LAVA Therapeutics(LVTX) - 2024 Q3 - Quarterly Report

Unaudited Condensed Consolidated Interim Financial Statements Condensed Consolidated Interim Statements of Loss and Comprehensive Loss LAVA Therapeutics significantly narrowed its net loss for the nine months ended September 30, 2024, driven by reduced operating expenses despite stable revenue Statement of Loss Summary (Nine Months Ended September 30) | Financial Metric (in thousands) | 2024 | 2023 | Change (YoY) | | :------------------------------ | :--------- | :--------- | :------------------------------------------------------------------------------------------------------- | | Revenue | $6,992 | $6,416 | Increased, primarily from a $7.0M milestone payment from Pfizer | | Gross Profit | $6,992 | $3,088 | Increased significantly due to revenue mix and lower cost of sales | | Research and Development | ($20,844) | ($30,454) | Decreased, reflecting lower clinical trial and personnel-related expenses | | General and Administrative | ($8,745) | ($10,445) | Decreased, due to lower professional fees and share-based compensation | | Operating Loss | ($22,597) | ($37,811) | Narrowed due to reduced operating expenses | | Loss for the period | ($21,144) | ($35,476) | Narrowed significantly | | Loss per share (basic & diluted) | ($0.79) | ($1.35) | Improved due to lower net loss | Condensed Consolidated Interim Statements of Financial Position Total assets and equity decreased as of September 30, 2024, primarily due to a reduction in cash and accumulated net losses from operations Financial Position Summary (in thousands) | Account | Sep 30, 2024 | Dec 31, 2023 | | :---------------------------- | :----------- | :----------- | | Assets | | | | Cash and cash equivalents | $26,963 | $44,231 | | Investments | $51,921 | $51,340 | | Total Current Assets | $81,538 | $98,897 | | Total Assets | $83,357 | $101,710 | | Liabilities & Equity | | | | Deferred revenue (Non-current) | $35,000 | $35,000 | | Total Liabilities | $50,364 | $50,532 | | Total Equity | $32,993 | $51,178 | | Total Equity & Liabilities| $83,357 | $101,710 | Condensed Consolidated Interim Statements of Changes in Equity Total equity decreased significantly from January 1 to September 30, 2024, primarily due to the net loss for the period Changes in Equity for the Nine Months Ended September 30, 2024 (in thousands) | Description | Amount | | :--------------------------------- | :--------- | | Balance at January 1, 2024 | $51,178 | | Loss for the period | ($21,144) | | Share-based compensation expense | $2,636 | | Other adjustments (options, FX) | $323 | | Balance at September 30, 2024 | $32,993| Condensed Consolidated Interim Statements of Cash Flows Net cash used in operating activities significantly improved for the nine months ended September 30, 2024, with cash and equivalents decreasing overall Cash Flow Summary (Nine Months Ended September 30, in thousands) | Cash Flow Activity | 2024 | 2023 | | :------------------------ | :---------- | :---------- | | Net cash used in operating| ($18,139) | ($28,507) | | Net cash from (used in) investing | $1,504 | ($8,948) | | Net cash used in financing| ($363) | ($736) | | Net decrease in cash | ($16,998) | ($38,191) | | Cash at end of period | $26,963 | $62,663 | Notes to the Condensed Consolidated Interim Financial Statements These notes provide critical details on the company's accounting policies, financial position, and significant events, including its going concern status and post-period developments Note 1—General Information LAVA Therapeutics is a clinical-stage immuno-oncology company transitioning to a U.S. domestic filer in 2025 - The company is a clinical-stage immuno-oncology firm focused on its Gammabody® platform to develop bispecific gamma-delta T cell engagers for cancer treatment[65] - Effective January 1, 2025, the company will transition to a U.S. domestic filer and will prepare its financial statements in accordance with U.S. GAAP, filing future annual reports on Form 10-K[20] Note 2—Summary of Significant Accounting Policies The company's interim financial statements are prepared under IAS 34, with an immaterial revision made to cash flow presentation - The company identified and revised an immaterial misstatement in the presentation of its condensed consolidated interim statements of cash flows related to accrued interest on the RVO debt agreement[10][24] - The correction reclassified accrued interest from a cash inflow from financing activities to a non-cash adjustment in operating activities, and the company concluded the revision was not material to any prior period[41][42] Note 3—Material Accounting Judgments, Estimates and Assumptions The company maintains sufficient liquidity for at least 12 months, with critical accounting judgments impacting revenue and expense recognition - The company expects its cash, cash equivalents, and investments of $78.9 million as of September 30, 2024, will be sufficient to fund operations for at least the next 12 months, supporting the going-concern basis of the financial statements[44] - Critical judgments in applying accounting policies significantly affect amounts recognized for revenue recognition, share-based payments, clinical trial expense accruals, and lease accounting[82] Note 4—Equity As of September 30, 2024, the company's share capital consisted of 26,298,665 issued and outstanding common shares, each with a nominal value of $0.14 - As of September 30, 2024, LAVA Therapeutics N.V. had 26,298,665 common shares issued and outstanding[84] Note 5—Revenue and cost of sales Revenue is primarily derived from collaboration agreements, with a significant milestone payment recognized from Pfizer in March 2024 - In March 2024, Pfizer achieved a clinical development milestone for EGFRd2 (PF-08046052), triggering a $7.0 million milestone payment to the company, which was recognized as revenue[57] Revenue from Contracts with Customers (Nine Months Ended Sep 30, in thousands) | Source | 2024 | 2023 | | :----------------------------------- | :------ | :------ | | Pfizer Inc. - Milestones | $6,960 | $0 | | Pfizer Inc. - Other activities | $24 | $3,422 | | Pfizer Inc. - Additional services | $8 | $504 | | Johnson & Johnson Agreement - Milestones | $0 | $2,490 | | Total Revenue | $6,992 | $6,416 | Note 6—Research and Development Expenses Research and development expenses decreased significantly for the nine months ended September 30, 2024, driven by lower pre-clinical and clinical trial costs R&D Expense Breakdown (Nine Months Ended Sep 30, in thousands) | Expense Category | 2024 | 2023 | | :----------------------------------- | :---------- | :---------- | | Pre-clinical and clinical trial | $12,836 | $20,542 | | Personnel-related | $3,830 | $5,346 | | Facilities and other | $2,024 | $1,297 | | Share-based compensation | $962 | $1,427 | | Other | $1,192 | $1,842 | | Total R&D Expenses | $20,844 | $30,454 | Note 7—General and Administrative Expenses General and administrative expenses decreased for the nine months ended September 30, 2024, primarily due to reduced professional fees and share-based compensation G&A Expense Breakdown (Nine Months Ended Sep 30, in thousands) | Expense Category | 2024 | 2023 | | :----------------------------------- | :--------- | :---------- | | Personnel-related | $2,937 | $2,932 | | Professional and consultant fees | $2,356 | $2,667 | | Insurance, facilities, and other | $1,778 | $2,159 | | Share-based compensation | $1,674 | $2,687 | | Total G&A Expenses | $8,745 | $10,445 | Note 8—Share-based Awards The company recognized $2.6 million in share-based compensation expense, with a significant number of stock options outstanding and remaining unrecognized compensation - As of September 30, 2024, there were 6,584,726 stock options outstanding, with 3,592,462 vested and exercisable[92] - The unrecognized remaining stock-based compensation balance was approximately $2.4 million as of September 30, 2024, which is expected to be recognized over a weighted-average period of 0.79 years[95] Note 9—Investments The company's investments consist of U.S. Treasury securities with maturities of three to six months, classified as held-to-maturity and recorded at amortized cost - Investments consist of U.S. Treasury securities classified as held-to-maturity, with a carrying value of $51.9 million at September 30, 2024[96] Note 10–Subsequent Events Significant subsequent events include a $5.0 million milestone payment from J&J, a debt settlement with RVO, and the discontinuation of the LAVA-1207 clinical trial - In October 2024, a $5.0 million milestone payment from J&J was triggered following a Phase 1 clinical trial filing with health authorities[116] - In December 2024, the company discontinued the LAVA-1207 clinical trial after determining that signs of activity did not meet internal benchmarks[98] - In October 2024, the RVO required a payment of $0.6 million, with the remaining $5.2 million balance being conditionally waived for one year[97]