Barinthus(BRNS) - 2022 Q2 - Quarterly Report

Financial Performance - The company reported a net income of $18.3 million for the six months ended June 30, 2022, compared to a net loss of $31.4 million for the same period in 2021[104]. - The company generated a net income of $18.3 million and used $15.0 million in cash for operating activities during the six months ended June 30, 2022, compared to a net loss of $31.4 million and cash usage of $22.6 million in the same period of 2021[189]. - Net income for the three months ended June 30, 2022, was $15.7 million, an increase of $31.7 million compared to a net loss of $16.0 million in the same period of 2021[214]. - For the six months ended June 30, 2022, revenue was $32.1 million, significantly higher than $0.25 million in the same period of 2021[226]. - Revenue for the three months ended June 30, 2022, was $17.1 million, primarily from the OUI License Agreement Amendment related to Vaxzevria sales, compared to $0.035 million in the same period of 2021[215]. Cash Flow and Financial Position - As of June 30, 2022, the company had an accumulated deficit of $90.3 million and $192.3 million in cash and cash equivalents, primarily due to equity issuance and the IPO in 2021[189]. - The company anticipates that its cash balance as of June 30, 2022, will fund its operating expenses into the fourth quarter of 2024[107]. - Net cash used in operating activities for the six months ended June 30, 2022, was $14.97 million, compared to $22.59 million in 2021, indicating improved cash flow management[245]. - Cash used in investing activities for the six months ended June 30, 2022, was $3.1 million, primarily for capital expenditures related to new headquarters[248]. - Cash provided by financing activities was $224.1 million for the six months ended June 30, 2021, while cash used in financing activities was $0.2 million in 2022 due to debt repayment[249]. Research and Development - The company has a broad pipeline including VTP-300 for chronic hepatitis B, VTP-200 for HPV, and VTP-850 for prostate cancer, among others[99]. - The HBV001 Phase 1 clinical trial for VTP-300 has completed treatment and follow-up with no serious adverse events reported[109]. - The company is conducting a Phase 1b/2a clinical trial (HBV002) to evaluate the safety and reactogenicity of VTP-300, with enrollment completed in May 2022[111]. - The company expects to continue incurring net operating losses for at least the next several years as it advances its product candidates through clinical development[104]. - Research and development expenses are expected to increase as the company continues to advance its clinical programs, including VTP-200, VTP-300, and VTP-600[169]. Clinical Trials and Product Development - The interim analysis from the HBV002 Phase 1b/2a study suggests that VTP-300 could potentially lead to a functional cure for HBV, with plans to initiate HBV003 Phase 2b clinical trial in Q4 2022[120]. - The updated interim analysis of the HBV002 study included 39 patients, showing meaningful and durable reductions in HBsAg, particularly in patients with lower baseline HBsAg levels, with no treatment-related serious adverse events reported[121]. - Enrollment for the HBV002 study is complete with a total of 55 patients, and an updated interim analysis for all patients at the six-month follow-up is expected by the end of 2022[121]. - The company plans to open a Phase 2b clinical trial of VTP-300 to explore optimal dosing regimens, including a trial with a lead-in of Arbutus siRNA Ab729, with a planned enrollment of 20 patients per arm[122]. - The Phase 1b/2 clinical trial of VTP-200 is ongoing, with initial data expected in Q1 2023 after 60 patients reach the six-month evaluation timepoint[123]. Operational Challenges - The impact of COVID-19 has caused delays in clinical trials and recruitment, particularly for VTP-200 and VTP-300 programs[159][160]. - The ongoing COVID-19 pandemic has significantly impacted clinical trial activities and supply chains, affecting the company's operations[157]. - The company has assessed the impact of the Ukraine crisis as minimal, with no operations or suppliers based in affected regions[164]. Expenses and Losses - General and administrative expenses are anticipated to rise as the company expands operations in the UK and US, preparing for potential commercialization of product candidates[172]. - The company has not generated revenue from direct product sales and does not expect to do so in the near future[165]. - The company expects to incur additional losses in the future related to research and development activities and general administrative expenses, with the ability to continue as a going concern dependent on raising additional capital[187]. - The company has experienced recurring losses since inception and anticipates that without sufficient financing, it may need to delay or reduce research and development programs[189]. Acquisitions and Collaborations - The acquisition of Avidea was completed for an upfront amount of $33.3 million, including $12.2 million in cash and $21.1 million in American Depositary Shares, with potential additional payments of up to $40 million based on milestone achievements[209]. - The company recognizes revenue from contracts with customers based on the achievement of performance obligations, with approximately 24% of payments from AstraZeneca under the OUI License Agreement being allocated to the company[194][195]. Currency and Interest Rate Risks - The company is exposed to foreign currency exchange rate fluctuations, particularly with the euro, pound sterling, and Australian dollar[268]. - The functional currency for the company's UK subsidiaries is the pound sterling, while its US subsidiary uses the US dollar[268]. - The company currently has no significant interest-bearing liabilities, indicating low exposure to interest rate market risk[270]. - A hypothetical 10% change in interest rates would not materially impact the company's financial statements[270].