InflaRx N.V.(IFRX) - 2024 Q2 - Quarterly Report

Unaudited Condensed Consolidated Financial Statements Statements of Operations and Comprehensive Loss The company's Q1 2024 net loss improved to €9.7 million, driven by lower R&D costs and a positive financial result Q1 2024 vs. Q1 2023 Operating Results (€ thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenues | 36 | 0 | | Research and development expenses | (7,302) | (14,732) | | Operating result | (12,489) | (10,595) | | Income (loss) for the period | (9,657) | (11,084) | | Income (loss) per share (basic/diluted) | (€0.17) | (€0.25) | - Research and development expenses decreased by €7.4 million year-over-year, mainly because high third-party expenses for developing the commercial manufacturing process for GOHIBIC were incurred in Q1 2023[20] - The net financial result improved to a gain of €2.8 million from a loss of €0.5 million in Q1 2023, largely due to a €3.0 million increase in the foreign exchange result and higher interest income[21] Statements of Financial Position Total assets decreased to €107.1 million while cash nearly doubled, reflecting a shift from financial assets to cash Financial Position (€ thousands) | Metric | Mar 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | 107,095 | 120,209 | | Cash and cash equivalents | 25,103 | 12,768 | | Total Equity | 94,760 | 102,582 | | Total Liabilities | 12,336 | 17,627 | - The decrease in total assets is primarily linked to a €25.3 million reduction in current and non-current financial assets, which were subsequently reinvested into cash and cash equivalents[28][30] - Total liabilities decreased significantly, driven by a €7.1 million reduction in trade and other payables, which were high at year-end 2023 due to manufacturing costs for commercial products[28] Statements of Changes in Shareholders' Equity Shareholders' equity decreased by €7.8 million to €94.8 million, mainly due to the period's net loss Reconciliation of Shareholders' Equity for Q1 2024 (€ thousands) | Description | Amount | | :--- | :--- | | Balance as of January 1, 2024 | 102,582 | | Loss for the period | (9,657) | | Other comprehensive loss | (26) | | Equity-settled share-based payments | 1,861 | | Balance as of March 31, 2024 | 94,760 | - In Q1 2023, equity was also impacted by the exercise of 71,234 share options, which did not occur in Q1 2024[10] Statements of Cash Flows Net cash increased by €12.0 million, as positive investing cash flow offset negative operating cash flow Cash Flow Summary for Q1 (€ thousands) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | (14,868) | (10,516) | | Net cash from/(used in) investing activities | 26,945 | (3,586) | | Net cash from/(used in) financing activities | (86) | 30 | | Net increase/(decrease) in cash | 11,991 | (14,072) | - The positive cash flow from investing activities was primarily due to receiving €30.5 million from the maturity of financial assets, which significantly outweighed purchases of new assets[12] - The increase in cash used in operating activities was influenced by a €4.4 million outflow for trade and other payables[12] Notes to the Unaudited Condensed Consolidated Financial Statements This section details GOHIBIC's first revenues, R&D cost changes, and other key financial statement disclosures 1. Summary of significant accounting policies and other disclosures The company focuses on anti-C5a/C5aR inhibitors, with GOHIBIC receiving EUA for COVID-19 treatment - The company's focus is on its proprietary anti-C5a and C5aR technologies to discover, develop and commercialize inhibitors of the complement activation factor C5a[15] - GOHIBIC (vilobelimab) received an Emergency Use Authorization (EUA) from the U.S. FDA on April 4, 2023, for treating critically ill, invasively mechanically ventilated adult COVID-19 patients[15] - The financial statements are prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the 2023 annual report on Form 20-F[16] 2. Revenues The company recognized its first-ever revenues of €36,037 in Q1 2024 from GOHIBIC sales in the U.S Revenues by Period | Period | Revenues (€) | | :--- | :--- | | Q1 2024 | 36,037 | | Q1 2023 | 0 | - All revenues are from GOHIBIC product sales in the United States to end customers (hospitals); sales to distributors are not recognized as revenue under IFRS 15[18] 3. Cost of Sales Q1 2024 cost of sales was €220,521, primarily from write-downs of expiring inventory - Cost of sales in Q1 2024 amounted to €220,521, mainly due to write-downs of inventories nearing their expiration date[19] 4. Research and development expenses R&D expenses decreased by €7.4 million year-over-year due to lower one-time GOHIBIC manufacturing costs - R&D expenses fell to €7.3 million in Q1 2024 from €14.7 million in Q1 2023[5][20] - The decrease is primarily due to high third-party expenses in Q1 2023 for the GOHIBIC commercial manufacturing process and EUA efforts[20] 5. Other income Other income dropped by €7.7 million year-over-year following the conclusion of a government grant Other Income Breakdown | Income Source | Q1 2024 (€) | Q1 2023 (€) | | :--- | :--- | :--- | | Income from government grants | 0 | 7,734,855 | | Other | 36,323 | 11,334 | | Total | 36,323 | 7,746,189 | - The significant drop in other income is due to the end of the government grant period on June 30, 2023[20] 6. Net financial result The net financial result improved by €3.3 million to a €2.8 million gain, driven by foreign exchange gains Net Financial Result Breakdown (€ thousands) | Financial Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Finance Result | 904 | 451 | | Foreign exchange result | 1,824 | (1,137) | | Other financial result | 103 | 198 | | Net financial result | 2,831 | (489) | - The improvement is mainly attributable to a €0.5 million increase in interest income and a €3.0 million increase in the foreign exchange result[21] 7. Inventory Total inventory value decreased slightly to €11.0 million after a €0.2 million write-down for expected expiry Inventory Breakdown (€ thousands) | Inventory Type | Mar 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Raw material and supplies | 424 | 424 | | Unfinished goods | 10,516 | 10,614 | | Finished goods | 110 | 330 | | Total | 11,049 | 11,368 | - Total inventory write-downs amounted to €0.7 million as of March 31, 2024, with €0.2 million recorded in Q1 2024 due to expected expiry[22] 8. Other assets Other assets increased to €6.1 million, driven by higher prepayments for R&D and D&O insurance - Prepayments on research and development projects increased to €4.1 million as of March 31, 2024, from €3.7 million as of December 31, 2023, mainly for clinical contracts related to INF904[24] - Prepaid expenses mainly consist of prepaid D&O insurance expense for the year 2024[24] 9. Tax receivable The tax receivable balance decreased to €2.1 million following the receipt of prior-period VAT refunds - Tax receivable decreased by €1.7 million to €2.1 million due to the receipt of VAT refunds for Q2 2023 and Q3 2023[25] 10. Financial assets and financial liabilities Financial assets decreased as funds moved to cash, while payables fell and first trade receivables were recorded - Financial assets (current and non-current) decreased by €25.3 million, as matured assets were moved to cash and cash equivalents[28] - Trade and other payables decreased by €7.1 million as high payables from CDMOs related to commercial product manufacturing were settled[28] - The company recorded its first trade receivables of €35,242 from GOHIBIC product deliveries[28] 11. Other liabilities Other liabilities of €2.9 million primarily consist of payments from a distributor held as a liability - The company holds a liability to its commercial partner of €2.8 million, related to payments received for GOHIBIC product shipments from its U.S. distributor, Cencora[28][29] - In accordance with IFRS 15, revenue is recognized only when control of the products is transferred to the end customer (hospital), at which point this liability is reduced[29] - In April 2024, the Company agreed with Cencora to repay the amount for product shipments transferred in September 2023[29] 12. Cash and cash equivalents Cash and cash equivalents increased by €12.3 million to €25.1 million due to reinvestment of matured financial assets Cash and Cash Equivalents Breakdown (€ thousands) | Category | Mar 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Short-term deposits | 18,297 | 5,141 | | Cash at banks | 6,806 | 7,627 | | Total | 25,103 | 12,768 | - The €12.3 million increase is mainly due to the maturity of financial assets and their subsequent reinvestment into interest-bearing bank deposits[30] 13. Share-based payments Share-based payment expenses rose to €1.8 million in Q1 2024, with 2.3 million new options granted - Share-based payment expense recognized in Q1 2024 was €1.8 million, compared to €1.2 million in Q1 2023[37] - A total of 2,275,000 share options were granted during Q1 2024 under the 2017 LTIP[34][35] - No share options were exercised in Q1 2024, whereas 56,304 were exercised in Q1 2023, generating proceeds of €98 thousand in the prior year period[38] 14. Protective foundation The company utilizes a protective foundation with a call option as an anti-takeover defense mechanism - The company has a protective foundation under Dutch law as an anti-takeover measure[40] - The foundation can exercise a call option to be issued preferred shares up to 100% of the Company's issued capital held by others (minus one share) to deter acquisition bids[40]