Financial Performance - For the six months ended June 30, 2023, the company incurred a net loss of $42.0 million, with an accumulated deficit of $145.2 million[81]. - The company recognized $0.3 million and $0.8 million in revenue for the three and six months ended June 30, 2023, respectively, compared to $17.1 million and $32.1 million for the same periods in 2022[79]. - Revenue for the three and six months ending June 30, 2023, was $0.3 million and $0.8 million, respectively, compared to $17.1 million and $32.1 million for the same periods in 2022, indicating a significant decline in revenue[104]. - The net loss for the three months ended June 30, 2023, was $23.8 million, compared to a net income of $15.7 million for the same period in 2022, representing a decrease of $39.5 million[133]. - For the six months ended June 30, 2023, revenue was $0.8 million, a significant decrease of $31.3 million from $32.1 million in the same period of 2022[145]. Operating Expenses - Total operating expenses for the three months ended June 30, 2023, were $26.7 million, an increase of $22.8 million compared to $3.8 million in the same period of 2022[133]. - Total operating expenses for the six months ended June 30, 2023, were $48.6 million, an increase of $30.4 million compared to $18.3 million in the same period of 2022[144]. - Research and development expenses for the three months ended June 30, 2023, were $13.5 million, up from $9.7 million in the same period of 2022, reflecting an increase of $3.8 million[136]. - Research and development expenses for the six months ended June 30, 2023, were $23.4 million, an increase of 14.4% from $20.4 million in the same period of 2022[147]. - General and administrative expenses for the six months ended June 30, 2023, were $25.3 million, compared to a gain of $2.2 million in 2022, largely due to a foreign exchange loss of $7.7 million[150][151]. Cash Flow and Funding - As of June 30, 2023, the company had cash and cash equivalents of $173.0 million, with gross proceeds from share issuances totaling approximately $329.0 million since inception[155]. - Net cash used in operating activities was $20.1 million for the six months ended June 30, 2023, compared to $15.0 million in 2022[160][161]. - The company anticipates continued significant losses and negative cash flows from operations for the foreseeable future, with an accumulated deficit of $145.2 million as of June 30, 2023[165]. - Future funding requirements will be substantial to support ongoing research, development, and commercialization efforts, with potential needs for additional financing[167][168]. - The company expects its existing cash and cash equivalents to fund operating expenses and capital expenditures into Q2 2025[172]. 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[77]. - VTP-200 showed a response in 26 of 29 women receiving varying doses, with an average of over 1,000 spot-forming units per million peripheral blood mononuclear cells[85]. - VTP-300 demonstrated durable reductions in Hepatitis B Surface Antigen (HBsAg) in participants, with some achieving non-detectable levels eight months post-final dose[90][95]. - Interim data from the Phase 2b clinical trial (HBV003) is expected in the fourth quarter of 2023, with over 60% of the 120 participants enrolled to date[98]. - The company plans to modify enrollment criteria in the ongoing HBV003 study to focus on patients with HBV surface antigen levels of less than 200 IU/mL[98]. Economic and Market Conditions - Global economic conditions and inflationary pressures could adversely affect the company's future financing capability and operating costs[102]. - The company has assessed the impact of the Ukraine crisis as minimal, with no operations or suppliers based in affected regions[101]. - A hypothetical 10% weakening of the US dollar against the pound sterling would have increased expenses by approximately $2.7 million for the three months ended June 30, 2023[183]. - The company is subject to foreign currency exchange rate fluctuations, particularly with the euro, pound sterling, Swiss franc, and Australian dollar[181]. - The company faces significant operating costs in the UK, which exposes it to currency exchange rate risks[183]. Acquisitions and Contingent Obligations - The company acquired Avidea for an upfront amount of $32.8 million, with an additional contingent consideration of up to $40.0 million based on milestone achievements[130]. - Goodwill related to the acquisition of Avidea was $12.2 million as of June 30, 2023, with no impairment losses recognized during the period[132]. - The company has contingent payment obligations tied to clinical, regulatory, and commercial milestones, but the amounts and timing are uncertain as of June 30, 2023[177]. Tax and Regulatory Considerations - The company benefits from the UK research and development tax credit regime, with potential cash rebates of up to 33.35% of qualifying expenditures[113]. - The SME program has seen a reduction in the additional deduction from 130% to 86% and the cash rebate from 33.35% to 18.6% as of April 2023[115]. - The company is classified as an emerging growth company and may delay the adoption of certain accounting standards[178].
VACCITECH(VACC) - 2023 Q2 - Quarterly Report