Vaxcyte(US:PCVX)2025-05-07 20:23PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (unaudited) Vaxcyte's unaudited condensed consolidated financial statements for Q1 2025 show a net loss of $140.7 million, increased R&D expenses, and total assets of $3.38 billion Condensed Consolidated Balance Sheet Highlights (unaudited) | (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $346,850 | $387,878 | | Total current assets | $1,716,563 | $1,787,985 | | Total assets | $3,378,103 | $3,511,318 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $96,996 | $140,180 | | Total liabilities | $178,077 | $205,499 | | Total stockholders' equity | $3,200,026 | $3,305,819 | Condensed Consolidated Statements of Operations Highlights (unaudited) | (in thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $148,134 | $94,587 | | General and administrative | $32,659 | $19,885 | | Loss from operations | $(180,793) | $(114,472) | | Interest income | $32,935 | $21,666 | | Net loss | $(140,718) | $(95,020) | | Net loss per share, basic and diluted | $(1.04) | $(0.85) | Condensed Consolidated Statements of Cash Flows Highlights (unaudited) | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(166,274) | $(159,124) | | Net cash provided by (used in) investing activities | $123,317 | $(451,073) | | Net cash provided by financing activities | $759 | $818,196 | Notes to Unaudited Condensed Consolidated Financial Statements These notes detail Vaxcyte's accounting policies, fair value measurements, and significant agreements, including manufacturing commitments with Lonza and Sutro Biopharma - The company entered into a commercial manufacturing and supply agreement with Lonza in October 2023 for its PCV franchise. As of March 31, 2025, Vaxcyte has incurred $171.3 million in capital expenditures for its owned facility buildout and equipment495053 - In November 2023, the company exercised its option with Sutro Biopharma, paying $50.0 million as a first installment for manufacturing rights. A final installment of $25.0 million was paid in May 2024. Additional milestone payments could total up to $60.0 million70 Non-cancelable Purchase Commitments (as of March 31, 2025) | Years ending December 31, | Amount (in thousands) | | :--- | :--- | | Remainder of 2025 | $265,216 | | 2026 | $111,727 | | 2027 | $733 | | 2028 | $527 | | Total | $378,203 | - As of March 31, 2025, the company had $356.6 million of unrecognized stock-based compensation expense, expected to be recognized over a weighted-average period of 2.91 years95 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Vaxcyte's financial condition, operational results, and business outlook, highlighting pipeline advancements, increased expenses, and sufficient liquidity for the next 12 months Overview and Pipeline Vaxcyte is a clinical-stage company developing broad-spectrum conjugate vaccines using its XpressCF cell-free protein synthesis platform, led by PCV candidates VAX-31 and VAX-24 - VAX-31 (Adult): Following positive Phase 1/2 results in September 2024 and receiving FDA Breakthrough Therapy Designation in November 2024, the company plans to initiate a pivotal Phase 3 study by mid-2025111114 - VAX-24 (Pediatric): Announced positive topline data from the infant Phase 2 dose-finding study in March 2025, showing a safety profile similar to PCV20 and meeting key immunogenicity endpoints114117 - VAX-31 (Pediatric): Advanced to the second and final stage of its Phase 2 study in infants in February 2025, with topline data from the primary three-dose series expected in mid-2026116 - Other pipeline programs include VAX-A1 (Group A Strep), VAX-PG (periodontitis), and VAX-GI (shigellosis), all in preclinical stages116 Results of Operations Vaxcyte's net loss increased to $140.7 million in Q1 2025, primarily due to a 56.6% rise in R&D expenses and a 64.2% increase in G&A expenses Comparison of Operating Results (Three Months Ended March 31) | (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $148,134 | $94,587 | $53,547 | 56.6% | | General and administrative | $32,659 | $19,885 | $12,774 | 64.2% | | Total operating expenses | $180,793 | $114,472 | $66,321 | 57.9% | | Loss from operations | $(180,793) | $(114,472) | $(66,321) | 57.9% | | Total other income, net | $40,075 | $19,452 | $20,623 | 106.0% | | Net loss | $(140,718) | $(95,020) | $(45,698) | 48.1% | - The $53.5 million increase in R&D expenses was driven by a $27.3 million rise in product manufacturing costs and a $19.4 million increase in personnel-related expenses due to headcount growth and activities supporting the PCV programs164 Liquidity and Capital Resources Vaxcyte holds $3.0 billion in cash, cash equivalents, and investments, sufficient to fund operations for at least the next 12 months, despite an accumulated deficit of $1.5 billion - As of March 31, 2025, the company had $0.3 billion in cash and cash equivalents and $2.6 billion in investments167 - The company believes its existing cash, cash equivalents and investments will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the filing date of the report119180 - Net cash used in operating activities increased to $166.3 million in Q1 2025 from $159.1 million in Q1 2024, due to higher expenditures supporting business growth and development activities184185 - Net cash from financing activities was $0.8 million in Q1 2025, a significant decrease from $818.2 million in Q1 2024, which included proceeds from a follow-on offering187 Item 3. Quantitative and Qualitative Disclosures About Market Risk Vaxcyte's market risks include interest rate sensitivity on its $3.0 billion investment portfolio and foreign currency exposure from Swiss Franc-denominated contracts with Lonza - A hypothetical 10% change in interest rates would impact net assets by approximately $11.5 million and net loss by $3.1 million for the quarter198 - The company is exposed to foreign currency risk, primarily from contracts with Lonza denominated in Swiss Francs (CHF). As of March 31, 2025, it held $27.8 million in CHF cash and had $47.8 million in foreign currency denominated payables and accruals200 - A hypothetical 10% change in currency exchange rates would impact net assets by approximately $17.3 million and net loss by $15.9 million for the quarter200 Item 4. Controls and Procedures Management concluded that Vaxcyte's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025203 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls204 PART II. OTHER INFORMATION Item 1. Legal Proceedings Vaxcyte is not currently involved in any legal proceedings that would materially adversely affect its business, financial condition, or operating results - Vaxcyte is not presently a party to any material legal proceedings207 Item 1A. Risk Factors This section outlines significant risks, including Vaxcyte's clinical-stage status, reliance on lead candidates and novel technologies, intense competition, manufacturing dependence, and regulatory and market challenges Risks Related to Financial Position and Capital Needs Vaxcyte, a clinical-stage company with an accumulated deficit of $1.5 billion, anticipates continued losses and will require substantial additional funding to finance operations - The company has incurred significant net losses since inception and had an accumulated deficit of $1.5 billion as of March 31, 2025212 - Vaxcyte will require substantial additional funding to finance its operations. If unable to raise capital, it could be forced to delay, reduce, or terminate development programs215 Risks Related to Business and Industry Vaxcyte's success depends on its novel cell-free platform and lead PCV candidates, facing intense competition from major pharmaceutical companies with greater resources - The company's business is highly dependent on the success of its PCV candidates, VAX-31 and VAX-24. Failure to successfully develop and commercialize these candidates would significantly harm the business227 - Primary competitors like Pfizer, Merck, and GSK have significantly greater resources, experience, and competing products (e.g., PCV20, PCV15, PCV21), which may make it difficult for Vaxcyte to compete232233 - The company's vaccine development approach is based on a novel cell-free protein synthesis platform, which is unproven at a commercial scale and may expose it to unforeseen risks and development delays219 Risks Related to Reliance on Third Parties Vaxcyte heavily relies on third-party CROs for clinical trials and CMOs like Lonza for manufacturing, where any failure could severely delay development and commercialization - The company relies on third-party CMOs, including a strategic partnership with Lonza, for all manufacturing of its vaccine candidates. Any failure by these partners to supply sufficient quantities at acceptable quality and price would materially and adversely affect the business250332 - The company depends on third-party CROs and independent investigators to conduct its clinical trials. If these parties do not perform their duties successfully or meet deadlines, regulatory approval and commercialization could be delayed328 Risks Related to Government Regulation Vaxcyte faces extensive, costly, and uncertain government regulation, including lengthy FDA approval processes, ongoing review, and pricing pressures from legislative reforms - The FDA regulatory approval process is lengthy and time-consuming, and there is a risk the FDA may disagree with the company's regulatory plan or that clinical trials may not support approval340345 - Healthcare legislative reforms, such as the Inflation Reduction Act (IRA), could increase pricing pressure and negatively impact the business, although the IRA also includes provisions beneficial to vaccines, such as eliminating patient cost-sharing under Medicare Part D373377 - The company is subject to numerous evolving data privacy and security laws (e.g., HIPAA, CCPA, GDPR), and failure to comply could lead to significant fines, litigation, and reputational harm385386 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Vaxcyte reported no unregistered sales of equity securities during the three months ended March 31, 2025 - There were no unregistered sales of equity securities in the three months ended March 31, 2025453 Item 3. Defaults Upon Senior Securities This section is not applicable to the company's current financial reporting Item 4. Mine Safety Disclosures This section is not applicable to the company's current operations Item 5. Other Information This section discloses that Andrew Guggenhime, President and CFO, terminated his Rule 10b5-1 trading plan on March 17, 2025 - Andrew Guggenhime, President and Chief Financial Officer, terminated his 10b5-1 trading plan on March 17, 2025458 Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents and XBRL data