Financial Performance - For the three and nine months ended September 30, 2025, the company incurred a net loss of $14.6 million and $55.4 million, respectively, with an accumulated deficit of $293.0 million as of September 30, 2025[110]. - The company has incurred net losses since 2023 and expects to continue incurring losses as it advances its product candidates through clinical development and seeks regulatory approval[110]. - For the three months ended September 30, 2025, the company reported no license revenue compared to $14.97 million in the same period of 2024, reflecting a decrease of $14.97 million[141]. - For the nine months ended September 30, 2025, the company reported no license revenue compared to $15.0 million in the same period of 2024, reflecting a decrease of $15.0 million[152]. - The company incurred a net loss of $55.4 million for the nine months ended September 30, 2025, compared to a net loss of $40.6 million in 2024, an increase in loss of $14.8 million[169]. - Cash used in operating activities was $43.7 million for the nine months ended September 30, 2025, compared to $42.0 million in 2024, indicating an increase of $1.7 million[169]. - Interest income decreased to $1.6 million for the nine months ended September 30, 2025, down from $2.0 million in 2024, a decline of $0.4 million[160]. - As of September 30, 2025, the company had cash, cash equivalents, and restricted cash of $75.7 million[162]. - The company has incurred losses in each year since its inception in 2016, except for 2022 when it was profitable[175]. Merger and Acquisition - A merger agreement was entered into on September 29, 2025, with Topco and Clywedog, which will result in the company becoming a wholly owned subsidiary of Topco[116]. - Upon the merger's effective time, each outstanding ordinary share will be converted into one share of Topco Common Stock plus cash for fractional shares, with a potential self-tender offer of up to $27 million in Topco Common Stock[117]. - The newly combined company will focus on clinical-stage candidates targeting metabolic and autoimmune diseases, with four clinical data milestones expected within 18 months post-merger[120]. - The company entered into a definitive merger agreement with Clywedog, which triggered an impairment assessment due to the indicative offer price being below the fair value of net assets[139]. - The company entered into a merger agreement with Clywedog on September 29, 2025, which includes various covenants and agreements regarding business operations until the merger closes[167]. Research and Development - The company is currently conducting a Phase 1 clinical trial for its lead candidate VTP-1000, aimed at restoring immune non-responsiveness to gluten in celiac disease patients, with data expected before the end of 2025[115]. - The company is evaluating a product candidate, VTP-300, for chronic hepatitis B, which is currently in Phase 2 trials, and is seeking a partner for further development[108]. - Research and development expenses are expected to increase as the company progresses its programs, with significant resources allocated to clinical trials and manufacturing processes[124]. - Research and development expenses decreased to $5.39 million in Q3 2025 from $11.14 million in Q3 2024, a decline of $5.75 million[143]. - Research and development expenses decreased to $21.6 million for the nine months ended September 30, 2025, down from $33.9 million in 2024, representing a reduction of $12.3 million[153]. - Research and development incentives decreased to $0.24 million in Q3 2025 from $0.61 million in Q3 2024, a decline of $0.37 million[150]. - The company expects minimal future activity on the VTP-500 program following a strategic decision to prioritize pipeline assets in the I&I space[148]. Operating Expenses - Total operating expenses for the quarter were $15.22 million, down from $24.56 million in 2024, a reduction of $9.34 million[141]. - Total operating expenses for the nine months ended September 30, 2025, were $59.5 million, a slight decrease of $1.1 million from $60.5 million in 2024[151]. - General and administrative expenses were $5.17 million in Q3 2025, down from $13.42 million in Q3 2024, a decrease of $8.25 million[146]. - General and administrative expenses increased to $33.2 million for the nine months ended September 30, 2025, up from $26.6 million in 2024, reflecting an increase of $6.6 million[156]. - The company recorded an impairment charge of $4.67 million for long-lived assets in Q3 2025, compared to no impairment in Q3 2024[147]. - The company reported an impairment of long-lived assets of $4.7 million for the nine months ended September 30, 2025, compared to no impairment in 2024[158]. Future Outlook and Financing - The company expects to finance future cash needs through public or private equity offerings, debt financings, collaborations, or licensing arrangements, as it does not anticipate positive cash flows from operations in the near future[112]. - The company anticipates that its existing cash and financial resources will fund operating expenses and capital requirements into the start of 2027[181]. - Future capital requirements will depend on various factors, including the success of product candidates and the ability to generate revenue[180]. - The company may require substantial additional financing in the future to meet unanticipated factors and operational needs[182]. - The company may face restrictions on claiming R&D tax credits if it no longer meets eligibility criteria, with unsurrendered UK losses able to be carried forward indefinitely[134]. Currency and International Operations - The company is subject to foreign currency exchange rate fluctuations, particularly with the euro, pound sterling, Swiss franc, and Australian dollar[190]. - The company has significant operating costs in the United Kingdom, exposing it to changes in the exchange ratio of the U.S. dollar and the pound sterling[192]. - A hypothetical 10% weakening of the U.S. dollar relative to the pound sterling would have materially affected current and projected expenses denominated in pound sterling[192]. - The company has no operations or suppliers based in conflict-affected regions, minimizing the impact of international conflicts on its business[121].
VACCITECH(VACC) - 2025 Q3 - Quarterly Report