AC Immune(ACIU) - 2022 Q1 - Quarterly Report

Interim Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Balance Sheets (Unaudited) As of March 31, 2022, the company's total assets were CHF 235.5 million, a decrease from CHF 261.4 million at the end of 2021, primarily driven by a reduction in cash and cash equivalents, while total shareholders' equity also decreased to CHF 214.1 million from CHF 232.0 million, mainly due to accumulated losses during the period Condensed Consolidated Balance Sheet Summary (in CHF thousands) | Balance Sheet Items | As of March 31, 2022 | As of December 31, 2021 | | :--- | :--- | :--- | | Total Assets | 235,519 | 261,443 | | Total non-current assets | 58,461 | 58,809 | | Total current assets | 177,058 | 202,634 | | Cash and cash equivalents | 57,835 | 82,216 | | Total Shareholders' Equity and Liabilities | 235,519 | 261,443 | | Total Shareholders' Equity | 214,131 | 231,979 | | Accumulated losses | (218,793) | (200,942) | | Total Liabilities | 21,388 | 29,464 | | Total non-current liabilities | 9,477 | 9,438 | | Total current liabilities | 11,911 | 20,026 | Condensed Consolidated Statements of Income/(Loss) (Unaudited) For the three months ended March 31, 2022, the company reported zero contract revenue, consistent with the same period in 2021, with the operating loss increasing to CHF 18.8 million from CHF 17.3 million year-over-year due to higher research and development expenses, resulting in a net loss of CHF 18.8 million and a loss per share of CHF (0.23), unchanged from the prior year Statement of Income/(Loss) Summary (in CHF thousands) | Metric | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Total Revenue | — | — | | Research & development expenses | (15,123) | (13,329) | | General & administrative expenses | (4,166) | (4,338) | | Operating loss | (18,830) | (17,251) | | Loss for the period | (18,848) | (16,734) | | Basic and diluted loss per share | (0.23) | (0.23) | Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) For the first quarter of 2022, the total comprehensive loss was CHF 18.8 million, composed of the net loss for the period of CHF 18.8 million, slightly offset by a CHF 10 thousand positive currency translation difference, while in the same period of 2021, the total comprehensive loss equaled the net loss of CHF 16.7 million Statement of Comprehensive Income/(Loss) (in CHF thousands) | Item | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Loss for the period | (18,848) | (16,734) | | Other comprehensive income/(loss) | 10 | — | | Total comprehensive loss, net of tax | (18,838) | (16,734) | Condensed Consolidated Statements of Changes in Equity (Unaudited) Shareholders' equity decreased from CHF 232.0 million at the start of 2022 to CHF 214.1 million as of March 31, 2022, primarily driven by the total comprehensive loss of CHF 18.8 million for the period, which was slightly offset by share-based payments of CHF 1.0 million Changes in Equity for Q1 2022 (in CHF thousands) | Description | Amount | | :--- | :--- | | Balance as of January 1, 2022 | 231,979 | | Total comprehensive loss | (18,838) | | Share-based payments | 989 | | Issuance of shares, net | 1 | | Balance as of March 31, 2022 | 214,131 | Condensed Consolidated Statements of Cash Flows (Unaudited) In the first quarter of 2022, the company used CHF 23.1 million in cash for operating activities, an increase from CHF 17.3 million in the prior-year period, while investing activities used CHF 0.5 million and financing activities used CHF 0.9 million, resulting in a net decrease in cash and cash equivalents of CHF 24.6 million, with the balance falling to CHF 57.8 million at the end of the period Cash Flow Summary (in CHF thousands) | Cash Flow Activity | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash flows used in operating activities | (23,143) | (17,339) | | Net cash flows used in investing activities | (540) | (790) | | Net cash flows (used in)/provided by financing activities | (916) | 7,707 | | Net decrease in cash and cash equivalents | (24,599) | (10,422) | | Cash and cash equivalents at end of period | 57,835 | 151,092 | Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) Corporate Information AC Immune SA is a clinical-stage biopharmaceutical company founded in 2003, focused on developing medicines and diagnostics for neurodegenerative diseases (NDD) like Alzheimer's and Parkinson's, with a strategy built on a three-pillar approach targeting AD, non-AD NDD, and diagnostics, utilizing its two proprietary technology platforms: SupraAntigen (biologics) and Morphomer (small molecules) - The company is a clinical-stage biopharmaceutical firm specializing in neurodegenerative diseases (NDD) associated with protein misfolding[11] - Corporate strategy is based on three pillars: (i) Alzheimer's Disease (AD), (ii) non-AD NDD (including Parkinson's, ALS, NeuroOrphan indications), and (iii) diagnostics[11] - Utilizes two proprietary technology platforms: SupraAntigen® for conformation-specific biologics and Morphomer® for conformation-specific small molecules[11] Basis of Preparation and Accounting Policies The financial statements are prepared in accordance with IAS 34 and are presented in Swiss Francs (CHF), with the company asserting it has sufficient cash (CHF 57.8 million) and short-term financial assets (CHF 116.0 million) to operate as a going concern for at least 12 months from March 31, 2022, and key accounting estimates involve revenue recognition, clinical accruals, and valuation of its IPR&D asset - The financial statements have been prepared in accordance with International Accounting Standard 34 (IAS 34), Interim Financial Reporting[13] - The company has been prepared on a going-concern basis, with a cash position of CHF 57.8 million and short-term financial assets of CHF 116.0 million as of March 31, 2022[23] - Critical accounting judgments and estimates relate to revenue recognition, clinical development accruals, share-based compensation, and the IPR&D asset[19] Contract Revenues The company generated no contract revenues for the three months ended March 31, 2022 and 2021, but recognized grant income of CHF 0.4 million from the Michael J. Fox Foundation and less than CHF 0.1 million from the Target ALS Foundation during the first quarter of 2022 - For the three months ended March 31, 2022 and 2021, AC Immune generated no contract revenues[26] - There were no significant events or transactions related to license and collaboration agreements in Q1 2022[28] - In Q1 2022, the company recognized CHF 0.4 million in grant income from the Michael J. Fox Foundation and less than CHF 0.1 million from the Target ALS Foundation[30][31] Loss Per Share Basic and diluted loss per share for the first quarter of 2022 was CHF (0.23), identical to the same period in 2021, with the net loss attributable to shareholders being CHF 18.8 million, calculated on a higher weighted-average number of shares (83.5 million) compared to the prior year (72.3 million) Loss Per Share Calculation | Item | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net loss attributable to equity holders (CHF thousands) | (18,848) | (16,734) | | Weighted-average shares outstanding | 83,486,354 | 72,305,949 | | Basic and diluted loss per share (CHF) | (0.23) | (0.23) | - Potentially dilutive securities, including 199,636 share options and 521 restricted share awards, were excluded from the calculation as they would be anti-dilutive[33][34] Property, Plant and Equipment The carrying amount of property, plant, and equipment decreased slightly from CHF 5.1 million to CHF 4.9 million during the first quarter of 2022, with the company investing CHF 0.2 million in lab and IT equipment, while depreciation for the period was CHF 0.5 million Movement in Property, Plant and Equipment (in CHF thousands) | Item | December 31, 2021 | Additions | Depreciation | March 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Carrying Amount | 5,116 | 252 | (460) | 4,908 | Right-of-Use Assets and Lease Liabilities The net book value of right-of-use assets, primarily for buildings, decreased to CHF 2.8 million from CHF 2.9 million due to depreciation of CHF 0.14 million in Q1 2022, with total cash outflow for leases during the quarter being CHF 0.33 million, and the company having undiscounted lease obligations of CHF 2.9 million Lease Impact on Income Statement (in CHF thousands) | Expense Item | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Depreciation of right-of-use assets | 140 | 107 | | Interest expense on lease liabilities | 18 | 14 | | Expense for short-term/low value leases | 174 | 187 | | Total | 332 | 308 | - Total undiscounted cash flows for lease obligations as of March 31, 2022, amount to CHF 2.94 million[40] Accrued Expenses Accrued expenses decreased significantly from CHF 16.7 million at year-end 2021 to CHF 10.6 million as of March 31, 2022, with the reduction primarily due to a CHF 3.7 million payment related to a cost-sharing arrangement with Janssen and a CHF 2.3 million payment for performance-related remuneration Accrued Expenses (in CHF thousands) | Date | Amount | | :--- | :--- | | As of December 31, 2021 | 16,736 | | As of March 31, 2022 | 10,571 | - The decrease is mainly due to payments of CHF 3.7 million for a cost sharing arrangement with Janssen and CHF 2.3 million for performance-related remuneration[41] Intangible Assets The company holds a single intangible asset: an acquired In-Process Research and Development (IPR&D) asset for a Parkinson's disease vaccine candidate, with its carrying value remaining unchanged at CHF 50.4 million as of March 31, 2022, and the asset is not yet being amortized as it has not obtained market approval, and no impairment was identified during the period - The company's intangible asset is an acquired IPR&D asset, a clinically-validated active vaccine candidate for Parkinson's disease, with a carrying value of CHF 50.4 million[42] - The asset is not currently being amortized because it is not yet ready for use pending market approval[42] - The IPR&D asset was reviewed for impairment in accordance with IAS 36 and was not determined to be impaired as of March 31, 2022[42] Prepaid Expenses Prepaid expenses, consisting of prepaid R&D, administrative, and insurance costs, totaled CHF 2.8 million as of March 31, 2022, representing a slight decrease from CHF 3.0 million at the end of 2021 - Prepaid expenses totaled CHF 2.8 million as of March 31, 2022, compared to CHF 3.0 million as of December 31, 2021[43] Cash, Cash Equivalents, and Short-Term Financial Assets As of March 31, 2022, the company held CHF 57.8 million in cash and cash equivalents and CHF 116.0 million in short-term financial assets, with the cash balance decreasing from CHF 82.2 million at the end of 2021, while short-term financial assets remained unchanged Cash and Financial Assets (in CHF thousands) | Asset Type | As of March 31, 2022 | As of December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | 57,835 | 82,216 | | Short-term financial assets | 116,000 | 116,000 | Treasury Shares As of March 31, 2022, AC Immune held 6,221,617 treasury shares in relation to its at-the-market offering program - As of March 31, 2022, the Company has 6,221,617 treasury shares remaining[45] Finance Result, Net For the first quarter of 2022, the company recorded a net financial loss of less than CHF 0.1 million, a shift from a net financial gain of CHF 0.5 million in the same period of 2021, with the change primarily driven by lower foreign currency gains (CHF 0.1 million in Q1 2022 vs. CHF 0.5 million in Q1 2021) - In Q1 2022, the company recorded a net financial loss of less than CHF 0.1 million, compared to a net financial gain of CHF 0.5 million in Q1 2021[46] - The result was driven by foreign currency gains of CHF 0.1 million and interest expense of CHF 0.2 million in Q1 2022[46] Subsequent Events Management evaluated events occurring after the balance sheet date through the issuance of the financial statements and determined there were no events that required recognition or disclosure - The company has determined that there were no subsequent events that warrant disclosure or recognition in these Interim Condensed Consolidated Financial Statements[48]