VACCITECH(VACC) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Presents Barinthus Biotherapeutics PLC's unaudited condensed consolidated financial statements, management's discussion, market risk, and controls and procedures Item 1. Financial Statements This section presents Barinthus Biotherapeutics PLC's unaudited condensed consolidated financial statements, reporting a $19.7 million net loss and $100.6 million in cash as of March 31, 2025 Condensed Consolidated Balance Sheets Presents the company's financial position, detailing assets, liabilities, and stockholders' equity as of March 31, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | ASSETS (in thousands) | March 31, 2025 | December 31, 2024 | | :---------------------- | :------------- | :---------------- | | Cash and cash equivalents | $99,118 | $110,662 | | Restricted cash | $1,461 | $1,738 | | Total current assets | $109,882 | $125,742 | | Total assets | $141,996 | $160,327 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | March 31, 2025 | December 31, 2024 | | Total current liabilities | $11,976 | $15,657 | | Total liabilities | $26,403 | $30,192 | | Total stockholders' equity | $115,593 | $130,135 | - Total assets decreased from $160.3 million at December 31, 2024, to $142.0 million at March 31, 2025, primarily due to a reduction in cash and cash equivalents[12] - Total stockholders' equity decreased from $130.1 million to $115.6 million, largely influenced by the accumulated deficit[12] Condensed Consolidated Statements of Operations and Comprehensive Loss Details the company's financial performance, including revenues, expenses, and net loss for the three months ended March 31, 2025, and 2024 Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) | (in thousands, except per share amounts) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $8,290 | $11,125 | | General and administrative | $12,639 | $5,994 | | Total operating expenses | $20,929 | $17,119 | | Loss from operations | $(20,600) | $(16,914) | | Net loss | $(19,658) | $(15,520) | | Net loss per share, basic | $(0.49) | $(0.40) | - Net loss increased to $19.7 million for the three months ended March 31, 2025, from $15.5 million in the prior year period, driven by higher general and administrative expenses[13] - Research and development expenses decreased by $2.8 million, while general and administrative expenses increased by $6.6 million year-over-year[13] Condensed Consolidated Statements of Changes in Stockholders' Equity Outlines changes in the company's equity, reflecting net loss, share-based compensation, and foreign currency adjustments for the quarter ended March 31, 2025 Condensed Consolidated Statements of Changes in Stockholders' Equity (in thousands, except number of shares) | (in thousands, except number of shares) | Balance, January 1, 2025 | Share based compensation | Issue of ordinary shares | Foreign currency translation adjustments | Net loss | Balance, March 31, 2025 | | :-------------------------------------- | :----------------------- | :----------------------- | :----------------------- | :--------------------------------------- | :------- | :---------------------- | | Total stockholders' equity attributable to Barinthus Biotherapeutics plc shareholders | $130,029 | $468 | $2 | $4,643 | $(19,648) | $115,494 | | Noncontrolling Interest | $106 | — | — | $3 | $(10) | $99 | | Total Stockholders' Equity | $130,135 | $468 | $2 | $4,646 | $(19,658) | $115,593 | - Total stockholders' equity decreased from $130.1 million at January 1, 2025, to $115.6 million at March 31, 2025, primarily due to the $19.7 million net loss, partially offset by foreign currency translation adjustments[15] - Share-based compensation contributed $0.5 million to equity during the quarter[15] Condensed Consolidated Statements of Cash Flows Summarizes the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(14,902) | $(11,822) | | Net cash used in investing activities | $(5) | $(308) | | Net cash provided by financing activities | $2 | $503 | | Effect of exchange rates on cash, cash equivalents and restricted cash | $3,084 | $(492) | | Net decrease in cash, cash equivalents and restricted cash | $(11,821) | $(12,119) | | Cash, cash equivalents and restricted cash, end of the period | $100,579 | $129,971 | - Net cash used in operating activities increased to $14.9 million for the three months ended March 31, 2025, from $11.8 million in the prior year[18] - The company experienced a net decrease in cash, cash equivalents, and restricted cash of $11.8 million, ending the period with $100.6 million[18] Notes to Condensed Consolidated Financial Statements Detailed notes disclose business, accounting policies, and financial line items, including a strategic shift to I&I programs, deprioritization of other programs, and associated costs - The company completed the liquidation process of Barinthus Biotherapeutics S.R.L. on January 16, 2025[20] - The company announced a strategic focus on developing a pipeline in I&I and the deprioritization of its infectious disease and oncology programs in January 2025[48] - A provision of $1.4 million for severance costs due to workforce reduction was included in accrued other liabilities as of March 31, 2025[44] Research and Development Expenses by Program (in thousands) | Research and Development Expenses by Program (in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Change | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | :----- | | VTP-1000 Celiac | $982 | $1,374 | $(392) | | VTP-300 HBV | $1,350 | $1,913 | $(563) | | Other clinical programs | $741 | $1,767 | $(1,026) | | Other pre-clinical programs | $419 | $784 | $(365) | | Total direct research and development expenses | $3,492 | $5,838 | $(2,346) | | Total indirect research and development expenses | $4,798 | $5,287 | $(489) | | Total research and development expenses | $8,290 | $11,125 | $(2,835) | - The company recognized a foreign exchange loss of $4.4 million in general and administrative expenses for the three months ended March 31, 2025, compared to a $1.2 million gain in the prior year[38] - As of March 31, 2025, 8.1 million stock options were outstanding, with an unrecognized compensation cost of $2.9 million expected to be recognized over 2.1 years[68] - The contingent consideration liability related to the Avidea acquisition was $2.7 million as of March 31, 2025, with potential additional payments up to $40.0 million upon milestone achievement[63] - The company is a clinical-stage biopharmaceutical company focused on developing novel immunotherapeutic drug candidates for treating auto-immune and inflammatory diseases, also evaluating candidates for infectious diseases and cancer[21] - As of March 31, 2025, the company had $100.6 million in cash, cash equivalents, and restricted cash, and an accumulated deficit of $257.3 million, expecting to incur losses for the foreseeable future[25] - The company expects its current cash to fund operations for at least the next twelve months and plans to seek additional funding through equity financing, grants, debt, or collaborations[25] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition and operations, highlighting a strategic shift to I&I programs, a $19.7 million net loss, and cash expected to fund operations into early 2027 Overview Provides a high-level summary of Barinthus Bio's business, strategic focus, and lead product candidates in clinical development - Barinthus Bio is a clinical-stage biopharmaceutical company focused on developing immunotherapeutic drug candidates for auto-immune and inflammatory diseases[82] - The company's lead candidate, VTP-1000, for celiac disease, is in a Phase 1 clinical trial, utilizing the SNAP-TI platform for immune tolerance[83] - The company also has product candidates for infectious diseases (VTP-300 for HBV) and cancer (VTP-850 for prostate cancer) using viral vector technologies, for which it is seeking partners[84] Recent Developments Highlights key recent events, including primary endpoint data from clinical trials for VTP-300 in chronic hepatitis B - Primary endpoint data from two clinical trials for VTP-300 in chronic hepatitis B (HBV003 and IM-PROVE II) were announced on May 7, 2025[92] - HBV003 study showed meaningful reductions in HBsAg (>1 log decline) in 33% of participants with HBsAg ≤200 IU/mL at baseline, and 22% achieved HBsAg loss at any timepoint, with two participants achieving functional cure[93] - IM-PROVE II data indicated that 25% of participants with starting baseline HBsAg levels less than 1000 IU/mL, receiving imdusiran, VTP-300, and low-dose nivolumab, reached functional cure[95] Components of Our Operating Results Explains the primary components of the company's operating expenses, including R&D, G&A, other operating income, and R&D incentives - Operating expenses consist primarily of research and development costs and general and administrative costs[98] - Research and development expenses are expected to increase as programs advance through clinical development, but the company is seeking partners for certain programs (VTP-300, VTP-850)[99] - General and administrative expenses include personnel-related costs, consulting fees, professional services, rent, depreciation, foreign exchange gains/losses, and changes in contingent consideration fair value[100] - Other operating income primarily stems from the CEPI Funding Agreement for VTP-500 MERS vaccine development[103] - Research and development incentives are payments receivable from the UK government for corporation tax relief on qualifying R&D expenditure[105] Critical Accounting Policies and Use of Estimates Discusses key accounting policies and management's significant estimates and judgments, particularly regarding contingent consideration and intangible asset impairment - Management makes estimates and judgments, particularly regarding the fair value of contingent consideration and impairment of intangible assets[109] - Following a strategic shift in January 2025 and a sustained decline in ADS price, a qualitative and quantitative assessment was performed, determining that intangible assets were recoverable[112] - The contingent consideration liability for the Avidea acquisition is remeasured to fair value at each reporting date, with changes recognized in general and administrative expenses[114] Results of Operations Compares the company's operating results for the three months ended March 31, 2025, and 2024, detailing changes in expenses and net loss Results of Operations (in thousands) | (in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Change | | :----------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Research and development | $8,290 | $11,125 | $(2,835) | | General and administrative | $12,639 | $5,994 | $6,645 | | Total operating expenses | $20,929 | $17,119 | $3,810 | | Loss from operations | $(20,600) | $(16,914) | $(3,686) | | Net loss | $(19,658) | $(15,520) | $(4,138) | - Research and development expenses decreased by $2.8 million, primarily due to a $2.0 million net decrease in infectious disease and oncology programs and a $0.4 million decrease in VTP-1000 spend as it progressed to clinic[118] - General and administrative expenses increased by $6.6 million, mainly due to a $4.4 million foreign exchange loss (vs. $1.2 million gain prior year), a $0.7 million increase in depreciation, and a $0.3 million increase in personnel-related severance costs[120] - Research and development incentives decreased by $0.3 million due to reduced eligible expenses following strategic prioritization of U.S.-based immune tolerance R&D programs[123] Liquidity and Capital Resources Assesses the company's ability to meet its financial obligations, detailing cash position, funding history, and future capital requirements - Since inception, the company has funded operations through equity placements, grants, research incentives, convertible loan notes, and payments from the OUI License Agreement Amendment for Vaxzevria[125] - As of March 31, 2025, cash, cash equivalents, and restricted cash totaled $100.6 million[125] - The company expects existing financial resources to fund operating expenses and capital expenditure requirements into the start of 2027[142] - Future funding requirements are substantial and depend on the progress and costs of R&D, clinical trials, regulatory approvals, manufacturing, and commercialization efforts[138][139][140] Cash Flow Summary (in thousands) | (in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(14,902) | $(11,822) | | Net cash used in investing activities | $(5) | $(308) | | Net cash provided by financing activities | $2 | $503 | | Effect of exchange rates on cash, cash equivalents and restricted cash | $3,084 | $(492) | | Net decrease in cash, cash equivalents and restricted cash | $(11,821) | $(12,119) | - Net cash used in operating activities increased to $14.9 million in Q1 2025, primarily due to the net loss and changes in operating assets and liabilities[130] - Cash provided by financing activities was minimal ($2 thousand) in Q1 2025, compared to $0.5 million in Q1 2024, mainly from stock exercises[133] - The company is prioritizing the development of a pipeline for I&I indications, enabled by its proprietary SNAP-TI platform, with VTP-1000 for celiac disease as the lead candidate in Phase 1 clinical trial[83] - The company is evaluating VTP-300 for chronic hepatitis B and VTP-850 for prostate cancer, seeking partners for their continued development beyond ongoing clinical trials[84] - The company incurred a net loss of $19.7 million for the three months ended March 31, 2025, and expects to incur net operating losses for at least the next several years[87] - Existing cash, cash equivalents, and restricted cash are expected to fund operating expenses and capital expenditure requirements into the start of 2027[89][142] Item 3. Quantitative and Qualitative Disclosure About Market Risk Discusses the company's exposure to market risks, primarily foreign currency exchange rate fluctuations and interest rate sensitivity - The company is subject to foreign currency exchange rate fluctuations, particularly with the pound sterling, as it incurs significant operating costs in the U.K.[151][153] - A hypothetical 10% weakening in the United States dollar relative to the pound sterling would materially change current and projected expenses denominated in pound sterling[153] - The company is not significantly exposed to interest rate risk, as it has no significant interest-bearing liabilities, and a 10% change in interest rates would not materially impact financial statements[154] Item 4. Controls and Procedures The principal executive and financial officers evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2025, concluding they were effective - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[157] - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2025[158] PART II - OTHER INFORMATION Covers legal proceedings, risk factors, equity sales, and other required disclosures for the reporting period Item 1. Legal Proceedings The company is not currently party to any legal proceedings or claims expected to have a material adverse effect on its business - As of March 31, 2025, the company does not believe it is party to any claim or litigation that would have a material adverse effect on its business[160] Item 1A. Risk Factors Updates previously disclosed risk factors, emphasizing the potential negative impact of inadequate government agency funding and changes in U.S. fiscal and trade policies - Inadequate funding for U.S. government agencies (FDA, SEC) or disruptions to their operations could hinder product development, regulatory approvals, and overall business functions[162][163][165] - Changes in U.S. fiscal, tax, and other federal policies, including tariffs, could adversely affect the company's business, the U.S. and global economy, and international trade relations[166][167] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports no recent unregistered equity sales or purchases, and notes a change in the planned use of IPO proceeds to focus on immune tolerance R&D programs - No unregistered sales of equity securities or purchases of equity securities occurred during the three months ended March 31, 2025[172][176] - The planned use of net proceeds from the May 2021 IPO ($102.8 million) has changed due to pipeline prioritization, now focused on immune tolerance R&D programs and general corporate purposes[173][174][175] Item 3. Defaults Upon Senior Securities This item is not applicable to the company for the reporting period Item 4. Mine Safety Disclosures This item is not applicable to the company for the reporting period Item 5. Other Information No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fiscal quarter ended March 31, 2025 - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended March 31, 2025[180] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the Articles of Association, certifications from the Principal Executive Officer and Principal Financial Officer, and Inline XBRL documents Exhibits Filed with Form 10-Q | Exhibit Number | Description | | :------------- | :---------- | | 3.1 | Articles of Association of the Registrant | | 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) | | 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) | | 32.1** | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 | | 101.INS* | Inline XBRL Instance Document | | 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | | 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | | 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | 104* | Cover Page Interactive Data File | SIGNATURES Contains the official signatures for the report, confirming its submission and accuracy SIGNATURES The report was duly signed on behalf of Barinthus Biotherapeutics PLC by William Enright, Chief Executive Officer, on May 7, 2025 - The report was signed by William Enright, Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) on May 7, 2025[186]