AC Immune(ACIU) - 2023 Q3 - Quarterly Report

Financial Statements (Unaudited) This section provides the unaudited condensed consolidated financial statements, offering a snapshot of the company's financial position, performance, and cash flows Condensed Consolidated Balance Sheets (Unaudited) As of September 30, 2023, the company's total assets and shareholders' equity decreased compared to December 31, 2022, while total liabilities slightly increased, primarily due to a significant reduction in short-term financial assets Condensed Consolidated Balance Sheets (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | September 30, 2023 | December 31, 2022 | | :-------------------------------- | :----------------- | :---------------- | | Assets | | | | Total non-current assets | 56,807 | 57,844 | | Total current assets | 86,179 | 128,094 | | Total assets | 142,986 | 185,938 | | Shareholders' equity and liabilities | | | | Total shareholders' equity | 125,664 | 168,991 | | Total non-current liabilities | 5,612 | 5,466 | | Total current liabilities | 11,710 | 11,481 | | Total liabilities | 17,322 | 16,947 | | Total shareholders' equity and liabilities | 142,986 | 185,938 | - As of September 30, 2023, the company's total assets were 142,986 Thousand Swiss Francs, a 23.1% decrease from 185,938 Thousand Swiss Francs as of December 31, 2022[2] - Short-term financial assets significantly decreased from 91,000 Thousand Swiss Francs as of December 31, 2022, to 48,000 Thousand Swiss Francs as of September 30, 2023, representing a 47.3% decrease[2] Condensed Consolidated Statements of Income/(Loss) (Unaudited) For the three and nine months ended September 30, 2023, the company reported no contract revenue, and while operating expenses decreased, operating and net losses widened for the three-month period but narrowed for the nine-month period Condensed Consolidated Statements of Income/(Loss) (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Total revenue | — | 3,934 | — | 3,934 | | Operating loss | (15,466) | (13,463) | (50,083) | (52,150) | | Loss for the period | (15,143) | (13,516) | (49,489) | (52,004) | | Basic and diluted loss per share | (0.18) | (0.16) | (0.59) | (0.62) | - For the three and nine months ended September 30, 2023, the company's contract revenue was zero, compared to 3,934 Thousand Swiss Francs in the prior year periods[5] - For the nine months ended September 30, 2023, operating loss narrowed from (52,150) Thousand Swiss Francs in the prior year period to (50,083) Thousand Swiss Francs, and net loss narrowed from (52,004) Thousand Swiss Francs to (49,489) Thousand Swiss Francs[5] Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) For the three and nine months ended September 30, 2023, the company's comprehensive loss was primarily driven by net loss, with foreign exchange differences and remeasurement gains on defined benefit plans also impacting comprehensive income Condensed Consolidated Statements of Comprehensive Income/(Loss) (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Loss for the period | (15,143) | (13,516) | (49,489) | (52,004) | | Foreign exchange differences | 11 | 23 | (5) | 72 | | Remeasurement gains on defined benefit plans | — | 178 | — | 7,559 | | Total comprehensive loss | (15,132) | (13,315) | (49,494) | (44,373) | - Total comprehensive loss for the nine months ended September 30, 2023, was (49,494) Thousand Swiss Francs, an increase from (44,373) Thousand Swiss Francs in the prior year period[6] Condensed Consolidated Statements of Changes in Equity (Unaudited) As of September 30, 2023, the company's total shareholders' equity decreased from the beginning of the year, primarily due to the net loss for the period, while equity-settled share-based payments and treasury share sales also impacted equity Condensed Consolidated Statements of Changes in Equity (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | Balance as of January 1, 2023 | Balance as of September 30, 2023 | | :-------------------------------- | :---------------------------- | :------------------------------- | | Share capital | 1,797 | 1,802 | | Share premium | 431,323 | 434,451 | | Treasury shares | (124) | (106) | | Accumulated deficit | (264,015) | (310,488) | | Foreign exchange differences | 10 | 5 | | Total | 168,991 | 125,664 | - Total shareholders' equity was 125,664 Thousand Swiss Francs as of September 30, 2023, a 25.7% decrease from 168,991 Thousand Swiss Francs as of January 1, 2023[7] - For the first nine months of 2023, the company recognized 3,568 Thousand Swiss Francs for equity-settled share-based payments and generated 2,540 Thousand Swiss Francs in net proceeds from the sale of treasury shares[7] Condensed Consolidated Statements of Cash Flows (Unaudited) For the nine months ended September 30, 2023, the company saw reduced cash outflow from operating activities, a significant increase in cash inflow from investing activities, and a shift from cash outflow to inflow in financing activities, resulting in a net increase in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Net cash outflow from operating activities | (44,217) | (56,161) | | Net cash inflow from investing activities | 42,365 | 18,804 | | Net cash inflow/(outflow) from financing activities | 2,222 | (1,195) | | Net increase/(decrease) in cash and cash equivalents | 370 | (38,552) | | Cash and cash equivalents at end of period | 31,927 | 44,503 | - Net cash outflow from operating activities for the nine months ended September 30, 2023, was (44,217) Thousand Swiss Francs, an improvement from (56,161) Thousand Swiss Francs in the prior year period[9] - Net cash inflow from investing activities significantly increased from 18,804 Thousand Swiss Francs in the prior year period to 42,365 Thousand Swiss Francs, primarily driven by net proceeds from maturities of short-term financial assets[9] Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) This section details the notes to the interim condensed consolidated financial statements, providing essential context and explanations for the reported financial figures and accounting policies 1. Corporate information AC Immune SA, founded in 2003, is a clinical-stage biopharmaceutical company focused on developing innovative therapeutics and diagnostics for neurodegenerative diseases using proprietary technology platforms - AC Immune SA was founded in 2003 as a clinical-stage biopharmaceutical company[13] - The company leverages its proprietary SupraAntigen and Morphomer technology platforms to discover, design, and develop therapeutics and diagnostics for protein misfolding-related neurodegenerative diseases, including Alzheimer's, Parkinson's, ALS, and neuro-orphan indications[14] 2. Basis of preparation and changes to the Company's accounting policies These interim condensed consolidated financial statements are prepared in accordance with IAS 34, using the historical cost convention and Swiss Francs as the reporting currency, with management affirming the company's going concern ability - These interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 (IAS 34), Interim Financial Reporting[16] - The financial statements are prepared under the historical cost convention and presented in Swiss Francs (CHF), the Group's reporting currency[17][18] - Management believes that as of September 30, 2023, with a cash position of 31.9 million Swiss Francs and short-term financial assets of 48.0 million Swiss Francs, the company can meet all its obligations over the next 12 months, thus preparing the financial statements on a going concern basis[24] Critical judgments and accounting estimates Management made key judgments and accounting estimates in areas such as accrued expenses for clinical development, employee defined benefit liabilities, and the valuation of IPR&D assets - The company made judgments, estimates, and assumptions in areas such as accrued expenses for clinical development, net employee defined benefit liabilities, share-based payments, right-of-use assets, short-term and long-term lease liabilities, and IPR&D assets[21] Fair value of financial assets and liabilities The fair value of the company's financial assets and liabilities approximates their carrying amounts due to their short-term nature and classification at amortized cost under IFRS 9 - The fair value of the company's financial assets and liabilities approximates their carrying amounts due to the short-term nature of these financial instruments and their classification at amortized cost under IFRS 9[22] Accounting policies, new standards, interpretations and amendments adopted by the Company The company's accounting policies remain consistent with the prior year, with no new IFRS standards or amendments adopted that are expected to have a significant impact - The accounting policies adopted by the company are consistent with those applied in the annual consolidated financial statements as of December 31, 2022, with no new IFRS standards, amendments, or interpretations issued but not yet effective having been adopted, and no significant impact is expected on current or future reporting periods[22][23] Going concern The company primarily funds its operations through public offerings, equity issuances, licensing agreements, and grants, while facing various risks related to project success and capital raising - The company primarily meets its cash requirements through public offerings, equity issuances, contractual revenue from licensing and collaboration agreements, and grants[25] - Risks faced by the company include uncertainty of project success, ability to raise additional capital, maintaining patent position, establishing collaborations, successfully advancing product candidates into clinical development, and attracting and retaining key personnel[25] 3. Contract revenues and other operating income For the three and nine months ended September 30, 2023, the company generated no contract revenue, unlike the prior year, but saw an increase in grant income during the same period - AC Immune generated no contract revenue for the three and nine months ended September 30, 2023, compared to 3.9 million Swiss Francs in the prior year periods[26] - Grant income recognized for the nine months ended September 30, 2023, was 1.0 million Swiss Francs, an increase from 0.8 million Swiss Francs in the prior year period[31] 3.1 Licensing and collaboration agreements No significant events or transactions occurred under the company's licensing and collaboration agreements for the three and nine months ended September 30, 2023, unlike the prior year which included milestone revenue - No significant events or transactions occurred under the company's licensing and collaboration agreements for the three and nine months ended September 30, 2023[28] - In September 2022, the company recognized 4 million Euros (3.9 million Swiss Francs) in milestone revenue from its collaboration with Life Molecular Imaging (LMI) for the Tau PET tracer PI-2620 entering late-stage development for Alzheimer's disease[28] 3.2 Grant income The company received follow-on and new grants from the Michael J. Fox Foundation in 2022 and 2023, supporting the development of its diagnostic programs - In August 2022, the company received a follow-on grant of 0.5 million US Dollars (0.5 million Swiss Francs) from the Michael J. Fox Foundation (MJFF) to continue development of its alpha-synuclein PET imaging diagnostic[30] - In February 2023, the company received a new grant of 0.5 million US Dollars (0.5 million Swiss Francs) from MJFF to support its TDP-43 PET tracer program development[30] 4. Loss per share For the three months ended September 30, 2023, basic and diluted loss per share increased, while for the nine-month period, it decreased, consistent with the trend in net loss for the period Loss per share (Thousand Swiss Francs) | Indicator | Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | | :--------------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Net loss attributable to equity holders (Thousand Swiss Francs) | (15,143) | (13,516) | (49,489) | (52,004) | | Weighted average shares outstanding used in computing loss per share | 84,715,515 | 83,590,948 | 84,012,166 | 83,537,655 | | Basic and diluted loss per share | (0.18) | (0.16) | (0.59) | (0.62) | - Basic and diluted loss per share for the three months ended September 30, 2023, was (0.18) Swiss Francs, an increase from (0.16) Swiss Francs in the prior year period[32] - Basic and diluted loss per share for the nine months ended September 30, 2023, was (0.59) Swiss Francs, a decrease from (0.62) Swiss Francs in the prior year period[32] 5. Property, plant and equipment As of September 30, 2023, the net book value of the company's property, plant, and equipment decreased, yet it continued to invest in laboratory and IT infrastructure to support R&D functions Property, plant and equipment (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | December 31, 2022 | September 30, 2023 | | :-------------------------------- | :---------------- | :----------------- | | Acquisition cost | 13,602 | 14,206 | | Accumulated depreciation | (9,343) | (10,579) | | Net book value | 4,259 | 3,627 | - The net book value of property, plant, and equipment was 3,627 Thousand Swiss Francs as of September 30, 2023, a decrease from 4,259 Thousand Swiss Francs as of December 31, 2022[36] - The company invested 0.6 million Swiss Francs in laboratory and IT equipment, representing a 5.3% increase from the beginning of the year, to support its R&D functions[36] 6. Right-of-use assets, long-term financial assets and lease liabilities As of September 30, 2023, the net book value of the company's right-of-use assets decreased due to depreciation, with no new right-of-use lease assets added during the period, and lease liability cash outflows and related expenses remained stable Right-of-use assets (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | December 31, 2022 | September 30, 2023 | | :-------------------------------- | :---------------- | :----------------- | | Net book value of right-of-use assets | 2,808 | 2,403 | - No new right-of-use lease assets were added, and their net book value decreased to 2,403 Thousand Swiss Francs due to depreciation[37][38] - Total lease cash outflows for the nine months ended September 30, 2023, were 1,075 Thousand Swiss Francs, largely consistent with 1,037 Thousand Swiss Francs in the prior year period[40] 7. Net employee defined benefit liabilities For the nine months ended September 30, 2023, the company recognized service costs related to its employee defined benefit plans - For the nine months ended September 30, 2023, the company recorded 0.6 million Swiss Francs in service costs in the condensed consolidated statements of income/(loss), including current service costs and those related to the 2023 plan amendment impact[42] 8. Accrued expenses As of September 30, 2023, the company's accrued expenses were slightly lower than December 31, 2022, primarily comprising R&D costs, personnel expenses, and other accrued items Accrued expenses (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | September 30, 2023 | December 31, 2022 | | :-------------------------------- | :----------------- | :---------------- | | Total accrued expenses | 9,338 | 9,417 | - Accrued expenses include accrued research and development costs, accrued personnel expenses, and other accrued expenses[43] 9. Intangible assets The company holds an acquired IPR&D asset, a clinically validated active vaccine candidate for Parkinson's disease, which is not yet in use and thus not amortized, with no impairment indicators identified as of the reporting period Intangible assets (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | September 30, 2023 | December 31, 2022 | | :-------------------------------- | :----------------- | :---------------- | | Acquired IPR&D assets | 50,416 | 50,416 | | Total intangible assets | 50,416 | 50,416 | - AC Immune's acquired IPR&D asset is a clinically validated active vaccine candidate for the treatment of Parkinson's disease[44] - The asset has not yet received market approval and is therefore not amortized, with no triggering events identified as of September 30, 2023, that would indicate impairment of this IPR&D asset[44][45] 10. Prepaid expenses As of September 30, 2023, the company's prepaid expenses increased, primarily consisting of prepaid R&D and administrative costs Prepaid expenses (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | September 30, 2023 | December 31, 2022 | | :-------------------------------- | :----------------- | :---------------- | | Total prepaid expenses | 5,534 | 4,708 | - Prepaid expenses include prepaid research and development costs and administrative costs[46] 11. Cash and cash equivalents and short-term financial assets As of September 30, 2023, the company's cash and cash equivalents slightly increased, while short-term financial assets significantly decreased, reflecting changes in its investment portfolio Cash and cash equivalents and short-term financial assets (Thousand Swiss Francs) | Indicator (Thousand Swiss Francs) | September 30, 2023 | December 31, 2022 | | :-------------------------------- | :----------------- | :---------------- | | Cash and cash equivalents | 31,927 | 31,586 | | Short-term financial assets | 48,000 | 91,000 | - Short-term financial assets decreased from 91,000 Thousand Swiss Francs as of December 31, 2022, to 48,000 Thousand Swiss Francs as of September 30, 2023[48] - Net proceeds from maturities of short-term financial asset investments for the nine months ended September 30, 2023, were 43.0 million Swiss Francs, an increase from 20.0 million Swiss Francs in the prior year period[48] 12. Treasury shares During the second and third quarters of 2023, the company generated net proceeds from the sale of treasury shares, resulting in a reduction in the number of treasury shares held at the end of the reporting period - In the second quarter of 2023, the company sold 712,993 treasury ordinary shares, generating net proceeds of 2.3 million US Dollars (2.1 million Swiss Francs)[50] - In the third quarter of 2023, the company sold 205,015 treasury ordinary shares, generating net proceeds of 0.6 million US Dollars (0.6 million Swiss Francs)[50] - As of September 30, 2023, the company held 5,296,013 treasury shares, a decrease from 6,214,021 shares as of December 31, 2022[50] 13. Subsequent events Management has evaluated subsequent events up to the date of issuance of these interim condensed consolidated financial statements and found no material events requiring disclosure or recognition - Management has evaluated subsequent events up to the date of issuance of these interim condensed consolidated financial statements and found no material events requiring disclosure or recognition[51]