Immunic(IMUX) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section presents Immunic, Inc.'s unaudited condensed consolidated financial statements, management's discussion, market risk, and controls Item 1. Condensed Consolidated Financial Statements (Unaudited) Immunic, Inc.'s unaudited condensed consolidated financial statements for June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, are presented with detailed notes Condensed Consolidated Balance Sheets A summary of Immunic, Inc.'s financial position at June 30, 2025, and December 31, 2024, is presented | Metric | June 30, 2025 (Unaudited) (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------- | :------------------------------- | | Cash and cash equivalents | $55,310 | $35,668 | | Total current assets | $59,842 | $39,332 | | Total assets | $61,429 | $40,868 | | Total current liabilities | $27,313 | $22,175 | | Total liabilities | $27,518 | $22,439 | | Total stockholders' equity | $33,911 | $18,429 | - Cash and cash equivalents increased by $19,642 thousand from December 31, 2024, to June 30, 2025[8] - Total assets increased by $20,561 thousand, while total liabilities increased by $5,079 thousand over the six-month period[8] Condensed Consolidated Statements of Operations Immunic, Inc.'s financial performance, including revenues and expenses, for the periods ended June 30, 2025, and 2024, is detailed | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $21,369 | $18,323 | $42,902 | $37,059 | | General and administrative | $5,714 | $4,491 | $11,006 | $9,636 | | Total operating expenses | $27,083 | $22,814 | $53,908 | $46,695 | | Loss from operations | $(27,083) | $(22,814) | $(53,908) | $(46,695) | | Net loss | $(26,820) | $(21,380) | $(52,293) | $(50,964) | | Net loss per share, basic and diluted | $(0.20) | $(0.21) | $(0.45) | $(0.51) | - Net loss increased by $5,440 thousand (25%) for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to higher operating expenses and lower interest income[11] - Research and development expenses increased by $3,046 thousand (17%) for the three months ended June 30, 2025, driven by external development costs for vidofludimus calcium programs and personnel expenses[11][196] Condensed Consolidated Statements of Comprehensive Loss Immunic, Inc.'s comprehensive loss, including net loss and other comprehensive income/loss, is presented | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(26,820) | $(21,380) | $(52,293) | $(50,964) | | Foreign currency translation | $(1,399) | $(505) | $(1,684) | $23 | | Total comprehensive loss | $(28,219) | $(21,885) | $(53,977) | $(50,941) | - Total comprehensive loss increased to $(53,977) thousand for the six months ended June 30, 2025, from $(50,941) thousand in the prior year, primarily due to a higher net loss and negative foreign currency translation adjustments[14] Condensed Consolidated Statements of Stockholders' Equity Changes in Immunic, Inc.'s stockholders' equity for the six months ended June 30, 2025, are summarized | Metric (in thousands) | Balance at January 1, 2025 | Balance at June 30, 2025 | | :-------------------- | :------------------------- | :----------------------- | | Common Stock Amount | $8 | $9 | | Additional Paid-In Capital | $525,611 | $595,069 | | Accumulated Other Comprehensive Income | $4,209 | $2,525 | | Accumulated Deficit | $(511,399) | $(563,692) | | Total Stockholders' Equity | $18,429 | $33,911 | - Total stockholders' equity increased significantly from $18,429 thousand at January 1, 2025, to $33,911 thousand at June 30, 2025, primarily driven by proceeds from the May 2025 Offering ($60,661 thousand) and April 2025 Offering ($4,734 thousand), despite a net loss of $(52,293) thousand[16] - The accumulated deficit grew from $(511,399) thousand to $(563,692) thousand during the six-month period due to ongoing operating losses[16] Condensed Consolidated Statements of Cash Flows Immunic, Inc.'s cash inflows and outflows from operating, investing, and financing activities are presented | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(46,385) | $(41,008) | | Net cash used in investing activities | $(83) | $(211) | | Net cash provided by financing activities | $65,518 | $74,464 | | Net change in cash and cash equivalents | $19,642 | $33,024 | | Cash and cash equivalents, end of period | $55,310 | $79,698 | - Operating activities used $46,385 thousand in cash for the six months ended June 30, 2025, an increase from $41,008 thousand in the prior year, primarily due to the net loss[21][233] - Financing activities provided $65,518 thousand in cash for the six months ended June 30, 2025, mainly from the April 2025 and May 2025 equity offerings[21][236] Notes to Condensed Consolidated Financial Statements Detailed notes provide additional information on Immunic, Inc.'s business, accounting policies, and financial position 1. Description of Business and Basis of Financial Statements Immunic, Inc.'s business, operations, and the basis of its financial statement preparation are described - Immunic, Inc. is a biotechnology company focused on developing oral immunology therapies for chronic inflammatory and autoimmune diseases, with approximately 90 employees as of July 31, 2025[24][145] - The company has an accumulated deficit of approximately $563.7 million as of June 30, 2025, and has never been profitable, raising substantial doubt about its ability to continue as a going concern without additional capital[26][28][158][160] - The financial statements are prepared in conformity with U.S. GAAP and include Immunic and its wholly-owned subsidiaries, Immunic AG and Immunic Australia Pty Ltd., managed as a single reportable segment[29] 2. Summary of Significant Accounting Policies Key accounting policies used in preparing Immunic, Inc.'s financial statements are outlined - The company's reporting currency is U.S. dollars, with functional currencies of Euro for Immunic AG and Australian dollar for Immunic Australia Pty Ltd., with translation gains/losses recorded in accumulated other comprehensive income (loss)[32] - Research and development expenses, primarily for vidofludimus calcium and IMU-856 programs, are expensed as incurred[43][44] - Stock-based compensation is measured at grant-date fair value for equity awards and recognized over the service period, using the Black-Scholes-Merton option-pricing model[52][53][54] 3. Balance Sheet Details Detailed information on specific balance sheet accounts is provided | Account (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Prepaid clinical and related costs | $2,467 | $1,871 | | Accounts payable - Clinical costs | $7,015 | $7,561 | | Accrued clinical and related costs | $16,227 | $12,456 | | Accrued compensation | $1,457 | $354 | - Prepaid clinical and related costs increased by $596 thousand, while accrued clinical and related costs increased by $3,771 thousand from December 31, 2024, to June 30, 2025[67][69] 4. Leases Information regarding Immunic, Inc.'s operating lease arrangements and obligations is presented - The company leases office and laboratory space in New York City and Germany, with lease terms up to 60 months[71] | Year | Operating Lease Obligation (in thousands) | | :--- | :---------------------------------------- | | 2025 | $415 | | 2026 | $444 | | 2027 | $85 | | 2028 | $82 | | Total | $1,026 | | Interest | $(47) | | Present value of obligation | $979 | - Operating lease costs were $312 thousand for the three months ended June 30, 2025, and $591 thousand for the six months ended June 30, 2025[73] 5. Fair Value Details on the fair value measurements of Immunic, Inc.'s financial assets and liabilities are provided | Asset (in thousands) | Fair Value at June 30, 2025 | Fair Value at December 31, 2024 | | :------------------- | :-------------------------- | :------------------------------ | | Money market funds | $47,190 | $14,751 | - Money market funds, classified as Level 1 assets, increased significantly from $14,751 thousand at December 31, 2024, to $47,190 thousand at June 30, 2025[75] - The company had no Level 2 or Level 3 assets or liabilities for the periods presented, except for tranche rights in Q1 2024 which were reclassified to equity[39][78] 6. Common Stock Information on Immunic, Inc.'s common stock, including recent offerings and Nasdaq compliance, is presented - The company completed an April 2025 Offering, issuing 5,666,667 shares of common stock for gross proceeds of approximately $5.1 million and net proceeds of $4.7 million[85][88] - A May 2025 Equity Offering involved the issuance of pre-funded warrants, Series A warrants, and Series B warrants, generating approximately $65 million in gross proceeds, with potential for an additional $130 million if warrants are fully exercised for cash[89][92] - Immunic received a Nasdaq non-compliance notice on June 27, 2025, for its common stock trading below $1.00 for 30 consecutive business days, with a compliance period until December 24, 2025[102] 7. Stock-Based Compensation Plans Details on Immunic, Inc.'s stock-based compensation plans and related expenses are provided - Total stock-based compensation expense for the six months ended June 30, 2025, was $3,941 thousand, a decrease from $4,632 thousand in the prior year[121] | Expense Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $761 | $842 | $1,592 | $2,005 | | General and administrative | $1,138 | $1,040 | $2,349 | $2,627 | | Total | $1,899 | $1,882 | $3,941 | $4,632 | - As of June 30, 2025, there was $15.6 million in total unrecognized compensation expense related to the 2019 Plan, to be recognized over a weighted average period of 3.16 years[121] 8. Related Party Transactions Information on transactions and agreements with Immunic, Inc.'s related parties is disclosed - The Executive Chairman Agreement with Duane Nash was extended to December 31, 2025, with his monthly base salary increasing to $33,986 in 2025[127] 9. Commitments and Contingencies Immunic, Inc.'s contractual obligations, licensing agreements, and potential litigation are outlined - As of June 30, 2025, the company has non-cancelable contractual obligations of approximately $2.1 million related to its development programs for vidofludimus calcium and IMU-856, expected to be paid in 2025 and 2026[128][239] - Immunic AG entered into a licensing agreement with Ludwig-Maximilians-University for new neuroinflammatory molecules, entitling the university to future development, regulatory, and sales milestone payments[130] - The company is not currently a party to any material litigation but acknowledges the industry's susceptibility to claims regarding intellectual property and product liability[131][250] 10. Segment Disclosures Information on Immunic, Inc.'s operating segments and how performance is assessed is provided - The company operates as a single reportable segment: life science, focused on developing clinical and preclinical product candidates[132] - The Chief Executive Officer, as the CODM, assesses performance based on net loss and allocates resources based on cash resources and the probability of success of R&D activities[133] | Operating Expenses (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Clinical product candidates | $35,491 | $29,882 | | Pre-clinical product candidates | $345 | $400 | | Employee costs- research and development | $4,761 | $3,881 | | Employee costs-general and administrative | $3,643 | $2,704 | | Non-cash stock compensation | $3,941 | $4,632 | | Total operating expenses | $53,908 | $46,695 | 11. Subsequent Events Significant events occurring after the balance sheet date are disclosed - On July 7, 2025, the Board authorized grants of up to 35,000,000 Stock Appreciation Rights (SARs) to employees and executive officers, with an exercise price of $0.77[137] - These SARs are intended to be settled for common stock, pending stockholder approval to amend the 2019 Omnibus Equity Incentive Plan to provide sufficient shares[137] - SAR exercisability is contingent on various milestones, including the exercise of Series A and B warrants and the completion of the second and third tranches of the January 2024 private placement[138] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's perspective on the company's financial condition, operations, liquidity, and key business developments is provided Forward-Looking Statements This section contains cautionary statements regarding Immunic, Inc.'s future expectations and potential risks - The report contains forward-looking statements regarding development programs, financial estimates, and capital resources, which are subject to risks and uncertainties[140][141] - Investors are cautioned not to place undue reliance on these statements, as actual results may differ materially due to various factors, including clinical trial outcomes and funding availability[142][144] Overview An overview of Immunic, Inc.'s biotechnology business, product candidates, and clinical trial status is provided - Immunic is a biotechnology company developing oral immunology therapies for chronic inflammatory and autoimmune diseases, with main operations in Germany and headquarters in New York City[145] - Key product candidates include vidofludimus calcium (IMU-838) in Phase 3 for relapsing multiple sclerosis (RMS) and Phase 2 for progressive MS (PMS) and ulcerative colitis (UC); IMU-856 for gastrointestinal diseases; and IMU-381 for gastrointestinal diseases in preclinical testing[146][147][153] - Enrollment for both Phase 3 ENSURE trials of vidofludimus calcium in RMS was completed in May 2025, with top-line data expected by the end of 2026[148] Strategy Immunic, Inc.'s strategic focus on developing immunology therapies and key initiatives are outlined - The company's strategy focuses on developing new molecules for immunological targets, leveraging R&D infrastructure in Germany and Australia for efficient development in high unmet need indications[157] - Strategic initiatives include executing Phase 3 ENSURE trials, analyzing Phase 2 CALLIPER data, advancing IMU-856, continuing preclinical research, preparing for commercial launch, and evaluating strategic collaborations[161] Financial Condition, Liquidity and Going Concern Immunic, Inc.'s financial health, capital resources, and ability to continue as a going concern are discussed - Immunic has no product revenue, has never been profitable, and incurred an accumulated deficit of approximately $563.7 million as of June 30, 2025[158] - The company expects significant and increasing operating losses, and its cash and cash equivalents of $55.3 million as of June 30, 2025, are insufficient to fund operations for at least twelve months without raising additional capital, raising substantial doubt about its going concern ability[159][160] Key Status Updates Important updates on Immunic, Inc.'s clinical trials and product candidate development are presented - IMU-856 demonstrated a dose-dependent increase of endogenous GLP-1 levels in celiac disease patients and reduced body weight gain in preclinical testing, suggesting potential for weight management[161][162][163] - Positive data from the Phase 2 CALLIPER trial of vidofludimus calcium in PMS showed a 30% reduction in 24-week confirmed disability worsening (24wCDW) in PPMS patients and a 20% reduction in thalamic brain volume loss[164][165] - Long-term open-label extension data from the Phase 2 EMPhASIS trial in RRMS showed 92.3% of patients remained free of 12-week CDW at week 144, with a favorable safety profile over 5.5 years[170] Components of Results of Operations An explanation of the key components contributing to Immunic, Inc.'s financial results is provided - The company has not generated product sales revenue and does not expect to in the foreseeable future, relying on successful development and regulatory approval of product candidates[186] - Research and development expenses, totaling approximately $421.2 million through June 30, 2025, are expensed as incurred and are expected to increase due to ongoing clinical trials and inflationary pressures[187][188][189] - Other income (expense) includes deal costs from the January 2024 Financing, R&D tax incentives from Australia, and a German Government R&D grant[195] Results of Operations A detailed analysis of Immunic, Inc.'s financial performance for the reported periods is presented | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Research and development | $21,369 | $18,323 | $3,046 | 17% | | General and administrative | $5,714 | $4,491 | $1,223 | 27% | | Total operating expenses | $27,083 | $22,814 | $4,269 | 19% | | Net loss | $(26,820) | $(21,380) | $(5,440) | 25% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Research and development | $42,902 | $37,059 | $5,843 | 16% | | General and administrative | $11,006 | $9,636 | $1,370 | 14% | | Total operating expenses | $53,908 | $46,695 | $7,213 | 15% | | Net loss | $(52,293) | $(50,964) | $(1,329) | 3% | - Interest income decreased by $0.8 million (76%) for the three months and $1.8 million (81%) for the six months ended June 30, 2025, due to a lower average cash balance[197][201] Liquidity and Capital Resources Immunic, Inc.'s cash position, capital-raising activities, and funding needs are discussed - As of June 30, 2025, Immunic had $55.3 million in cash and cash equivalents, which is not adequate to fund operations for at least twelve months without additional capital[206][231] - The company raised approximately $4.7 million net from the April 2025 Offering and $60.7 million net from the May 2025 Equity Offering[215][220] - The January 2024 Financing provided $80 million in gross proceeds from the first tranche, with potential for an additional $160 million from conditional second and third tranches[223][226] Off-Balance Sheet Arrangements Information on Immunic, Inc.'s off-balance sheet arrangements is disclosed - As of June 30, 2025, the company has not entered into any off-balance sheet arrangements or relationships with unconsolidated entities[237] Other Commitments and Obligations Immunic, Inc.'s additional contractual commitments and obligations are detailed - The company has non-cancelable contractual obligations of approximately $2.1 million for development programs, expected to be paid in 2025 and 2026[239] - Obligations under the Daiichi Sankyo and Ludwig-Maximilians-University agreements include potential future development, regulatory, and sales milestone payments[238] Critical Accounting Policies and Estimates Key accounting policies and estimates requiring significant judgment in Immunic, Inc.'s financial reporting are identified - The company's financial statements require estimates and judgments, particularly for stock-based compensation and valuation of tranche rights, which are reviewed with the Audit Committee[240] Recently Issued Accounting Standards Updates on recently adopted and pending accounting standards relevant to Immunic, Inc. are provided - The company adopted ASU No. 2023-09 (Income Taxes) for the annual period starting January 1, 2025, to improve income tax disclosures[241] - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for fiscal years beginning after December 15, 2026, and the company is evaluating its impact[65][66] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's exposure to market risks, including interest rate sensitivity and foreign currency exchange risk, is discussed Interest Rate Sensitivity Immunic, Inc.'s exposure to interest rate fluctuations and their potential financial impact are discussed - The company held $55.3 million in cash and cash equivalents as of June 30, 2025, primarily for working capital, and does not believe it has material exposure to changes in fair value from interest rate fluctuations due to the short-term nature of these investments[243] Foreign Currency Exchange Risk Immunic, Inc.'s exposure to foreign currency exchange rate fluctuations and their potential impact are analyzed - The company is exposed to foreign currency exchange rate fluctuations, primarily between the U.S. dollar, Euro, and Australian dollar, due to R&D operations in Germany and Australia[244] - A hypothetical 10% adverse change in foreign currency exchange rates could impact net current liabilities by $1.4 million and net loss by approximately $4.1 million for the six months ended June 30, 2025[246] - The company does not currently use foreign currency hedging transactions[244] Effects of Inflation and Tariffs The impact of inflation and tariffs on Immunic, Inc.'s operations and financial results is assessed - The company has experienced a general increase in costs due to global inflation but does not believe it had a material impact on results of operations for the periods presented[247] - Currently enacted or proposed tariffs are not expected to have a material impact on operations[247] Item 4. Controls and Procedures The evaluation of the company's disclosure controls and procedures and changes in internal control over financial reporting are detailed Evaluation of Disclosure Controls and Procedures Management's assessment of the effectiveness of Immunic, Inc.'s disclosure controls and procedures is presented - As of June 30, 2025, management, including the CEO and Principal Financial Officer, concluded that the company's disclosure controls and procedures were effective[248] Changes in Internal Control over Financial Reporting Any material changes in Immunic, Inc.'s internal control over financial reporting are reported - There were no material changes in internal control over financial reporting during the six months ended June 30, 2025[249] PART II - OTHER INFORMATION This section details legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits Item 1. Legal Proceedings The company is not currently involved in any material litigation but acknowledges inherent industry risks - The company is not currently a party to any litigation that it believes would materially affect its business, operating results, financial condition, or cash flows[250] - The biotechnology industry is characterized by frequent claims and litigation, including securities litigation, patent and intellectual property rights, and product liability claims[250] Item 1A. Risk Factors Key risks, particularly potential Nasdaq delisting due to non-compliance with the minimum bid price requirement, are highlighted - The company received a Nasdaq non-compliance notice on June 27, 2025, for its common stock trading below $1.00 for 30 consecutive business days, with a compliance period until December 24, 2025[252] - Failure to regain compliance could lead to delisting, negatively impacting stock price, liquidity, ability to raise capital, and potentially deterring investors[254] - The company is monitoring its stock price and evaluating options to regain compliance, including a potential reverse stock split[252][254] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities or use of proceeds to report during the six months ended June 30, 2025[255] Item 3. Defaults Upon Senior Securities This section states that there are no defaults upon senior securities to report - This item is not applicable, indicating no defaults upon senior securities[256] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the company - This item is not applicable, indicating no mine safety disclosures[257] Item 5. Other Information This section reports on Rule 10b5-1 trading arrangements by directors or Section 16 officers - No director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the six months ended June 30, 2025[258] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including underwriting agreements, certificates of incorporation, equity incentive plans, warrants, and employment agreements - Key exhibits include the Underwriting Agreement for the May 2025 Offering, Amended and Restated Certificate of Incorporation, 2019 Omnibus Equity Incentive Plan, various warrant forms (Pre-Funded, Placement Agent, Series A, Series B), and employment agreements[260][261]