[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Savara Inc. reported a reduced net loss of $8.3 million for Q1 2022, with total assets at $166.2 million and cash flow from operations showing an $8.4 million outflow [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets decreased to $166.2 million, primarily due to reduced short-term investments, while cash and equivalents increased to $79.2 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $79,227 | $34,012 | | Short-term investments | $72,570 | $127,159 | | Total current assets | $154,537 | $165,000 | | **Total assets** | **$166,209** | **$176,598** | | **Liabilities & Equity** | | | | Total current liabilities | $16,323 | $14,660 | | Total liabilities | $29,734 | $32,100 | | Total stockholders' equity | $136,475 | $144,498 | | **Total liabilities and stockholders' equity** | **$166,209** | **$176,598** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a net loss of $8.3 million for Q1 2022, a reduction from $10.2 million in Q1 2021, driven by lower operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Research and development | $5,684 | $7,589 | | General and administrative | $2,354 | $2,778 | | Total operating expenses | $8,046 | $10,414 | | Loss from operations | $(8,046) | $(10,414) | | **Net loss** | **$(8,300)** | **$(10,217)** | | **Net loss per share (basic and diluted)** | **$(0.05)** | **$(0.13)** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $8.4 million, while investing activities provided $53.7 million, leading to a $45.2 million increase in cash and equivalents Cash Flow Summary (in thousands) | Activity | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,425) | $(9,597) | | Net cash provided by (used in) investing activities | $53,665 | $(77,739) | | Net cash (used in) provided by financing activities | $(1) | $120,466 | | **Increase in cash and cash equivalents** | **$45,215** | **$33,102** | | **Cash and cash equivalents end of period** | **$79,227** | **$55,982** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's lead program molgramostim, sufficient liquidity for 12 months despite a $308.8 million deficit, and recent debt refinancing - The company is a clinical-stage biopharmaceutical firm focused on rare respiratory diseases, with its lead program being molgramostim for autoimmune pulmonary alveolar proteinosis (aPAP), which is currently in Phase 3 development[17](index=17&type=chunk) - As of March 31, 2022, the company had an accumulated deficit of approximately **$308.8 million**. However, its cash, cash equivalents, and short-term investments are considered sufficient to fund operations for the subsequent twelve months[22](index=22&type=chunk)[25](index=25&type=chunk) - In March 2021, the company completed a public offering of common stock and pre-funded warrants, resulting in net proceeds of approximately **$122.2 million**[54](index=54&type=chunk)[56](index=56&type=chunk) - The company has future commitments including up to **$3.2 million** in milestone payments for molgramostim manufacturing and an estimated **$33 million** for the IMPALA-2 clinical trial services with Parexel[67](index=67&type=chunk)[69](index=69&type=chunk) - In April 2022, the company entered into an amended and restated loan agreement, refinancing its debt with a new **$26.5 million** term loan facility with an interest-only payment period through April 2026[86](index=86&type=chunk)[87](index=87&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the reduced net loss in Q1 2022 due to lower operating expenses and confirms strong liquidity, sufficient for the next twelve months [Overview](index=18&type=section&id=Overview) Savara is a clinical-stage biopharmaceutical company focused on rare respiratory diseases, with an accumulated deficit of **$308.8 million** as of March 31, 2022 - The company's lead program is molgramostim nebulizer solution, an inhaled biologic in Phase 3 development for autoimmune pulmonary alveolar proteinosis (aPAP)[94](index=94&type=chunk) - The company has incurred operating losses every year since inception, with a net loss of **$8.3 million** for Q1 2022 and an accumulated deficit of **$308.8 million** as of March 31, 2022[96](index=96&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Total operating expenses decreased by **$2.4 million** in Q1 2022, leading to a reduced net loss of **$8.3 million**, primarily due to lower R&D and G&A costs Comparison of Operating Results (in thousands) | Expense Category | Q1 2022 | Q1 2021 | Dollar Change | | :--- | :--- | :--- | :--- | | Research and development | $5,684 | $7,589 | $(1,905) | | General and administrative | $2,354 | $2,778 | $(424) | | **Total operating expenses** | **$8,046** | **$10,414** | **$(2,368)** | | **Net loss** | **$(8,300)** | **$(10,217)** | **$1,917** | - The **$1.9 million** (25.1%) decrease in R&D expenses was mainly due to a **$2.5 million** reduction in costs for the close-out of vancomycin activities, partly offset by a **$0.6 million** increase in costs for the molgramostim IMPALA-2 trial[113](index=113&type=chunk) - The **$0.4 million** (15.3%) decrease in G&A expenses was attributed to reduced administrative and compensation costs from streamlining activities initiated in Q3 2021[114](index=114&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$151.8 million** in cash and investments as of March 31, 2022, deemed sufficient for the next twelve months, with future funding dependent on clinical development - As of March 31, 2022, the company held **$79.2 million** in cash and cash equivalents and **$72.6 million** in short-term investments, for a total of approximately **$151.8 million**[116](index=116&type=chunk)[125](index=125&type=chunk) - In April 2022, the company refinanced its debt by entering into an Amended Loan Agreement for a **$26.5 million** term loan facility[117](index=117&type=chunk) - The company believes its current capital is sufficient to fund planned activities, but may need to raise additional capital to further fund development, seek regulatory approvals, and begin commercialization[125](index=125&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure from interest rates and foreign currency fluctuations is not considered material, with a 10% change having no material effect - The company's market risk exposure from interest rates on cash, cash equivalents, and short-term investments is not considered material[129](index=129&type=chunk) - A 10% change in interest rates on the company's long-term debt as of March 31, 2022, would not have had a material effect on interest expense[130](index=130&type=chunk) - Foreign currency risk from operations in Denmark is managed, and a 10% change in the Krone-to-dollar or Euro-to-dollar exchange rate would not have had a material effect on financial results[131](index=131&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of March 31, 2022, with no material changes during the quarter - Management concluded that as of March 31, 2022, the company's disclosure controls and procedures were effective[134](index=134&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of March 31, 2022, based on the COSO framework[135](index=135&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[136](index=136&type=chunk) [PART II. OTHER INFORMATION](index=25&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material pending litigation or other material legal proceedings - The company is not currently a party to any material pending litigation or other material legal proceeding[137](index=137&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes in the company's risk factors from those described in the Annual Report on Form 10-K for the year ended December 31, 2021 - There have been no material changes in the company's risk factors from those described in the Annual Report on Form 10-K for the year ended December 31, 2021[138](index=138&type=chunk)

PART I [Business](index=6&type=section&id=Item%201.%20Business) The company is a clinical-stage biopharmaceutical firm focused on developing its lead candidate, molgramostim, for the rare respiratory disease aPAP - The company's primary focus is its lead product candidate, **molgramostim nebulizer solution**, an inhaled GM-CSF in Phase 3 development for the treatment of autoimmune pulmonary alveolar proteinosis (aPAP)[17](index=17&type=chunk) - Savara's corporate strategy involves advancing the molgramostim aPAP program, ensuring manufacturing is validated for commercial scale, and outsourcing capital-intensive operations[20](index=20&type=chunk) - The company has discontinued development of its vancomycin program after the Phase 3 AVAIL trial failed to meet its primary endpoint in December 2020 and also discontinued the Apulmiq clinical development program[26](index=26&type=chunk)[27](index=27&type=chunk) - Molgramostim has received **Fast Track Designation, Breakthrough Therapy Designation, and Orphan Drug Designation** from the FDA for the treatment of aPAP[19](index=19&type=chunk)[40](index=40&type=chunk) - The ongoing pivotal Phase 3 IMPALA-2 trial for molgramostim is a 48-week study expected to enroll approximately 160 patients, with top-line data anticipated in the **second quarter of 2024**[45](index=45&type=chunk)[46](index=46&type=chunk) - Savara relies on an outsourced manufacturing model with key partners including GEMA Biotech, Patheon, and PARI Pharma[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - The company has **no patent protection** for molgramostim for the treatment of aPAP and primarily relies on Orphan Drug exclusivity and proprietary delivery devices[239](index=239&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from its history of financial losses, dependence on a single product candidate, and reliance on third-party manufacturers - The company has a history of significant losses, with a **net loss of $43.0 million in 2021** and an **accumulated deficit of $300.5 million** as of December 31, 2021[153](index=153&type=chunk)[154](index=154&type=chunk) - Savara is substantially dependent on the success of its single lead product candidate, molgramostim, highlighting the high risk of clinical development[166](index=166&type=chunk)[168](index=168&type=chunk) - The company **completely relies on third-party CMOs** for manufacturing and CROs for clinical trials, such as Parexel for the IMPALA-2 trial[177](index=177&type=chunk)[185](index=185&type=chunk) - There is **no patent protection** for molgramostim for the treatment of aPAP, and the company relies on Orphan Drug exclusivity which may not be granted[213](index=213&type=chunk)[239](index=239&type=chunk) - The company's stock price is highly volatile and faces a risk of being delisted from Nasdaq if the minimum closing bid price of $1.00 is not maintained[268](index=268&type=chunk)[272](index=272&type=chunk) [Unresolved Staff Comments](index=50&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved comments from the SEC staff - As of the report date, Savara Inc. has **no unresolved comments** issued by the SEC staff[279](index=279&type=chunk) [Properties](index=50&type=section&id=Item%202.%20Properties) The company leases a small office space in Austin, Texas for its corporate headquarters - The company leases approximately **2,260 square feet** of office space in Austin, Texas for its corporate headquarters[280](index=280&type=chunk) [Legal Proceedings](index=51&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The company is not currently involved in any material pending litigation or other material legal proceedings[281](index=281&type=chunk) [Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Mine safety disclosures are not applicable to Savara Inc[282](index=282&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=52&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the Nasdaq under the symbol 'SVRA', with details provided on equity compensation plans - The company's common stock trades on the Nasdaq Global Select Market with the ticker symbol **'SVRA'**[285](index=285&type=chunk) Equity Compensation Plan Information as of December 31, 2021 | Plan Category | Number of securities to be issued upon exercise (a) | Weighted-average exercise price (b) | Number of securities remaining available for future issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 6,061,216 | $2.48 | 202,362 | | Equity compensation plans not approved by security holders | 1,430,000 | $1.25 | 270,000 | | **Total** | **7,491,216** | **$2.25** | **472,362** | [Reserved](index=52&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company's net loss narrowed in 2021 due to lower operating expenses, while its cash position was significantly strengthened by a public offering Results of Operations | Metric | 2021 (in millions) | 2020 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | **Net Loss** | **$(43.0)** | **$(49.6)** | **$6.6** | | Research and Development | $29.0 | $35.0 | $(6.0) | | General and Administrative | $12.4 | $14.3 | $(1.9) | | Loss from Operations | $(41.5) | $(49.3) | $7.8 | - R&D expenses **decreased by $6.0 million (17.3%)** in 2021, primarily due to the wind-down of the discontinued vancomycin study, partially offset by increased costs for the molgramostim IMPALA-2 trial[327](index=327&type=chunk) - G&A expenses **decreased by $1.9 million (13.4%)** in 2021, mainly because 2020 included one-time severance payments and non-cash stock-based compensation charges for former executives[328](index=328&type=chunk) - As of December 31, 2021, the company had **$161.2 million in cash, cash equivalents, and short-term investments**, significantly up from $82.2 million at the end of 2020[154](index=154&type=chunk)[330](index=330&type=chunk) - In March 2021, the company completed a public offering of common stock and pre-funded warrants, generating **net proceeds of approximately $122.2 million**[337](index=337&type=chunk) - Net cash used in operating activities was **$40.1 million** for the year ended December 31, 2021, consistent with the $39.8 million used in 2020[338](index=338&type=chunk)[339](index=339&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's exposure to interest rate and foreign currency exchange risks is not considered material - The company has market risk exposure from interest rates on its cash and investments, but does not anticipate material risks from interest rate changes[352](index=352&type=chunk)[354](index=354&type=chunk) - Foreign currency risk exists due to operations in Denmark, but exchange rate losses were not significant in 2021 or 2020[353](index=353&type=chunk) [Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements and supplementary data filed with the report [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=61&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on accounting and financial disclosure - There were **no disagreements** with accountants on accounting and financial disclosure[357](index=357&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of year-end 2021 - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2021[359](index=359&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2021, based on the COSO framework[360](index=360&type=chunk) [Other Information](index=62&type=section&id=Item%209B.%20Other%20Information) This item is not applicable PART III [Directors, Executive Officers, and Corporate Governance](index=63&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Required information on directors, officers, and corporate governance is incorporated by reference from the company's proxy statement - The information required by this item is **incorporated by reference** from the company's definitive proxy statement[366](index=366&type=chunk)[368](index=368&type=chunk) [Executive Compensation](index=63&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's proxy statement - The information required by this item is **incorporated by reference** from the company's definitive proxy statement[369](index=369&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=63&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership is incorporated by reference from the company's proxy statement - The information required by this item is **incorporated by reference** from the company's definitive proxy statement[370](index=370&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=63&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the company's proxy statement - The information required by this item is **incorporated by reference** from the company's definitive proxy statement[371](index=371&type=chunk) [Principal Accounting Fees and Services](index=63&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding accounting fees and services is incorporated by reference from the company's proxy statement - The information required by this item is **incorporated by reference** from the company's definitive proxy statement[372](index=372&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=64&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed as part of the report - This item lists the financial statements, financial statement schedules, and exhibits filed with the report[373](index=373&type=chunk) [Form 10-K Summary](index=64&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - A Form 10-K summary is not applicable[375](index=375&type=chunk)

PART I. [FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Savara Inc. reported a **$31.7 million** net loss for the nine months ended September 30, 2021, with total assets of **$187.3 million** and stockholders' equity of **$155.2 million**, significantly impacted by a public offering [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2021, total assets increased to **$187.3 million** from **$97.7 million** at year-end 2020, primarily due to increased cash and investments, leading to substantial growth in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 (Unaudited) | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $44,699 | $22,880 | | Short-term investments | $126,107 | $59,308 | | Total current assets | $174,584 | $85,121 | | Total assets | $187,274 | $97,745 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $10,661 | $8,174 | | Long-term debt | $21,350 | $25,104 | | Total liabilities | $32,045 | $33,362 | | Total stockholders' equity | $155,229 | $64,383 | | Total liabilities and stockholders' equity | $187,274 | $97,745 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a net loss of **$10.5 million** for Q3 2021 and **$31.7 million** for the nine-month period, showing an improvement from 2020 primarily due to lower operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Total operating expenses | $9,972 | $11,041 | $30,838 | $36,544 | | Loss from operations | $(9,972) | $(10,785) | $(30,838) | $(36,288) | | Net loss | $(10,546) | $(11,063) | $(31,704) | $(35,874) | | Net loss per share (basic and diluted) | $(0.07) | $(0.18) | $(0.25) | $(0.61) | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity significantly increased to **$155.2 million** by September 30, 2021, primarily driven by a **$121.8 million** public offering, partially offset by net loss and warrant repurchases - A public offering in Q1 2021 resulted in the issuance of 57,479,978 shares of common stock and pre-funded warrants, generating net proceeds of approximately **$121.8 million**[13](index=13&type=chunk) - The company repurchased outstanding pre-funded warrants for **$3.9 million**, which was accounted for as a reduction in additional paid-in capital[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$30.7 million** for the nine months ended September 30, 2021, offset by **$120.8 million** from financing activities, resulting in a **$21.8 million** net increase in cash Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(30,718) | $(27,536) | | Net cash (used in) provided by investing activities | $(68,188) | $9,434 | | Net cash provided by financing activities | $120,800 | $3,689 | | **Increase (decrease) in cash and cash equivalents** | **$21,819** | **$(14,585)** | | Cash and cash equivalents end of period | $44,699 | $35,219 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, financial instruments, and operations, including the molgramostim program, liquidity, long-term debt, a significant public offering, and clinical trial commitments - The company's lead program is molgramostim nebulizer solution, an inhaled therapy in Phase 3 development for autoimmune pulmonary alveolar proteinosis (aPAP)[22](index=22&type=chunk) - As of September 30, 2021, the company had cash, cash equivalents, and short-term investments totaling **$170.8 million**, considered sufficient to fund operations for at least the next twelve months[30](index=30&type=chunk) - In March 2021, the company completed a public offering, selling common stock and pre-funded warrants for net proceeds of approximately **$122.1 million**[66](index=66&type=chunk)[68](index=68&type=chunk) - The company has a **$25 million** term loan with Silicon Valley Bank, with an amendment in March 2021 extending the interest-only period to June 30, 2022, upon meeting a key clinical trial milestone[48](index=48&type=chunk)[50](index=50&type=chunk) - The company entered a Master Services Agreement with Parexel for contract research services related to the IMPALA 2 trial, with estimated fees and expenses of approximately **$32 million** over the trial's course[82](index=82&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses decreased net loss for Q3 and the first nine months of 2021, driven by R&D expense shifts and lower G&A, with liquidity significantly bolstered by a **$122.1 million** public offering - The company's lead program is molgramostim, an inhaled therapy in Phase 3 development for autoimmune pulmonary alveolar proteinosis (aPAP)[103](index=103&type=chunk) - As of September 30, 2021, the company had **$44.7 million** in cash and cash equivalents and **$126.1 million** in short-term investments, deemed sufficient to fund operations for at least the next twelve months[107](index=107&type=chunk)[139](index=139&type=chunk) R&D Expense by Program (in thousands) | Product Candidate | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Molgramostim | $6,520 | $3,340 | $18,767 | $11,843 | | Vancomycin | $12 | $2,145 | $2,606 | $7,542 | | Other | $— | $118 | $— | $5,496 | | **Total R&D** | **$6,532** | **$5,603** | **$21,373** | **$24,881** | - The decrease in net loss for the nine months ended Sep 30, 2021, was primarily due to a **$5.4 million** charge for acquiring a product candidate in 2020 and a **$4.9 million** decrease in activities for the vancomycin study, offset by a **$6.9 million** increase in costs for the molgramostim aPAP trial[127](index=127&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rates and foreign currency, but management assesses these as non-material, with hypothetical changes having no significant financial impact - The company's primary market risks are interest rate risk on its cash, investments, and debt, and foreign currency risk from its Danish operations[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - Management asserts that a hypothetical 1% change in interest rates or a 10% change in foreign currency exchange rates would not materially affect the company's financial condition or results of operations[143](index=143&type=chunk)[145](index=145&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of September 30, 2021, with no material changes reported - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[148](index=148&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of September 30, 2021[149](index=149&type=chunk) - There were no changes in internal control over financial reporting during the nine months ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, internal controls[151](index=151&type=chunk) PART II. [OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material pending litigation or other material legal proceedings - As of the filing date, Savara Inc. is not a party to any material pending legal proceedings[153](index=153&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2020 - There have been no material changes in the company's risk factors from those described in the Annual Report on Form 10-K for the year ended December 31, 2020[154](index=154&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[155](index=155&type=chunk)

Washington, D.C. 20549 UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-32157 Savara Inc. (Exact name of registrant as specified in its charter) Delaware 84-1318182 (State or other jurisdiction of inco ...

FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-32157 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (I.R.S. Employer Identification No.) (512) 614-1848 (Registrant's telephone number, including area code) N/A Savara Inc. ( ...

PART I [Business Overview](index=4&type=section&id=Item%201.%20Business.) Savara Inc. is a biopharmaceutical company focused on rare lung diseases, with inhaled molgramostim for aPAP in Phase III development Business Overview - Savara Inc. is a company focused on rare lung diseases, with its main project, **molgramostim inhaled solution** (formerly Molgradex), an inhaled granulocyte-macrophage colony-stimulating factor (GM-CSF), currently in **Phase III development** for autoimmune pulmonary alveolar proteinosis (aPAP)[12](index=12&type=chunk) Corporate Strategy - The company aims to be a leader in rare lung disease treatment by developing and commercializing innovative, best-in-class drugs to address unmet medical needs[13](index=13&type=chunk) - Key strategic elements include: * Advancing the **molgramostim aPAP program** and the **Phase III IMPALA 2 clinical trial**, expected to launch by the end of **Q2 2021** * Ensuring all manufacturing processes are validated for commercial scale and seeking a second molgramostim manufacturer to mitigate risk * Outsourcing capital-intensive operations to achieve efficient, capital-saving pipeline development through high-quality specialized vendors and consultants[16](index=16&type=chunk) Molgramostim – aPAP - Autoimmune pulmonary alveolar proteinosis (aPAP) is a rare lung disease, accounting for approximately **90% of all PAP patients**, characterized by surfactant accumulation in the alveoli, stemming from an autoimmune response against GM-CSF[27](index=27&type=chunk) - Current standard treatment for aPAP is whole lung lavage (WLL), an invasive procedure that may only provide temporary symptom relief, with **no approved drug therapies** currently available[29](index=29&type=chunk)[30](index=30&type=chunk) - **Molgramostim**, an inhaled formulation of non-glycosylated recombinant human GM-CSF, has received **FDA Orphan Drug, Fast Track, and Breakthrough Therapy designations**, and is used in some European countries for designated patients[34](index=34&type=chunk)[36](index=36&type=chunk) - Key advantages of molgramostim include: * A solid product foundation combining an approved active drug class with drug delivery technology * Direct pulmonary delivery of GM-CSF, potentially achieving **high clinical efficacy with limited systemic side effects** * An efficient nebulizer providing rapid and convenient administration suitable for long-term treatment of chronic aPAP * Market protection through **Orphan Drug status**, potential biologics exclusivity, and **Fast Track and Breakthrough Therapy designations** * Proprietary cell banks for drug substance manufacturing and exclusive device agreements for optimized molgramostim inhaled solution delivery[42](index=42&type=chunk) - The **Phase III IMPALA trial did not meet its primary endpoint** (improvement in alveolar-arterial oxygen gradient (A-a)DO2), but data showed molgramostim exhibited statistically significant or favorable trends in secondary and exploratory endpoints, including **significant improvements in SGRQ and DLCO**, and sustained treatment effects during the open-label period[14](index=14&type=chunk)[17](index=17&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk)[46](index=46&type=chunk)[49](index=49&type=chunk) - **IMPALA 2** is a new **48-week, randomized, double-blind, placebo-controlled Phase III clinical trial** comparing the efficacy and safety of molgramostim 300 µg once daily inhalation versus placebo, with the primary endpoint being change in DLCO percent predicted from baseline, expected to launch by **Q2 2021** and yield top-line data in **Q2 2024**[52](index=52&type=chunk)[53](index=53&type=chunk) Molgramostim – NTM - Molgramostim was previously studied for non-tuberculous mycobacteria (NTM) lung infections in cystic fibrosis (CF) and non-CF patients; the **OPTIMA trial did not meet its primary endpoint**, and the **ENCORE trial was discontinued** due to COVID-19 and new CFTR modulator availability[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) - Based on OPTIMA and ENCORE trial results, the company decided to **discontinue further development of molgramostim for NTM-related indications**, focusing resources on aPAP as its primary indication[21](index=21&type=chunk) Vancomycin hydrochloride inhalation powder - **Vancomycin hydrochloride inhalation powder (AeroVanc)** was the first inhaled antibiotic developed for persistent methicillin-resistant Staphylococcus aureus (MRSA) lung infections in CF patients, but its **Phase III AVAIL clinical trial did not meet its primary endpoint** (absolute change from baseline in FEV1 percent predicted)[22](index=22&type=chunk)[23](index=23&type=chunk) - Based on AVAIL trial results, the company has **discontinued further development of the vancomycin program**[24](index=24&type=chunk) Inhaled liposomal ciprofloxacin ("Apulmiq") - The company previously entered into an exclusive license and collaboration agreement with Grifols, S.A. for global development and commercialization rights to **Apulmiq (inhaled liposomal ciprofloxacin)** for non-cystic fibrosis bronchiectasis (NCFB)[25](index=25&type=chunk) - As part of its **December 2020 pipeline rationalization strategy**, the company has **discontinued the clinical development program for Apulmiq**, concentrating resources on molgramostim development for aPAP and the IMPALA 2 trial[26](index=26&type=chunk)[75](index=75&type=chunk) Manufacturing and Supply - The company does not own or operate manufacturing facilities, instead **outsourcing molgramostim production and supply** through contracts with GEMA Biotech S.A. (drug substance), Patheon UK Limited (drug product), and PARI Pharma GmbH (eFlow® nebulizer system)[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - The company plans to seek a **second drug substance manufacturer** to mitigate production risks and ensure drug substance supply[55](index=55&type=chunk) Commercialization - Savara holds **exclusive rights to molgramostim in the U.S. and all other major markets**, planning independent commercialization in the U.S. while potentially seeking strategic partners in the EU and other regions[59](index=59&type=chunk) Key License and Other Agreements - A Master Services Agreement (MSA) with Parexel International (IRL) Limited stipulates Parexel will provide contract research services for the **IMPALA 2 clinical trial**, with estimated costs of approximately **$31 million**[60](index=60&type=chunk) - A license and collaboration agreement with PARI Pharma GmbH grants **exclusive global rights to the eFlow nebulizer system** for pulmonary delivery of hGM-CSF in aPAP, with milestone and sales royalty payment obligations[61](index=61&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - A manufacturing and supply agreement with GEMA Biotech S.A. designates GEMA as the **exclusive supplier of molgramostim's active pharmaceutical ingredient (API)**, transferring master and working cell banks, with the company obligated to pay milestones and sales royalties[67](index=67&type=chunk)[69](index=69&type=chunk) - A Master Manufacturing Services Agreement with Patheon UK Limited assigns Patheon responsibility for producing molgramostim clinical trial materials and future commercial supply[71](index=71&type=chunk)[72](index=72&type=chunk) Government Regulation - Drug development and commercialization are subject to **strict regulation by the FDA and international regulatory bodies**, encompassing preclinical and clinical trials, BLA submission and review, and post-market requirements[76](index=76&type=chunk)[77](index=77&type=chunk) - Expedited approval pathways include: * **Fast Track Designation**: For new drugs treating serious or life-threatening conditions that address unmet medical needs * **Accelerated Approval**: Based on surrogate or intermediate clinical endpoints for BLA approval * **Breakthrough Therapy Designation**: For drugs treating serious or life-threatening conditions with preliminary clinical evidence suggesting substantial improvement over existing therapies; **molgramostim has received this designation**[87](index=87&type=chunk)[88](index=88&type=chunk)[96](index=96&type=chunk) - **Orphan Drug Designation** grants drugs for rare diseases **7 years (U.S.) and 10 years (EU) of market exclusivity**, tax credits, and BLA application fee waivers, but carries the risk of a competing product gaining prior approval[90](index=90&type=chunk)[92](index=92&type=chunk)[94](index=94&type=chunk) - Post-market products must continuously comply with **FDA regulations** for record-keeping, adverse event reporting, cGMP, and advertising, with violations potentially leading to product recalls, approval withdrawal, or fines[97](index=97&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) - **Molgramostim**, as a drug-device combination product, will be primarily regulated by the **FDA's Center for Drug Evaluation and Research (CDER)**[101](index=101&type=chunk) - The company must also comply with healthcare laws and compliance requirements such as the **Federal Anti-Kickback Statute, False Claims Act, HIPAA privacy laws, Sunshine Act (Open Payments), and the Foreign Corrupt Practices Act (FCPA)**[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[107](index=107&type=chunk)[110](index=110&type=chunk) - Drug sales coverage and reimbursement are significantly influenced by **third-party payers** (government healthcare programs, managed care, private insurance), who increasingly challenge drug prices and cost-effectiveness, potentially limiting product market acceptance and revenue[111](index=111&type=chunk) - The **Affordable Care Act** and subsequent legislation (e.g., the Budget Control Act of 2011) have significantly impacted the healthcare system, including increased drug rebates and Medicare payment cuts, with future reforms potentially further affecting company profitability[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) Intellectual Property - The company protects its technology through patents, trade secrets, and proprietary know-how; **molgramostim lacks patent protection for aPAP treatment**, relying primarily on **Orphan Drug exclusivity**, proprietary delivery devices, and proprietary cell banks[118](index=118&type=chunk)[228](index=228&type=chunk) - The company previously held patents for a proprietary vancomycin formulation, but with the **discontinuation of that project**, it may abandon related patent applications in the future[119](index=119&type=chunk)[233](index=233&type=chunk) - The patent application and maintenance process is complex and expensive, with risks of patents being challenged, invalidated, or circumvented; trade secret protection also faces risks of disclosure or independent discovery[231](index=231&type=chunk)[232](index=232&type=chunk)[234](index=234&type=chunk) Competition - The pharmaceutical industry is highly competitive, with the company facing rivals such as large pharmaceutical and biotechnology companies, specialty pharmaceutical companies, and academic institutions, which often possess **greater resources and experience**[124](index=124&type=chunk)[249](index=249&type=chunk) - Currently, **no other companies are developing inhaled GM-CSF**, but the injectable GM-CSF product **sargramostim (Leukine®)** is used off-label for aPAP, and its manufacturer has obtained aPAP Orphan Drug designation, potentially posing a competitive threat in Japan[125](index=125&type=chunk)[208](index=208&type=chunk) Employees and Human Capital - As of **March 8, 2021**, the company had **27 employees**, with **14 in Denmark and 13 in the U.S.** The company is committed to attracting and retaining highly skilled talent through competitive compensation, training, and a focus on diversity and inclusion[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[130](index=130&type=chunk) - During the **COVID-19 pandemic**, the company prioritized employee health and safety, implemented remote work, and enhanced internal communication[131](index=131&type=chunk) Merger and Corporate Information - Savara completed its business combination on **April 27, 2017**, through a reverse merger with Mast Therapeutics, Inc. The company's website provides SEC filings[132](index=132&type=chunk)[133](index=133&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors.) The company faces multiple risks in financing, product development, intellectual property, market competition, and regulatory compliance Summary Risk Factors - Key risks include: * **Ongoing losses and future financing needs** * Reliance on **molgramostim's clinical, regulatory, and commercial success** * Dependence on **third-party manufacturers and CROs** * Potential for **adverse side effects** from products * Challenges in **intellectual property protection** * **Intense market competition** * Uncertainties in **healthcare reform and reimbursement policies** * **Product liability risks and stock price volatility**[137](index=137&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) Risks Relating to Our Capital Requirements and Financial Condition - The company has incurred **continuous losses since inception**, with a **net loss of $49.6 million in 2020** and an **accumulated deficit of $257.5 million**; significant operating losses are expected in the coming years, requiring additional financing for molgramostim's clinical development and commercialization[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) Key Financial Data for 2020 and 2019 | Metric | 2020 (Million USD) | 2019 (Million USD) | | :--- | :--- | :--- | | Net Loss | (49.6) | (78.2) | | Cash Used in Operating Activities | (39.8) | (45.1) | | Cash, Cash Equivalents, and Short-Term Investments (Period End) | 82.2 | 121.8 | | Accumulated Deficit (Period End) | (257.5) | (207.9) | - The company's loan agreement contains restrictive covenants, where failure to meet specific milestones (e.g., first patient dosed in the IMPALA 2 trial) could trigger **immediate debt maturity or accelerated principal payments**[149](index=149&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk) - The company holds significant **in-process research and development (IPR&D) intangible assets**, which may be impaired in the future due to poor clinical trial results, unfavorable regulatory outcomes, or increased development costs, materially impacting financial condition; **goodwill was fully impaired in 2019**[153](index=153&type=chunk)[154](index=154&type=chunk) Risks Related to Our Business Strategy and Operations - The company's business is highly dependent on **molgramostim's clinical, regulatory, and commercial success**; the **IMPALA trial did not meet its primary endpoint**, and the FDA previously indicated insufficient data, though the new IMPALA 2 trial design has regulatory acceptance, clinical trial outcomes remain inherently uncertain[156](index=156&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[162](index=162&type=chunk) - The company's success relies on attracting and retaining **senior management and key scientific personnel**; the loss of key employees could delay product development and commercialization[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - The company is **entirely dependent on third parties for the manufacturing and supply of clinical trial drugs and delivery devices**; loss of a supplier or failure to provide adequate supply in a timely manner could severely harm the business; the company is seeking a **second molgramostim manufacturer**[170](index=170&type=chunk)[172](index=172&type=chunk) - The company heavily relies on **third parties (e.g., CRO Parexel)** for non-clinical testing and clinical trials; failure of third parties to satisfactorily perform contractual obligations or meet expected timelines could adversely affect molgramostim's development[177](index=177&type=chunk)[178](index=178&type=chunk)[180](index=180&type=chunk)[186](index=186&type=chunk) - **Molgramostim may cause adverse side effects or events**, potentially interrupting, delaying, or halting clinical development, regulatory approval, or commercialization[181](index=181&type=chunk) - The company may fail to achieve anticipated development goals within announced timeframes, potentially leading to **increased development costs or project termination**[183](index=183&type=chunk)[184](index=184&type=chunk) - Third-party computer system failures, cyberattacks, or cybersecurity flaws could lead to **business interruptions, data loss, or breaches**, adversely affecting company operations and financial results; remote work during the **COVID-19 pandemic** increased cybersecurity risks[188](index=188&type=chunk)[189](index=189&type=chunk) - Failure to comply with data protection laws and regulations (e.g., **GDPR and CCPA**) could result in government enforcement actions, **significant fines**, and negative publicity[192](index=192&type=chunk) - Natural disasters, war, system failures, terrorism, telecommunications and power outages, or other catastrophic events, as well as public health crises like **COVID-19**, could disrupt company operations and adversely affect financial results[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) - The company currently has **limited marketing capabilities and no sales organization**; inability to establish sales and marketing capabilities independently or through third parties will prevent successful product commercialization or revenue generation[196](index=196&type=chunk) - To establish sales and marketing infrastructure and expand manufacturing capacity, the company will need to **expand its organizational size**, potentially facing difficulties in managing growth[197](index=197&type=chunk)[198](index=198&type=chunk) Risks Related to Drug Development and Commercialization - The company relies on the successful completion of clinical trials for its molgramostim product candidate, but **positive past clinical trial results do not guarantee future success**; clinical trials are expensive, time-consuming, and uncertain, potentially delayed or failed by various factors[199](index=199&type=chunk)[200](index=200&type=chunk)[203](index=203&type=chunk)[205](index=205&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) - **Molgramostim has received FDA and European Orphan Drug designations**; if a competitor obtains Orphan Drug exclusivity for a product with the same active ingredient and delivery route, the company may be unable to sell its product until the competitor's exclusivity expires[204](index=204&type=chunk) - The **regulatory approval process involves significant uncertainty**, potentially requiring further testing and validation, and approvals may be subject to conditions, delays, or rejections, severely harming the company's business[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk) - Even if a product receives regulatory approval, if it fails to gain **widespread market acceptance** by the medical community, patients, or third-party payers, sales revenue will be limited, and the company may not achieve profitability[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) - Even with regulatory approval in the U.S., the company may be unable to obtain approval or commercialize products in other countries, which would **limit the full commercial potential** of its products[226](index=226&type=chunk) - The company must comply with the **U.S. Foreign Corrupt Practices Act** and similar foreign anti-corruption laws, with violations potentially leading to business disruptions[227](index=227&type=chunk) Risks Related to Our Intellectual Property - The company's success depends on obtaining and maintaining effective intellectual property protection for its main product candidates and proprietary technology; **molgramostim lacks patent protection for aPAP treatment**, relying primarily on **Orphan Drug exclusivity**[228](index=228&type=chunk) - Patent protection may be difficult to obtain, granted claims may be limited in scope, and patents may be **challenged, invalidated, or circumvented by competitors**[231](index=231&type=chunk)[237](index=237&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) - Obtaining and maintaining patent protection relies on compliance with various procedural, filing, and fee payment requirements of government patent agencies; non-compliance could lead to **reduced or lost patent rights**[242](index=242&type=chunk) - Third parties may claim the company's products infringe their proprietary rights and may challenge product use or patent rights through litigation or administrative proceedings; defending such actions can be **costly, time-consuming, and divert management's attention**[243](index=243&type=chunk)[244](index=244&type=chunk)[246](index=246&type=chunk) Risks Related to Our Industry - The biopharmaceutical industry in which the company operates is **highly competitive and rapidly changing**; even if approved, molgramostim will face competition and may be unable to successfully compete with larger pharmaceutical companies possessing **greater resources**[248](index=248&type=chunk)[249](index=249&type=chunk) - Healthcare reform measures and reimbursement policy uncertainties could hinder or prevent the commercial success of the company's products; **third-party payer challenges to drug prices and cost-effectiveness**, along with government cost control measures, could limit company revenue and profitability[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) - The company faces potential **product liability risks**; successful claims could result in substantial liability and may require limiting product commercialization; obtaining additional or increased product liability insurance in the future is uncertain[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) Risks Related to our Common Stock - The company's common stock price is expected to remain volatile, influenced by factors such as **clinical trial results, regulatory approvals, commercial success, financing capabilities, competition, intellectual property disputes, key personnel changes, and macroeconomic conditions**[257](index=257&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - If the company fails to meet all applicable Nasdaq continued listing requirements (including the **minimum $1.00 closing bid price requirement**), its common stock may be delisted, adversely affecting stock liquidity and market price[262](index=262&type=chunk)[263](index=263&type=chunk) - As a public company, the company will continue to incur **compliance costs and administrative requirements**, and does not anticipate paying cash dividends in the foreseeable future[264](index=264&type=chunk)[266](index=266&type=chunk) - Certain transactions completed by the company may result in an **ownership change under Section 382 of the Internal Revenue Code**, limiting the use of net operating loss carryforwards and other tax attributes[267](index=267&type=chunk) [Unresolved Staff Comments](index=47&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) The company currently has no unresolved comments from SEC staff - The company currently has **no unresolved comments from SEC staff**[268](index=268&type=chunk) [Properties](index=47&type=section&id=Item%202.%20Properties.) The company's headquarters are in Austin, Texas, with leased office space in Copenhagen, Denmark, and existing facilities are deemed adequate - The company's headquarters are in **Austin, Texas**, leasing approximately **6,151 square feet of office space** with a lease expiring in **July 2021**; additionally, the company leases office space in **Copenhagen, Denmark**, where approximately **50% of its employees** are based[269](index=269&type=chunk) - The company believes its existing facilities are **adequate for short-term use** and is confident that suitable alternative space can be obtained on commercially reasonable terms if needed in the future[270](index=270&type=chunk) [Legal Proceedings](index=47&type=section&id=Item%203.%20Legal%20Proceedings.) The company is not currently involved in any material pending litigation or other significant legal proceedings - The company is **not currently involved in any material pending litigation** or other significant legal proceedings; litigation could adversely affect the company due to defense and settlement costs and diversion of management resources[271](index=271&type=chunk) [Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable - This item is not applicable[272](index=272&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](index=48&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) The company's common stock trades on Nasdaq, with approximately 125 record holders as of March 8, 2021 - The company's common stock trades on the **Nasdaq Global Select Market** under the ticker symbol **“SVRA”**[274](index=274&type=chunk) - As of **March 8, 2021**, the company had approximately **125 record holders of common stock**, with the number of beneficial owners being significantly greater[274](index=274&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=49&type=section&id=Item%206.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) The company reports continuous losses and a substantial accumulated deficit, requiring significant future capital for its clinical development Overview - Savara Inc. is a company focused on rare lung diseases, with its main project, **molgramostim inhaled solution**, in **Phase III development** for autoimmune pulmonary alveolar proteinosis (aPAP)[278](index=278&type=chunk) - The company has been in a **loss position since inception**, with **no product revenue**; as of **December 31, 2020**, the **accumulated deficit was $257.5 million**[279](index=279&type=chunk)[280](index=280&type=chunk) Net Loss for 2020 and 2019 | Metric | 2020 (Million USD) | 2019 (Million USD) | | :--- | :--- | :--- | | Net Loss | (49.6) | (78.2) | - The company anticipates incurring **significant operating losses** for the foreseeable future, requiring substantial additional capital to fund operations[281](index=281&type=chunk)[282](index=282&type=chunk) Recent Events - On **March 5, 2021**, the company entered into a Master Services Agreement with Parexel, which will provide contract research services for the **IMPALA 2 clinical trial**, with estimated costs of approximately **$31 million**[283](index=283&type=chunk) - On **December 10, 2020**, the company announced the **Phase III trial for vancomycin hydrochloride inhalation powder did not meet its primary endpoint**, and on **January 7, 2021**, issued a termination notice to GlaxoSmithKline Trading Services Limited (GSK), with termination costs **less than $1 million**[284](index=284&type=chunk) - The **COVID-19 pandemic** has created uncertainty for aPAP patient populations and physicians, potentially delaying clinical trial enrollment and negatively impacting the company's supply chain and development timelines[285](index=285&type=chunk)[287](index=287&type=chunk) Income Taxes - The **CARES Act** provided several tax relief measures in response to the **COVID-19 pandemic**, including removing the 80% taxable income limitation for net operating losses (NOLs) and allowing NOLs to be carried back five years, but the company believes these measures have **no material impact on its tax reporting**[288](index=288&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk) Critical Accounting Policies and Estimates - The company makes **significant estimates and judgments** in preparing its financial statements, including research and development expense accruals, business combinations, impairment of goodwill and acquired in-process research and development (IPR&D), stock-based compensation expense, product revenue, milestone revenue, and income taxes[292](index=292&type=chunk) - Research and development expense accruals are based on estimated completion of services and agreed-upon fees from external service providers (e.g., CROs and CMOs); **goodwill and IPR&D are tested for impairment annually**, or more frequently if impairment indicators arise[293](index=293&type=chunk)[294](index=294&type=chunk)[296](index=296&type=chunk)[299](index=299&type=chunk) - Stock-based compensation expense is estimated based on fair value at the grant date and recognized over the vesting period; product revenue is recognized using the **five-step model under ASC 606**, and milestone revenue is recognized as variable consideration upon satisfaction of performance obligations[301](index=301&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk) Financial Operations Overview - **Research and development expenses** are the largest component of the company's operating expenses, primarily comprising fees under agreements with CROs, consultants, and clinical trial sites, laboratory and vendor fees, contract manufacturing expenses, and internal R&D costs[307](index=307&type=chunk) - **General and administrative (G&A) expenses** primarily include salaries and benefits for executive, finance, accounting, and legal personnel, as well as professional and consulting service fees[309](index=309&type=chunk) - **Other income (expense), net** includes amortization of capitalized debt issuance costs and debt discounts, net interest income and expense, foreign currency transaction gains and losses, tax credit income, and gains and losses from changes in the fair value of financial instruments[310](index=310&type=chunk) Results of Operations — Comparison of Years Ended December 31, 2020 and 2019 Results of Operations for 2020 and 2019 | Metric (Thousand USD) | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Milestone Revenue | 257 | — | 257 | | Research and Development Expenses | 35,038 | 38,781 | (3,743) | | General and Administrative Expenses | 14,264 | 13,081 | 1,183 | | Goodwill Impairment | — | 26,852 | (26,852) | | Depreciation | 255 | 311 | (56) | | Total Operating Expenses | 49,557 | 79,025 | (29,468) | | Operating Loss | (49,300) | (79,025) | 29,725 | | Other Income (Expense), Net | (315) | 852 | (1,167) | | Net Loss | (49,615) | (78,173) | 28,558 | - Research and development expenses **decreased by $3.7 million (9.7%)**, primarily due to the termination of non-aPAP trials (particularly the vancomycin program), partially offset by Apulmiq-related costs[312](index=312&type=chunk) - General and administrative expenses **increased by $1.2 million (9.0%)**, primarily due to higher stock-based compensation, increased insurance costs, and costs related to the resignation of the former CEO and CCO, partially offset by reduced commercial costs for molgramostim product candidates[313](index=313&type=chunk) - **Goodwill impairment expense of $26.9 million** was recognized in **2019**, with no such expense in 2020[314](index=314&type=chunk) - Other income (expense), net, shifted from **$0.9 million income in 2019 to $0.3 million expense in 2020**, primarily due to a **$1.4 million increase in net interest expense**, resulting from decreased investment income due to lower interest rates[315](index=315&type=chunk) Liquidity and Capital Resources - As of **December 31, 2020**, the company's cash, cash equivalents, and short-term investments totaled **$82.2 million**, with an **accumulated deficit of $257.5 million**; the company anticipates high future R&D expenses, requiring funding through additional equity issuance and potential borrowings[316](index=316&type=chunk)[335](index=335&type=chunk) - Debt Financing: * A loan and security agreement (as third amended) with Silicon Valley Bank provides **$25 million in term debt financing** * The third amendment extends the interest-only period for the loan until **June 30, 2022**, with principal and interest repaid in 18 equal monthly installments thereafter * If the company fails to initiate the molgramostim aPAP Phase III clinical trial by the end of **Q2 2021**, the interest-only period will end early, and principal plus interest will be repaid in 24 equal monthly installments starting **April 1, 2021** * The loan is secured by all company assets and includes restrictive covenants, requiring the company to receive at least **$25 million in gross cash proceeds** from warrant exercises or equity issuances by **June 30, 2021**[317](index=317&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk) - Equity Financing: * Through an at-the-market common stock sales agreement with H.C. Wainwright & Co., LLC, the company may periodically sell up to **$60 million of common stock**; **net proceeds of $2.3 million and $29.6 million** were received in **2020 and 2019**, respectively, through this agreement * A public offering completed in **July 2018** yielded **net proceeds of approximately $45.8 million** * A private placement (PIPE) completed in **December 2019** issued common stock and pre-funded warrants, generating **gross proceeds of approximately $26.8 million**, and issued milestone warrants with potential gross proceeds up to **$48.2 million**[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk)[327](index=327&type=chunk) Cash Flows for 2020 and 2019 | Cash Flow Category (Thousand USD) | 2020 | 2019 | | :--- | :--- | :--- | | Cash Used in Operating Activities | (39,836) | (45,123) | | Cash Provided by Investing Activities | 9,053 | 15,740 | | Cash Provided by Financing Activities | 3,689 | 54,908 | | Effect of Exchange Rate Changes | 170 | (22) | | Net Increase (Decrease) in Cash | (26,924) | 25,503 | | Cash and Cash Equivalents, End of Period | 22,880 | 49,804 | - The company anticipates requiring **substantial additional capital** in the foreseeable future to support ongoing clinical development and potential commercialization activities; failure to obtain timely financing could lead to delays, limitations, or termination of product development or commercialization efforts[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk) Manufacturing and Other Commitments and Contingencies - The company is obligated to pay **milestone payments and sales royalties** under agreements with molgramostim API and nebulizer manufacturers; as of **December 31, 2020**, total unmet or unoccurred milestone commitments amounted to **$8.432 million**[338](index=338&type=chunk)[447](index=447&type=chunk)[448](index=448&type=chunk)[450](index=450&type=chunk) Other Contracts - The company enters into service contracts with third parties for research, clinical trials, and testing in the ordinary course of business; these contracts typically provide for termination upon notice, so non-cancelable obligations are **not materially impactful**[339](index=339&type=chunk) Recent Accounting Pronouncements - The company has reviewed and adopted several recent accounting pronouncements, including **ASU 2018-13 (Fair Value Measurement), ASU 2018-18 (Collaborative Arrangements), ASU 2019-01 (Leases), and ASU 2019-08 (Stock-Based Compensation)**; these pronouncements have **no material impact on the company's consolidated financial statements**[340](index=340&type=chunk)[451](index=451&type=chunk)[452](index=452&type=chunk)[453](index=453&type=chunk)[455](index=455&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk.](index=57&type=section&id=Item%206A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company faces interest rate risk on cash and investments, and foreign exchange risk from Danish and Eurozone operations, mitigated by derivatives - The company faces **interest rate risk** related to cash, cash equivalents, and short-term investments, but does not expect a material impact; the investment portfolio primarily consists of **short-term, highly-rated fixed-income instruments**[341](index=341&type=chunk) - The company has operations in Denmark and uses **derivative instruments and short-term foreign currency forward contracts** to limit the impact of foreign exchange fluctuations; **no significant foreign exchange losses** were recognized in 2020 and 2019[342](index=342&type=chunk) - The company's loan agreement with Silicon Valley Bank carries **interest rate risk**, with the loan rate tied to the Wall Street Journal Prime Rate; a **10% change in interest rates** is not expected to materially impact the investment portfolio value or interest expense[343](index=343&type=chunk) - The company believes **inflation did not have a material impact** on its results of operations during the reported periods[344](index=344&type=chunk) [Financial Statements and Supplementary Data.](index=57&type=section&id=Item%207.%20Financial%20Statements%20and%20Supplementary%20Data.) The required consolidated financial statements and supplementary information are submitted as exhibits to this report - The consolidated financial statements and supplementary financial information required by this item are submitted as exhibits to this report[345](index=345&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.](index=57&type=section&id=Item%208.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) The company has experienced no changes in accountants or disagreements with accountants on accounting and financial disclosure - The company has experienced **no changes in accountants** or disagreements with accountants on accounting and financial disclosure[346](index=346&type=chunk) [Controls and Procedures.](index=58&type=section&id=Item%208A.%20Controls%20and%20Procedures.) Management assessed disclosure controls and internal control over financial reporting as effective, with no independent audit required - As of **December 31, 2020**, the company's Chief Executive Officer and Chief Financial Officer evaluated and concluded that its **disclosure controls and procedures were effective**[347](index=347&type=chunk) - Management assessed and concluded that the company's **internal control over financial reporting was effective** as of **December 31, 2020**[348](index=348&type=chunk) - As a smaller reporting company, the company is **not required to have an independent audit** of the effectiveness of its internal control over financial reporting[349](index=349&type=chunk) - There were **no material changes** in the company's internal control over financial reporting during the fourth quarter of 2020[350](index=350&type=chunk) [Other Information.](index=58&type=section&id=Item%208B.%20Other%20Information.) This item is not applicable - This item is not applicable[351](index=351&type=chunk) PART III [Directors, Executive Officers and Corporate Governance.](index=59&type=section&id=Item%209.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance.) The company has adopted a code of ethics, with other required information incorporated by reference from the proxy statement - The company has adopted a **code of ethics** applicable to all executive officers, directors, and employees, published on its website[355](index=355&type=chunk) - The other information required by this item will be incorporated by reference from the proxy statement[356](index=356&type=chunk) [Executive Compensation.](index=59&type=section&id=Item%2010.%20Executive%20Compensation.) The information required by this item will be incorporated by reference from the proxy statement - The information required by this item will be incorporated by reference from the proxy statement[357](index=357&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.](index=59&type=section&id=Item%2011.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) The information required by this item will be incorporated by reference from the proxy statement - The information required by this item will be incorporated by reference from the proxy statement[358](index=358&type=chunk) [Certain Relationships and Related Transactions, and Director Independence.](index=59&type=section&id=Item%2012.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence.) The information required by this item will be incorporated by reference from the proxy statement - The information required by this item will be incorporated by reference from the proxy statement[359](index=359&type=chunk) [Principal Accounting Fees and Services.](index=59&type=section&id=Item%2013.%20Principal%20Accounting%20Fees%20and%20Services.) The information required by this item will be incorporated by reference from the proxy statement - The information required by this item will be incorporated by reference from the proxy statement[360](index=360&type=chunk) PART IV [Exhibits, Financial Statement Schedules.](index=60&type=section&id=Item%2014.%20Exhibits%2C%20Financial%20Statement%20Schedules.) This report's exhibits include the independent auditor's report and consolidated financial statements, with all schedules omitted as inapplicable - The following documents are included as exhibits to this report: * Report of Independent Registered Public Accounting Firm * Consolidated Balance Sheets as of **December 31, 2020 and 2019** * Consolidated Statements of Operations and Comprehensive Loss for the years ended **December 31, 2020 and 2019** * Consolidated Statements of Stockholders’ Equity for the years ended **December 31, 2020 and 2019** * Consolidated Statements of Cash Flows for the years ended **December 31, 2020 and 2019** * Notes to Consolidated Financial Statements[363](index=363&type=chunk)[366](index=366&type=chunk) - All financial statement schedules have been omitted because they are **not applicable** or the required information is presented in the financial statements or notes thereto[364](index=364&type=chunk) [Form 10-K Summary.](index=60&type=section&id=Item%2015.%20Form%2010-K%20Summary.) This item is not applicable - This item is not applicable[365](index=365&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-32157 Savara Inc. (Exact name of registrant as specified in its charter) Delaware 84-1318182 (State or other jurisdiction of ...

Savara Inc (NASDAQ:SVRA) Q2 2020 Results Conference Call August 6, 2020 4:30 PM ET Company Participants Anne Erickson - Head Investor Relations Robert Neville - Chief Executive Officer Badrul Chowdhury - Chief Medical Officer Taneli Jouhikainen - President and Chief Business Officer David Lowrance - Chief Financial Officer Operator Welcome to the Savara conference call. At this time, all participants are in a listen-only mode. An audio webcast of this call will be available on the Investors section of Sava ...

Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the transition period from to Commission File Number 001-32157 Savara Inc. (Exact name of registrant as specified in its charter) Delaware 84-1318182 (State or other jurisdiction of inco ...

Savara Inc. (NASDAQ:SVRA) Q1 2020 Earnings Conference Call May 7, 2020 4:30 PM ET Company Participants Anne Erickson - VP, IR and Corporate Communications Rob Neville - CEO Badrul Chowdhury - Chief Medical Officer Dave Lowrance - CFO Taneli Jouhikainen - COO Conference Call Participants Edward Marks - Ladenburg Thalmann Suji Jeong - Jefferies Liisa Bayko - JMP Securities Operator Good day and welcome to the Savara conference call. At this time, all participants are in a listen-only mode. An audio webcast of ...