Financial Performance - The company generated net income of $5.3 million for the year ended December 31, 2022, primarily from revenues related to AstraZeneca's sales of Vaxzevria [80]. - For the three months ended March 31, 2023, the company incurred a net loss of $18.2 million, with an accumulated deficit of $121.4 million as of that date [80]. - Revenue for the three months ending March 31, 2023, was $0.5 million, a significant decrease from $15.0 million for the same period in 2022 [77]. - Revenue for the three months ended March 31, 2023, was $0.5 million, a decrease of 97% from $15.0 million in the same period of 2022, primarily due to lower sales from the OUI License Agreement [126]. - Total operating expenses for the three months ended March 31, 2023, were $21.9 million, an increase of 53% from $14.4 million in the same period of 2022 [128]. - Net loss for the three months ended March 31, 2023, was $18.2 million, compared to a net income of $2.6 million in the same period of 2022, representing a change of $20.8 million [128]. - Interest income for the three months ended March 31, 2023, was $1.6 million, compared to less than $0.1 million in the same period of 2022 [133]. - Cash and cash equivalents as of March 31, 2023, were $191.3 million, with total gross proceeds from share issuances amounting to approximately $327.3 million since inception [136]. - Net cash used in operating activities for the three months ended March 31, 2023, was $3.2 million, an improvement from $6.6 million used in the same period of 2022 [140]. - The company expects to continue incurring significant losses and negative cash flows from operations for the foreseeable future, with an accumulated deficit of $121.4 million as of March 31, 2023 [146]. - The company anticipates substantial future funding requirements to support ongoing clinical development and operational activities [149]. - The company expects existing cash and cash equivalents to fund operating expenses and capital expenditures into Q1 2025 [155]. - A 10% weakening of the US dollar against the pound sterling would increase expenses by approximately $2.2 million for Q1 2023, compared to $1.4 million in Q1 2022 [166]. - The company had cash and cash equivalents of $191.3 million as of March 31, 2023 [167]. Research and Development - The company completed the HBV002 phase 2 clinical trial for VTP-300, which included 55 patients, showing sustained reductions in Hepatitis B surface antigen (HBsAg) [87]. - VTP-200's phase 1b/2 clinical trial data indicated that 26 of 29 women showed antigen-specific T cell responses, with an average response greater than 1,000 spot-forming units per million [90]. - The company has a broad pipeline including therapeutic programs for chronic hepatitis B, HPV, prostate cancer, and non-small cell lung cancer, as well as prophylactic programs for herpes zoster and MERS [75]. - The company has initiated clinical trials for VTP-200, VTP-300, VTP-600, and VTP-850, while preparing VTP-500, VTP-1000, and VTP-1100 for clinical trials [100]. - Research and development expenses are expected to increase in the future, with significant costs related to personnel, clinical trials, and manufacturing activities [100]. - Research and development expenses for the three months ended March 31, 2023, were $9.8 million, a decrease of 8% from $10.7 million in the same period of 2022 [128]. General and Administrative Expenses - The company expects general and administrative expenses to rise as it expands operations in the UK and the US, including costs related to compliance and investor relations [100]. - General and administrative expenses for the three months ended March 31, 2023, were $12.1 million, significantly higher than $3.7 million in the same period of 2022, primarily due to increased personnel expenses and foreign exchange losses [131]. Acquisitions and Goodwill - The acquisition of Avidea on December 10, 2021, was for an upfront amount of $32.8 million, with potential additional payments of up to $40.0 million based on milestone achievements [121]. - Goodwill of $12.2 million recognized as of March 31, 2023, relates entirely to the acquisition of Avidea, with no impairment losses recognized during the period [124]. - The company has recognized a change in fair value related to contingent consideration from the acquisition of Avidea, reflecting the probability of success of technology and clinical milestones [100]. Future Funding and Financial Risks - The company expects to incur net operating losses for at least the next several years as it advances product candidates through clinical development and seeks regulatory approval [80]. - The company may need to raise additional funds through equity offerings, debt financings, or collaborations to meet operational needs [154]. - Future capital requirements may depend on successful clinical trials and the ability to attract and retain scientific personnel [151]. - The company faces risks related to fluctuations in foreign currency exchange rates, particularly with the euro, pound sterling, Swiss franc, and Australian dollar [164]. - The company has contingent payment obligations tied to clinical, regulatory, and commercial milestones, but the amounts and timing are uncertain as of March 31, 2023 [159]. - The company is exposed to changes in interest rates but currently has no significant interest-bearing liabilities [167]. Tax and Regulatory Considerations - The company benefits from the UK government's R&D tax relief programs, allowing for cash rebates of up to 33.35% on qualifying expenditures [105]. - The additional deduction under the SME program will decrease from 130% to 86% starting April 2023, and the SME credit rate will reduce from 14.5% to 10% [107]. Operational Considerations - The company has no operations or suppliers based in Ukraine, Belarus, or Russia, thus assessing the impact of the Ukraine crisis as minimal [92]. - The company may need to establish sales and marketing teams to commercialize products once marketing approvals are obtained [150]. - Interest income primarily comes from short-term cash deposits held in US dollars [101]. - Share-based compensation for the three months ended March 31, 2023, included 1,987,289 share options granted, with expected volatility at 97.4% [118].
VACCITECH(VACC) - 2023 Q1 - Quarterly Report