a CRO. The contract aims to support the regulatory approval of the product in adult patients in Europe and in the United States. Following the amendments of February 1, 2022 and April 12, 2022, mainly concerning the NATiV3 trial, the amount of the commitment to PRA amounts to 221.7 million euros, with a bonus or malus capped at 3.4 million euros.
The Company has signed a CRO with PRA for the conduct of the LEGEND Phase IIa clinical trial, effective January 14, 2022. Under the terms of the contract, PRA will conduct a clinical trial to evaluate the benefit for patients of the combination of lanifibranor with empagliflozin, an SGLT2 inhibitor, in patients with T2D and non-cirrhotic NASH.
The Company undertakes to pay the services rendered (directly and indirectly) by the CRO over the next 7 years for a total budget of €229.6 million. As of June 30, 2022, the amount remaining to be paid under the contract is €207.0 million.
| - | ContractCRO signed with United BioSource LLC |
|---|
In September 2021, as part of the conduct of the Phase III clinical trial for the treatment of NATiV3, the Company has entered into an agreement, with retroactive effect in April 2021, with United BioSource LLC (UBC), acting as a CRO. The contract aims to outsource the management of pharmacovigilance operations for the NATiV3 clinical trial. The Company undertakes to pay the services rendered by the CRO over the period from the effective date to December 2028, for a total amount of €2.9 million.
As of June 30, 2022, the amount remaining to be paid is €2.7 million.
| - | ContractCRO signed with Synexus Clinical Research GmbH (“AES”) |
|---|
In October 2021, as part of the conduct of the Phase III Nash trial, the Company entered into an agreement with AES, acting as a CRO. The purpose of the contract is to outsource the management a part of pharmacovigilance operations for the NATiV3 clinical trial. The Company is to pay the services rendered by the CRO over the period from the effective date of the contract to December 2028, for a total amount of €7.1 million.
As of June 30, 2022, the amount remaining to be paid is €6.2 million.
| - | ContractCRO signed with Syneos Health Clinical Research Services, LLC |
|---|
In March 2021, as part of the conduct of the Phase III NATiV3 trial, the Company entered into an agreement with Syneos Health Clinical Research Services LLC, acting as a CRO. The purpose of the contract is to assess certain pharmacokinetic parameters of lanifibranor. The Company is committed to pay the services rendered by the CRO over the period from the effective date of the contract until the end of the trial, which is expected to be in the beginning of the second half of 2023, for a total amount of $7.4 million.
As of June 30, 2022, the total amount remaining to be paid under the contract is $4.6 million.
| - | Contractsigned with Corden Pharma Chenôve SAS (“Corden Pharma”) |
|---|
On January 1^st^, 2020, as part of the conduct of the Phase III NATiV3 trial, the Company entered into an agreement with Corden Pharma; a CMO. The purpose of the contract is to produce the active ingredients for clinical batches of lanifibranor for the NATiV3 trial. The Company is committed to pay the services rendered by the CRO over the period from the effective date of the contract to December 31, 2026, for a total amount of €5.6 million.
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As of June 30, 2022, the amount remaining to be paid is €0.1 million.
| - | ContractCRO signed with Delpharm Reims |
|---|
On December 16, 2020, as part of the conduct of the Phase III NATiV3 trial, the Company entered into an agreement with Delpharm Reims. The purpose of the contract is to formulate the active ingredient of the lanifibranor clinical trial batches for the NATiV3 trial. The Company is committed to pay the services rendered by the CRO over the period from the effective date of the contract to December 15, 2027, for a total amount of €3.7 million.
As of June 30, 2022, the amount remaining to be paid is €2.7 million.
| - | ContractCRO signed with Clinical Research Services Kiel GmbH |
|---|
Effective on March 23, 2022, as part of the conduct of a Phase I trial, the Company entered into an agreement with Clinical Research Services Kiel GmbH. The purpose of the contract is to assess the effect of renal impairment on the pharmacokinetics of lanifibranor, its active metabolites as well as the tolerability of lanifibranor. The Company is committed to pay the services rendered by the CRO over the period from the effective date of the contract to the last quarter of 2023, for a total amount of €2.3 million.
As of June 30, 2022, the amount remaining to be paid is €2.2 million.
Commitments given – Service Agreement
| - | Serviceagreement with Summit Clinical Services LLC (“Summit”) |
|---|
On February 1, 2022, the Company entered into an agreement with Summit to select sites for the trial and the contracts negotiation for the Phase III NATiV3 trial. The company is to pay a total amount of $4.4 million.
As of June 30, 2022, the total amount remaining to be paid under this contract is $4.1 million
Commitments received— Agreementsconcerning the provision of facilities
| - | Agreementwith Novolyze |
|---|
On October 13, 2015, the Company signed a contract to make its premises and facilities available to Novolyze for a 36-month period beginning October 19, 2015. Pursuant to a tacit renewal on October 19, 2021, the monthly rent was stated at €6,2 thousand as from November 1, 2021, with an annual rate of increase of 2%. This contract was the subject of an amendment No. 3 raising the monthly rent to €8,0 thousands as of April 1, 2022, with an annual increase of 2% on each October 19.
As of June 30, 2022, the total commitment received amounted to €54,9 thousand and commitments relating to future payments amounted to €230,7 thousand.
| - | Agreementwith Synthecob |
|---|
On March 21, 2016, the Company signed a contract to make its research equipment and services available to the company Synthecob for a two-year period beginning April 1, 2016. Pursuant to an amendment signed on January 1, 2017, the monthly rent was increased to €2.4 thousand until March 30, 2018, and then to €2.5 thousand. This contract was renewed on April 1, 2022, increasing the monthly rent from €2.7 thousand to €2.9 thousand, with an annual increase rate of 1%.
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Therefore, as of June 30, 2022, the total commitment received amounted to €41,5 thousand and commitments relating to future payments amounted to €69,1 thousand.
| 6.2. | Related-party transactions |
|---|
No new material transactions were concluded with related parties of the Company during the first half of 2022.
| 6.3 | Financial risk management |
|---|
Through its business activities, the Company is exposed to various types of financial risk: foreign exchange risk, credit risk and liquidity risk.
The credit risk factor is the same as those described in the financial statements prepared in accordance with IFRS for the year ended December 31, 2021. However, the liquidity risk factor evolved during the six months ended June 30, 2022, as described in the note 3.4 “Going Concern”.
| 6.4 | Events after the reporting date |
|---|
Inventiva entered into a warrant agreementwith the European Investment Bank
On July 4, 2022, in accordance with the terms of the credit facility with EIB, the Company agreed to issue warrants to EIB as a condition to the potential funding of each tranche (see note 1.2 “Significant events in the first half of 2022”).
The number of warrants to be issued to EIB will be determined based on (i) the aggregate amount raised by the Company through one or more equity offerings, or through upfront or milestone payments, from the date of the Finance Contract to the time of the disbursement of the relevant tranche, and (ii)(a) the average price per share paid for the Company’s shares in its most recent qualifying equity offering or (b) for the first tranche only, in case of no qualifying equity offering, the volume weighted average price per share of the Company shares over the last 180 calendar days.
The subscription price shall be €0.01 per warrant.
The warrants would have a maturity of twelve years and shall be exercisable following the earliest to occur of (i) a change of control event, (ii) the maturity date of the first tranche, (iii) an event of default under the Finance Contract, or (iv) a repayment demand by the EIB under the Finance Contract. The warrants shall automatically be deemed null and void if they are not exercised within the twelve-year period. Each warrant will entitle EIB to one ordinary share of the Company in exchange for the exercise price (subject to anti-dilutive provisions). EIB shall be entitled to a put option at its intrinsic value to require the Company to buy back the exercisable warrants not yet exercised in certain of these occurrences.
Each warrant will entitle EIB to one ordinary share of the Company.
The exercise price will be equal to 95% of the volume weighted average of the trading price of the Company shares on the regulated market of Euronext Paris for the last trading session preceding the decision of the Company to issue such warrant.
Furthermore, the Company shall be entitled to a call option to require EIB to sell to the Company all the warrants, and a right of first refusal to buy back any warrants that are offered for sale to a third party, subject to exceptions.
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Foreign currency accounts
During July 2022, the company sold $15 million on a term deposit and sold $10 million on a current account to take advantage of the favorable exchange rate of the euro against the dollar.
Licensing and collaboration agreement withSino Biopharm
In September 2022, the Company signed a licensing and collaboration agreement with Sino Biopharm to develop, import, manufacture, commercialize and market lanifibranor, subject to regulatory approval, for the treatment of NASH and potentially other metabolic diseases, in China, Hong Kong, Macau and Taiwan (Greater China). Under the terms of the agreement, Sino Biopharm will pay Inventiva an upfront payment of $12 million and an additional $5 million upon achievement of the certain clinical milestones. Inventiva has the potential to receive up to $290 million of clinical, regulatory and commercial milestone payments under the agreement. In addition, subject to regulatory approval of lanifibranor, Inventiva has the right to receive tiered royalties ranging from high single-digit to mid-teen double digits of net sales by Sino Biopharm in Greater China during the first three years of commercialization and from low to mid-teen double digits starting from year four. Depending on the multiple factors, including Chinese regulatory authorities feedback, it is expected CTTQ will either join the ongoing NATiV3 Phase III clinical trial of lanifibranor in NASH or run an independent study. CTTQ will bear all costs associated with the trials conducted in Greater China.
The delay in patient recruitment for the NATiV3 Phase III clinical trial is factored into the performance conditions for the vesting of equity instruments (AGA, BSA, BSCPE) under the long-term incentive plans ("LTI plan") granted in April and December 2021. As at 30 June 2022 the relevant plans were valued assuming an assumption of 100% in meeting this performance condition. An assumption of 0% in meeting with this condition as at 30 June 2022 would have resulted in a decrease in the expense relating to the LTI plan, and therefore an increase in the net result for the period, of approximately €0.8 million. Management will review the assumption that the performance condition relating to patient recruitment for the NATiV3 Phase III clinical trial will be met after 30 June 2022.
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| 4. | Other information |
|---|---|
| 4.1. | Table of delegations |
| --- | --- |
On May 19, 2022, the shareholders met in a Combined General Shareholders’ Meeting to determine the financial authorizations to be granted to the Board of Directors. The current delegations and their use are presented in the table below:
| Financial authorizations approvedby the Combined General Shareholders’ Meeting of May 19, 2022 | Resolution | Period of validity from May 19, 2022 | Maximum<br> nominal<br> amount | Use of the delegation |
|---|---|---|---|---|
| Delegation<br> of authority to the Board of Directors to increase the share capital by issuance of ordinary shares or securities giving access to<br> ordinary shares, to be issued immediately or in the future by the Company, with shareholders’ preemptive subscription rights | Twenty-first<br> resolution | 26<br> months | Capital increase: 260,000<br> <br> Securities giving access to capital to be issued: 150,000,000 | None |
| Delegation<br> of authority to the Board of Directors to increase the share capital of the Company by issuance of ordinary shares or securities<br> giving access to the share capital of the Company, immediately or in the future, without shareholders’ preemptive subscription<br> rights, by way of public offerings, excluding offers referred to in Article L.411-2- 1° of the French Code monétaire et financier | Twenty-second<br> resolution | 26<br> months | Capital increase: 230,000<br> <br> Securities giving access to capital to be issued: 150,000,000 | None |
| Delegation<br> of authority to the Board of Directors to increase the share capital by issuance of ordinary shares or securities giving access to<br> ordinary shares, to be issued immediately or in the future by the Company, without shareholders’ preemptive subscription rights,<br> by way of public offerings referred to in Article L.411-2 1° of the French Code monétaire et financier | Twenty-third<br> resolution | 26<br> months | Capital<br> increase: 230,000 and up to the limit of 20% of the share capital per year Securities giving access to the capital to be issued:<br> 150,000,000 | None |
| Authorization<br> to the Board of Directors to set the issuance price on the capital increases by way of public offerings, without shareholders’<br> preemptive rights, pursuant to the terms set by the General Shareholders' Meeting, and up to the limit of 10% of the share capital | Twenty-fourth<br> resolution | 26<br> months | 10%<br> of the share capital per 12-month period from the date of implementation of the delegation | None |
All values are in Euros.
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| Financial authorizations approvedby the Combined General Shareholders’ Meeting of May 19, 2022 | Resolution | Period of validity from May 19, 2022 | Maximum<br> nominal<br> amount | Methods of determining the issue price | Use of the delegation |
|---|---|---|---|---|---|
| Delegation<br> of authority to the Board of Directors to increase the share capital of the company by issuance of ordinary shares or securities<br> giving access to ordinary shares of the Company, immediately or in the future, reserved for certain specific categories of beneficiaries,<br> without shareholders’ preemptive subscription rights^3^ | Twenty-fifth<br> resolution | 18<br> months | Capital<br> increase: 230,000 Securities giving access to the capital to be issued: 150,000,000 | Refer<br> to (3) below | CEO’s<br> decision of 06/15/2022 on delegation of Board of Directors of 06/02/2021: issuance of 1,260,618 new shares |
| Delegation<br> of authority to the Board of Directors to decide to issue ordinary shares to be issued immediately or in the future by the Company,<br> without shareholders' preemptive subscription right in favor of a category of persons meeting certain specified characteristics in<br> the context of an equity financing agreement on the American market known as "At-the-market" or "ATM" ^4^ | Twenty-sixth<br> resolution | 18<br> months | Capital<br> increase: 150,000 it being specified that this cap is common to the 230,000 ceiling of the 22nd resolution. | Refer<br> to (3) below | None |
| Authorization<br> to the Board of Directors to increase the number of securities to be issued as part of share capital increases with or without shareholders’<br> preemptive subscription rights | Twenty-seventh<br> resolution | 26<br> months or 18 months (if used in the context of resolution 25 or resolution 26) | 15%<br> of the initial issuance | Same<br> price as the initial issuance | None |
All values are in Euros.
^3^ The categories of beneficiaries must have one of the following characteristics: (i) natural or legal persons (including companies), trusts or investment funds, or other investment vehicles, in any form, established under French or foreign law, which regularly invest in the pharmaceutical, biotechnological or medical technology sectors; and/or (ii) companies, institutions or entities, in any form, French or foreign, exercising a significant part of its activities in the pharmaceutical, cosmetic or chemical sectors, or medical devices and/or technologies, or researching in such sectors; and/or (iii) French or foreign investment services companies, or any foreign establishment having an equivalent status, able to guarantee the completion of an issue intended to be placed with the persons referred to in (i) and/or (ii) above, and, in this context, to subscribe to the securities that are being issued
^4^ The resolution applies to the following category of beneficiaries: "any credit institution or any investment services provider, French or foreign, or any foreign institution with an equivalent status, intervening within the framework of an ATM program set up by the Company (or any equity financing program of the same nature that would be substituted for it) and providing, within this framework, for the subscription of securities issued by the Company.
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| Financial authorizations approvedby the Combined General Shareholders’ Meeting of May 19, 2022 | Resolution | Period of validity from May 19, 2022 | Maximum<br> nominal<br> amount | Methods of determining the issue price | Use of the delegation |
|---|---|---|---|---|---|
| Delegation<br> of authority to the Board of Directors to increase the share capital of the company by issuance of ordinary shares or securities<br> giving access to ordinary shares of the Company, immediately or in the future, as part of a public exchange offer initiated by the<br> Company | Twenty-eighth<br> resolution | 26<br> months | Capital increase: 230,000, it being specified that this cap<br> is common to the 230,000 ceiling of the 22nd resolution<br> <br> Securities giving access to the capital to be issued: 150,000,000 | None | |
| Delegation<br> of authority to the Board of Directors to increase the share capital of the company by issuance of ordinary shares or securities<br> giving access to ordinary shares of the Company, immediately or in the future, in consideration for contributions in kind up to a<br> maximum of 10% of the share capital, excluding the case of a public exchange offer initiated by the Company | Twenty-ninth<br> resolution | 26<br> months | Capital increase: 10% of the share capital as the date of the<br> transaction, it being specified that this cap is common to the 230,000 ceiling of the 22nd resolution.<br> <br> Securities giving access to the capital to be issued: 150,000,000 | None | |
| Authorization<br> to the Board of Directors to increase the share capital of the Company by incorporating reserves, profits or premiums | Thirty-first<br> resolution | 26<br> months | Capital<br> increase: 20,000 | None | |
| Authorization<br> for the Board of Directors to grant free shares to employees and/or certain corporate officers | Thirty-second<br> resolution | 26<br> months | Capital<br> increase: 5% of the share capital on the date of the Board of Directors' decision to grant them | N/A | None |
| Authorization<br> to the Board of Directors to grant company's' share subscription and/or purchase options to corporate officers and employees of the<br> Company or of companies in the group, entailing the waiver by the shareholders of their preemptive subscription rights to the shares<br> issued as a result of the exercise of subscription options | Thirty-third<br> resolution | 38<br> months | Capital<br> increase: 5% of the share capital on the date of the Board of Directors' decision to grant them | Refer<br> to (4) below | None |
All values are in Euros.
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| Financial authorizations approvedby the Combined General Shareholders’ Meeting of May 19, 2022 | Resolution | Period of validity from May 19, 2022 | Maximum<br> nominal<br> amount | Methods of determining the issue price | Use of the delegation |
|---|---|---|---|---|---|
| Delegation<br> of authority to the Board of Directors to decide on the issue of ordinary share subscription warrants, without shareholders' preemptive<br> subscription rights, to the benefit of categories of persons^5^ | Thirty-fourth<br> resolution | 18<br> months | 600,000<br> ordinary share subscription warrants Capital increase: 6,000 | Refer<br> to (5) below |
All values are in Euros.
| ^(1)^ | The<br>issuance price will be determined as follows: (i) the issuance price of the shares to be issued under this resolution shall be at<br>least equal to the minimum authorized by the legislation in force (to date, the weighted average of the prices of the last three trading<br>days on the regulated market of Euronext Paris preceding the start of the public offer, which may be reduced by maximum discount of 10%)<br>and (ii) the issue price of the securities to be issued under this resolution other than shares shall be such that the amount received<br>immediately by the Company plus, if applicable, the amount that may be received subsequently by the Company is, for each share issued<br>as a result of the issue of these securities, at least equal to the amount mentioned in paragraph (i) above. |
|---|---|
| ^(2)^ | The<br>Combined General Shareholders’ Meeting of 16 April 2021 has delegated to the Board of Directors its authority to freely determine<br>the issuance price of the securities, in accordance with the following conditions: (a) the issuance price will at least be equal:<br>(i) either to the volume-weighted average price of the share of the Company on the regulated market of Euronext Paris for the last<br>trading day preceding the pricing; (ii) or the volume-weighted average price of the share of the Company on the regulated market<br>of Euronext Paris over three consecutive trading days, chosen from the 30 trading days preceding the pricing date; both of which may<br>be reduced by maximum discount of 15% and the Board of Directors may freely use any of the two formulas set forth above; and (b) the<br>issue price of securities other than shares shall be such that the amount received immediately by the Company plus, where applicable,<br>the amount that may subsequently be received by the Company is, for each share issued as a result of the issue of such securities, at<br>least equal to the amount referred to in (a) above. |
| --- | --- |
| ^(3)^ | the<br>issuance price will at least be equal: (i) either to the volume-weighted average price of the share of the Company on the regulated<br>market of Euronext Paris for the last trading day preceding the pricing; (ii) or the volume-weighted average price of the share<br>of the Company on the regulated market of Euronext Paris over three consecutive trading days, chosen from the 30 trading days preceding<br>the pricing date; both of which may be reduced by maximum discount of 15% and the Board of Directors may freely use any of the two formulas<br>set forth above, and (b) the issue price of the securities to be issued under this resolution other than shares shall be such that<br>the amount received immediately by the Company plus, if applicable, the amount that may be received subsequently by the Company is, for<br>each share issued as a result of the issue of such securities, at least equal to the amount referred to in (i) above. |
| --- | --- |
| ^(4)^ | The<br>exercise price of the options granted under this resolution shall be set by the Board of Directors as follows (i) the exercise price<br>of the share subscription option shall not be less than 80% of the average purchase price of the Company's shares on Euronext Paris regulated<br>market during the twenty (20) trading sessions preceding the day on which the options are granted, and (ii) the exercise price of<br>the share purchase options shall not be less than 80% of the average purchase price of the shares held by the Company pursuant to Article L.22-10-61<br>of the French Code de commerce or, as the case may be, of the share buyback program authorized by the 14^th^ resolution<br>submitted to this Meeting (i.e. that of 16 April 2021) pursuant to Article L.22-10-62 of the French Code de commerce<br>or any share buyback program applicable previously or subsequently. |
| --- | --- |
| ^(5)^ | The<br>issuance price of a BSA 2021 shall be determined by the Board of Directors on the date of issue of said BSA 2021 according to the characteristics<br>of the latter and shall in any event be at least equal to 8% of the market value of an ordinary share of the Company on the date of allocation<br>of the BSA 2021, this market value corresponds to the volume-weighted average price of the last twenty (20) trading days preceding the<br>date of grant of the BSA 2021 by the Board of Directors as long as the Company's shares are admitted to trading on the regulated market<br>of Euronext Paris. |
| --- | --- |
^5^ Targeted categories: (i) executive employees or executive officers or members of the Company's management team who are not corporate officers, or (ii) members of the Board of Directors (including members of any research committee or those serving as censor) in office on the date of grant of the warrants, who are not executive officers of the Company or one of its subsidiaries, or consultants, managers or partners of companies providing services to the Company that have entered into a consulting or service agreement with the Company in force at the time of use of this delegation by the Board of Directors, or (iii) employees of the Company.
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Exhibit 99.3
| PRESSRELEASE |
|---|
Inventiva reportsits 2022 first-half financial results and provides a corporate update
| ► | Cash position^1^at €87.2 million as of June 30, 2022, compared to €95.4 million as of<br> December 31, 2021 |
|---|---|
| ► | Receipt<br> of a €4 million milestone payment from Inventiva’s partner AbbVie for cedirogant<br> Phase IIb clinical trial initiation accounted for in 2021 revenues and H1 2022 cash flow |
| --- | --- |
| ► | Inventiva<br>entered into a credit facility for up to €50 million, subject to conditions, and a related warrant agreement with the European Investment<br>Bank (EIB)^2^ |
| --- | --- |
| ► | Inventiva<br> raised approximately €14.7 million through a combination of Inventiva’s At-The-Market<br> (ATM) program (for €9.4 million in gross proceeds) and new state-backed bank financing<br> (for €5.3 million) |
| --- | --- |
| ► | Screening<br> of the first patients in Phase IIa combination trial LEGEND with lanifibranor and empagliflozin<br> in patients with NASH and T2D |
| --- | --- |
| ► | Inventiva<br> entered into a licensing and collaboration agreement with Sino Biopharm to develop and commercialize<br> lanifibranor in Greater China |
| --- | --- |
| ► | Under the<br> agreement with Sino Biopharm, Inventiva is expected to receive $12 million upfront,<br> which is expected to complete the funding conditions to draw on the first €25 million<br> tranche of the EIB facility^2^ |
| --- | --- |
| ► | Cash runway<br> extended through Q4 2023, including the expected $12 million upfront payment from Sino Biopharm<br> and the €25 million from the EIB credit facility |
| --- | --- |
| ► | Feedback<br> from FDA that a single Phase 2/3 clinical trial with odiparcil in children with MPS VI could<br> potentially support a marketing application |
| --- | --- |
| ► | Last patient<br> first visit for the ongoing NATiV3 Phase III clinical trial evaluating lanifibranor in patients<br> with NASH is now targeted for H2 2023 |
| --- | --- |
^1^The cash position is defined as cash and cash equivalents as well as short-term deposits which are included in the category “other current assets” in the IFRS consolidated statement of financial position for €10.7 million as of June 30, 2022, and for €8.8 million as of December 31, 2021, but are considered by the Company as liquid and easily available.
^2^As previously disclosed by the Company, the credit facility is divided in two tranches of €25 million, each which are subject to the completion of certain condition precedents. The disbursement of the first tranche is subject to, among other conditions, (i) the Company issuing warrants to EIB in accordance with the terms and conditions of the warrants agreements entered into July 1, 2022 (ii) the receipt by the Company from the date of the EIB credit facility of an aggregate amount of at least €18 million, paid either in exchange for Company shares, or through upfront or milestone payments, The disbursement of the second tranche is further subject to, among other conditions, (i) the full drawdown of the first tranche, (ii) the receipt by the Company from the date of the EIB credit facility of an aggregate amount of at least €70 million (inclusive of the €18 million set forth above), paid either in exchange for Company shares, or through upfront or milestone payments, , (iii) (a) an out-licensing, partnership or royalty transaction with an upfront payment of at least €10 million, or (b) the initiation of a Phase III clinical trial of cedirogant by AbbVie Inc; and ( iv) operational criteria based on patient enrollment and number of sites activated in the Company’s Phase III clinical trial of lanifibranor in patients with NASH. Any funds not disbursed within 36 months following the execution of the EIB credit facility shall be cancelled.
| PRESSRELEASE |
|---|
Daix(France), Long Island City (New York, United States), September 22, 2022 – Inventiva (Euronext Paris and Nasdaq: IVA) (the “Company”), a clinical-stage biopharmaceutical company focused on the development of oral small molecule therapies for the treatment of patients with non-alcoholic steatohepatitis (NASH) and other diseases with significant unmet medical needs, today reported its interim financial results for the six months ended June 30, 2022, and provided a corporate update.
FrédéricCren, Chairman, Chief Executive Officer and cofounder of Inventiva, stated: “The firsthalf of this year has been paved with several successes for Inventiva, both financially and in terms of research & development.Our collaboration with AbbVie led to a new €4 million milestone payment following the initiation of the Phase IIb clinical trialwith cedirogant which is expected to finish H1 2023. We estimate our current cash position, combined with the expected $12 million upfrontpayment from the agreement with Sino Biopharm and the anticipated first €25 million tranche under the EIB credit facility extendsour cash runway through Q4 2023. This agreement with Sino Biopharm represents an important milestone and allows us to start the developmentof lanifibranor for the treatment of NASH in a country where the prevalence of NASH is particularly high. We also continued to progressour NASH programs with the screening of the first patient in our LEGEND trial and the clearance of our IND application by the FDA. Lookingahead, we expect even more exciting developments, including with the results from our Phase II clinical trial evaluating lanifibranorfor the treatment of NAFLD in patients with type 2 diabetes planned for Q1 2023. Finally, we are also very pleased to have feedback fromthe FDA that a single phase 2/3 trial could potentially support a marketing application for odiparcil.”
Key financialresults for the first half of 2022
| (in thousands of euros, except share and per share amounts) | June 30, <br><br>2022 | June 30, <br><br>2021 | ||||
|---|---|---|---|---|---|---|
| Revenues | 67 | 139 | ||||
| Other income | 3,325 | 2,009 | ||||
| Research and development expenses | (29,866 | ) | (19,109 | ) | ||
| Marketing – business development expenses | (278 | ) | (258 | ) | ||
| General and administrative expenses | (6,847 | ) | (5,779 | ) | ||
| Other operating income (expenses) | 131 | (607 | ) | |||
| Net operating loss | (33,468 | ) | (23,605 | ) | ||
| Net financial income | 3,983 | 824 | ||||
| Income (expense) tax | 19 | (355 | ) | |||
| Net loss for the period | (29,466 | ) | (23,136 | ) | ||
| Basic/diluted loss per share (euros/share) | (0.72 | ) | (0.60 | ) | ||
| Weighted average number of outstanding shares used to calculate basic/diluted loss per share | 40,864,457 | 38,677,187 |
Revenues for the first half of 2022 reached €0.1 million in line with the same period in 2021.
R&Dexpenses for the first half of 2022 amounted to €29.9 million, mainly driven by the development of lanifibranor in NASH, and were up 56% compared to the €19.1 million for the first half of 2021. This significant increase was driven mostly by the costs associated with the NATiV3 Phase III clinical trial of lanifibranor in NASH including a full six months of operating for the U.S. affiliate and, to a lesser extent, with the Legend Phase IIa combination trial with lanifibranor and empagliflozin in patients with NASH and type 2 diabetes.
Generaland administrative expenses (G&A) amounted to €6.8 million in the first half of 2022, an increase of 18% compared to €5.8 million in the first half of 2021, mainly due to personnel costs linked to the share-based payment expenses, a full six months of operating for the U.S. affiliate and to a lesser extent an increase in compliance fees related to the dual listing of Inventiva securities.
2
| PRESSRELEASE |
|---|
Otheroperating income (expenses) amounted to €0.1 million in the first half of 2022 compared to (€0.6) million in the first half of 2021.
Netfinancial income amounted to €4.0 million in the first half of 2022, mainly linked to foreign exchange gains due to the appreciation of the U.S. dollar against the euro during the period.
The Company’s net loss stood at (€29.5) million in the first half of 2022 compared to (€23.1) million in the first half of 2021.
Inventiva’s net cash flow (excluding any exchange rate effect) amounted to (€12.5) million in the six months ended June 30, 2022, compared to (€15.0) million in the same period in 2021.
Netcash used in operating activities amounted to €26.2 million in the first half of 2022 compared to €19.8 million for the same period in 2021. This increase in cash use is mainly due to higher R&D expenses. Cash flow from operating activities was also positively impacted in the first half of 2022 by the payment in January 2022 of €4 million milestone payment from AbbVie following the inclusion of the first patient in the ongoing Phase IIb clinical trial with cedirogant (formerly ABBV-157) in adult patients with moderate to severe chronic plaque psoriasis, and the 2021 French Research tax credit (“CIR”) for €3.6 million that was received in April 2022.
Net cash generatedused in investing activities for the first half of 2022 amounted to (€0.3) million, compared to €4.7 million^3^for the same period in 2021.
Netcash generated from financing activities for the first half of 2022 amounted to €14.0 million compared to no net cash generated from financing activities over the first half of 2021. This increase is mainly driven by the equity raised through the Company’s At-The-Market Program for approximately €9.4 million (gross proceeds) on June 15, 2022, and three loan agreements with a syndicate French banks for a total amount of €5.3 million. One of the loans has been contracted as part of a French state-guaranteed loan facility ("Prêt Garanti par l’Etat" or “PGE”) with Bpifrance and the two others obtained as part of a French State stimulus economic plan, ("Prêts Participatifs Relance" or “PPR”) granted by Crédit Agricole Champagne-Bourgogne and Société Générale.
Over the first half of 2022, the Company recorded a positive exchange rate effect on cash and cash equivalents of €2.4 million^3^ versus €3.0 million for the first half of 2021, due to the favourable evolution of USD versus Euro.
As of June 30, 2022, Inventiva’s cash and cash equivalent position was €76.4 million compared to €86.6 million as of December 31, 2021. The cash position including short term deposits^1^reach €87,2 million compared to €95.4 million as of December 31, 2021.
Considering its current R&D and clinical development programs and excluding any potential proceeds from the EIB credit facility and any potential additional financial resources, the Company estimates that its existing cash, cash equivalents and short-term deposits should allow the Company to fund its operations through Q4 2023 including the expected €25 million upfront payment from Sino Biopharm and the €25 million from the EIB credit facility^3^.
The financial statements of the first half of 2022 were approved by Inventiva’s Board of Directors on September 21, 2022. The statutory auditors have issued a limited review report. For more details, the Half-Year Financial Report is available on the Company’s website at: www.inventivapharma.com.
^3^ This estimate is based on the Company’s current business plan and excludes any potential milestones payable to or by the Company and any additional expenditures related to the potential continued development of the odiparcil program or resulting from the potential in-licensing or acquisition of additional product candidates or technologies, or any associated development the Company may pursue. The Company may have based this estimate on assumptions that are incorrect and the Company may end up using its resources sooner than anticipated.
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Financial informationafter closing the accounts
On July 1^st^, 2022, in connection with the EIB credit facility, Inventiva agreed to issue warrants to EIB as a condition to the potential funding of each tranche of the credit facility. During July 2022, the Company rebalanced its foreign currency accounts by taking advantage of the favorable exchange rate of the euro against the dollar; it converted 25 million dollars from current and term accounts into euros.
Main areasof progress in the R&D portfolio
Lanifibranorin non-alcoholic steatohepatitis (NASH)
| § | Inventiva<br> is now targeting the last patient first visit for NATiV3, the Company’s ongoing Phase<br> III clinical trial evaluating lanifibranor in patients with NASH, for H2 2023, subject to<br> the continuing implementation of measures to accelerate the enrollment rate. The delay we<br> face is primarily due to a higher than originally projected screen failure rate resulting<br> in slower than anticipated enrollment rate. In addition, we continue to see slower than predicted<br> site activation, screening and enrollment due to negative impacts from the COVID-19 pandemic<br> and we continue to be unable to conduct clinical trial activities at sites originally located<br> in Ukraine and Russia. Inventiva has implemented and is planning further measures designed<br> to accelerate enrollment and reduce screen failures in the NATiV3 trial, and additional sites<br> have been identified to help compensate for the inability to use sites in Ukraine and Russia. |
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Accordingly, the publication of the topline results of the part 1 of NATiV3 is now targeted for second half of 2025.
| § | Completion<br> of the recruitment for the investigator-initiated Phase II trial of lanifibranor in patients<br> with Non-Alcoholic Fatty Liver Disease (“NAFLD”) and with type 2 diabetes (“T2D”),<br> conducted by Professor Cusi from the University of Florida. However due to a late enrollment<br> of the last patient, the results are now expected in the first quarter 2023. |
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| § | Screening<br> in the United States of the first patient in Inventiva’s LEGEND’s proof-of-concept<br> Phase IIa combination trial with lanifibranor and empagliflozin for the treatment of patients<br> with NASH and T2D. All the 36 sites in France, the United Kingdom, Belgium, the Netherlands,<br> and the United States anticipated to participate in the trial have been qualified. Topline<br> results are expected to be published in the second half of 2023. |
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| § | Completion<br> by the FDA of its safety review of Inventiva’s Investigational New Drug application<br> (IND) for the LEGEND Phase II combination trial with lanifibranor and empagliflozin in patients<br> with NASH and T2D. |
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Collaborationwith AbbVie on cedirogant in autoimmune diseases
| § | Receipt<br> of a €4 million milestone payment from AbbVie in January 2022. This follows the<br> inclusion of the first patient with psoriasis in the ongoing Phase IIb clinical trial with<br> cedirogant, an oral RORγ inverse agonist jointly discovered by Inventiva and AbbVie<br> for the treatment of autoimmune diseases, in November 2021. – January 31, 2022 |
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Other significantmilestones
| § | Signature<br> of a licensing and collaboration agreement with Sino Biopharm through their CTTQ subsidiary,<br> Chia Tai Tianqing Pharmaceutical Group, to develop and commercialize lanifibranor for the<br> treatment of NASH and other metabolic diseases in Greater China – September 2022 |
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| § | FDA<br> feedback that odiparcil can be dosed in pediatric MPS VI patients and that the single phase<br> II/III trial design presented by the Company could potentially support a future odiparcil<br> marketing application. Inventiva’s current plans not to pursue odiparcil development<br> directly remain; however, the Company believes this feedback increases the potential for<br> the development of odiparcil for the treatment of MPS VI and continues to review potential<br> options to further development of odiparcil for the treatment of MPS VI, which may include<br> pursuing a partnership – August, 2022 |
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| § | Entry<br> of Inventiva in the Euronext Tech Leaders segment, a new Euronext segment which includes<br> more than 100 high-growth and leading tech companies across Europe – June 7, 2022 |
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| § | Signature<br> of a credit facility agreement for up to €50 million, subject to conditions precedent,<br> with the European Investment Bank (“EIB”) with the plan to use any potential<br> borrowings under the facility towards Inventiva’s preclinical and clinical pipeline,<br> including to help fund a portion of its Phase III clinical trial of lanifibranor in patients<br> with NASH, subject to satisfaction of conditions precedent – May 16, 2022 |
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Next keyexpected milestones
| § | Publication<br> of the results of the investigator-initiated<br> study with lanifibranor in patients with NAFLD and T2D – now planned for the first quarter of 2023 |
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| § | Study<br> completion of Phase IIb trial with cedirogant in patients with psoriasis conducted by AbbVie<br> – planned for first half of 2023 |
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| § | Publication<br> of the topline results of the Phase IIa LEGEND of<br> lanifibranor in combination with empagliflozin in patients with NASH and T2D –<br> planned for second half of 2023 |
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| § | Last<br> Patient First Visit of the Phase III NATiV3 clinical trial evaluating lanifibranor in NASH<br> – now targeted for second half of 2023 |
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Upcominginvestor conference participation
| § | Guggenheim<br> Nantucket Therapeutics Conference – September 27-29, Nantucket |
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| § | Lyon<br> Pôle Bourse – September 28, Lyon |
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| § | HealthTech<br> Innovation Days – October 12-14, Paris |
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| § | Portzamparc<br> BNP Paribas Biotech & Santé – October 4, Virtual |
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| § | H.C.<br> Wainwright 6th Annual NASH Investor Conference – October 17, Virtual |
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| § | Jefferies<br> 2022 London Healthcare Conference – November 15-17, London |
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Upcomingscientific conference participation
| § | 91èmes<br> Journées Scientifiques de l’AFEF – October 5-8, Dijon |
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| § | AASLD<br> - The Liver Meeting – November 4-8, Washington, DC |
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| § | 6^th^Obesity and NASH Drug Development Summit – November 29 through December 1,<br> Boston |
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| § | MOSAIC<br> Conference – December 5-6, Washington, DC |
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Conferencecall
A conferencecall in English will be held tomorrow, Thursday, September 22, 2022 at 8:00 am (New York time) 2:00 pm (Paris time).
The conference call and the slides of the presentation will be webcast live at: https://edge.media-server.com/mmc/p/v5uzhkr8 and also available on Inventiva’s onwards in the “Investors” – “Financial results” section.
In order to receive the conference access information necessary to join the conference call, it is required to register in advance using the following link: https://register.vevent.com/register/BI3a0c8ee6960a4b7a9db4026550ff3f51.
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In the 10 minutes prior to the call start time, participants will need to use the conference access information provided in the e-mail received at the point of registering (dial-in number and access code).
A replay of the conference call and the presentation will be available after the event at: https://inventivapharma.com/investors/financial-results-presentations/.
Next financialresults publication
| § | Q3 2022 Revenues and cash position: Thursday, November 10, 2022 (after U.S. market<br> close) |
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About Inventiva
Inventiva is a clinical-stage biopharmaceutical company focused on the research and development of oral small molecule therapies for the treatment of patients with NASH and other diseases with significant unmet medical need. The Company benefits from a strong expertise and experience in the domain of compounds targeting nuclear receptors, transcription factors and epigenetic modulation. Inventiva’s lead product candidate, lanifibranor, is currently in a pivotal Phase III clinical trial, NATiV3, for the treatment of adult patients with NASH, a common and progressive chronic liver disease for which there are currently no approved therapies.
The Company has established a strategic collaboration with AbbVie in the area of autoimmune diseases that resulted in the discovery of the drug candidate cedirogant (ABBV-157), an oral RORγ inverse agonist which is being evaluated in a Phase IIb clinical trial, led by AbbVie, in adult patients with moderate to severe chronic plaque psoriasis. Inventiva’s pipeline also includes odiparcil, a drug candidate for the treatment of adult mucopolysaccharidoses (MPS) VI patients. As part of Inventiva’s decision to focus clinical efforts on the development of lanifibranor, it suspended its clinical efforts relating to odiparcil and is reviewing available options with respect to its potential further development. Inventiva is in the process of selecting an oncology development candidate for its Hippo signalling pathway program.
The Company has a scientific team of approximately 80 people with deep expertise in the fields of biology, medicinal and computational chemistry, pharmacokinetics and pharmacology, and clinical development. It owns an extensive library of approximately 240,000 pharmacologically relevant molecules, approximately 60% of which are proprietary, as well as a wholly-owned research and development facility.
Inventiva is a public company listed on compartment C of the regulated market of Euronext Paris (ticker: IVA, ISIN: FR0013233012) and on the Nasdaq Global Market in the United States (ticker: IVA).
Contacts
| Inventiva<br><br> <br>Pascaline<br> Clerc<br><br> <br>VP<br> of Global External Affairs<br><br> <br>media@inventivapharma.com<br><br> <br>+1 240 620<br> 9175 | Brunswick Group<br><br> <br>Tristan Roquet<br> Montegon /<br><br> <br>Aude<br> Lepreux / Matthieu Benoist<br><br> <br>Media<br> relations<br><br> <br>inventiva@brunswickgroup.com<br><br> <br>+33<br> 1 53 96 83 83 | Westwicke, an ICR Company<br><br> <br>Patricia<br> L. Bank<br><br> <br>Investor<br> relations<br><br> <br>patti.bank@westwicke.com<br><br> <br>+1<br> 415 513 1284 |
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Important Notice
Thispress release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private SecuritiesLitigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release are forward-lookingstatements. These statements include, but are not limited to, forecasts and estimates with respect to Inventiva’s pre-clinicalprograms and clinical trials, including recruitment, screening and enrolment for those trials, including the LEGEND trial forthe treatment of NAFLD, the NATiV3 Phase III clinical trial with lanifibranor in NASH, the investigator-initiated Phase II trial of lanifibranorin patients with NAFLD and T2D, and the expected Phase IIb clinical trial of cedirogant led by AbbVie, potential development of and regulatorypathway for odiparcil, clinical trial data releases and publications, the information, insights and impacts that may be gathered fromclinical trials the potential therapeutic benefits of lanifibranor generally and in combination with empagliflozin, the design of trialsand any potential amendments to trial design, any measures to implement or to decrease the screen failure rate or increase the enrollmentrate or other intended impacts on the NATiV3 trial, and the anticipated benefits related thereto, the Company’s agreement withSino Biopharm, including expectations with respect to enrollment of patients in Greater China in the NATiV3 trial, pipeline and preclinicaland clinical development plans, milestone payments, royalties and product sales, potential proceeds under the Company’s financingarrangements, future activities, expectations, plans, growth and prospects of Inventiva and the sufficiency of Inventiva’s cashresources and cash runway. Certain of these statements, forecasts and estimates can be recognized by the use of words such as, withoutlimitation, “believes”, “anticipates”, “expects”, “intends”, “plans”, “seeks”, “estimates”, “may”, “will”, “would”, “could”, “might”, “should”, “plans”, “designed”, “hopefully” , “target”, “aim”, and “continue”and similar expressions. Such statements are not historical facts but rather are statements of future expectations and other forward-lookingstatements that are based on management's beliefs. These statements reflect such views and assumptions prevailing as of the date of thestatements and involve known and unknown risks and uncertainties that could cause future results, performance or future events to differmaterially from those expressed or implied in such statements. Future events are difficult to predict and may depend upon factors thatare beyond Inventiva's control. There can be no guarantees with respect to pipeline product candidates that the clinical trial resultswill be available on their anticipated timeline, that future clinical trials will be initiated as anticipated, that product candidateswill receive the necessary regulatory approvals, or that any of the anticipated milestones by Inventiva or its partners will be reachedon their expected timeline, or at all. Actual results may turn out to be materially different from the anticipated future results, performanceor achievements expressed or implied by such statements, forecasts and estimates, due to a number of factors, including that Inventivais a clinical-stage company with no approved products and no historical product revenues, Inventiva has incurred significant lossessince inception, Inventiva has a limited operating history and has never generated any revenue from product sales, Inventivawill require additional capital to finance its operations, Inventiva's future success is dependent on the successful clinical development,regulatory approval and subsequent commercialization of current and any future product candidates, preclinical studies or earlier clinicaltrials are not necessarily predictive of future results and the results of Inventiva's clinical trials may not support Inventiva's productcandidate claims, Inventiva may encounter substantial delays in its clinical trials or Inventiva may fail to demonstrate safetyand efficacy to the satisfaction of applicable regulatory authorities, enrolment and retention of patients in clinical trials is an expensiveand time-consuming process and could be made more difficult or rendered impossible by multiple factors outside Inventiva's control, Inventiva'sproduct candidates may cause adverse drug reactions or have other properties that could delay or prevent their regulatory approval, orlimit their commercial potential, Inventiva faces substantial competition and Inventiva’s business, and preclinical studiesand clinical development programs and timelines, its financial condition and results of operations could be materially and adverselyaffected by the current COVID-19 pandemic and geopolitical events, such as the conflict between Russia and Ukraine, related sanctionsand related impacts and potential impacts on the initiation, enrolment and completion of Inventiva’s clinical trials on anticipatedtimelines, and macroeconomic conditions, including global inflation and uncertain financial markets. Given these risks and uncertainties,no representations are made as to the accuracy or fairness of such forward-looking statements, forecasts and estimates. Furthermore,forward-looking statements, forecasts and estimates only speak as of the date of this press release. Readers are cautioned not to placeundue reliance on any of these forward-looking statements.
Please referto the Universal Registration Document for the year ended December 31, 2021 filed with the Autorité des Marchés Financierson March 11, 2022, the Annual Report on Form 20-F for the year ended December 31, 2021 filed with the Securities and ExchangeCommission on March 11, 2022 and the financial report for the first half of 2022 to be filed Securities and Exchange Commissionfor additional information in relation to such factors, risks and uncertainties.
All informationin this press release is as of the date of the release. Except as required by law, Inventiva has no intention and is under no obligationto update or review the forward-looking statements referred to above.
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