HOOKIPA Pharma(US:HOOK)2021-11-10 12:27PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited financial statements show decreased assets and increased net loss, driven by higher operating cash outflows Condensed Consolidated Balance Sheets The balance sheet reflects a decline in total assets and stockholders' equity, primarily due to reduced cash and cash equivalents Condensed Consolidated Balance Sheet Data (in thousands) | | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $82,269 | $142,743 | | Total current assets | $118,577 | $171,504 | | Total assets | $142,172 | $187,817 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $26,638 | $21,143 | | Total liabilities | $34,086 | $31,694 | | Total stockholders' equity | $108,086 | $156,123 | | Total liabilities and stockholders' equity | $142,172 | $187,817 | Condensed Consolidated Statements of Operations and Comprehensive Loss The statement of operations shows a higher net loss, primarily driven by a significant increase in research and development expenses Statement of Operations Highlights (in thousands, except per share data) | | Nine months ended Sep 30, 2021 | Nine months ended Sep 30, 2020 | | :--- | :--- | :--- | | Revenue from collaboration and licensing | $14,553 | $14,421 | | Research and development | ($60,434) | ($39,099) | | General and administrative | ($13,746) | ($13,413) | | Loss from operations | ($59,627) | ($38,091) | | Net loss | ($54,430) | ($31,608) | | Net loss per share — basic and diluted | ($1.66) | ($1.23) | Condensed Consolidated Statements of Cash Flows Cash flow statement indicates a substantial increase in cash used in operating activities, leading to a significant overall decrease in cash Cash Flow Summary (in thousands) | | Nine months ended Sep 30, 2021 | Nine months ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($52,773) | ($28,038) | | Net cash used in investing activities | ($7,440) | ($1,866) | | Net cash provided by (used in) financing activities | $175 | ($1,656) | | Net decrease in cash, cash equivalents and restricted cash | ($60,038) | ($31,560) | Notes to Condensed Consolidated Financial Statements Notes detail the company's clinical-stage status, reliance on Gilead revenue, going concern assessment, and contractual obligations - The company is a clinical-stage biopharmaceutical firm developing immunotherapeutics based on its proprietary arenavirus platform30 - The company expects existing cash to fund operations for at least 12 months, but additional funding will be required for long-term development and commercialization goals3738 - All revenue is derived from a collaboration and license agreement with Gilead Sciences, Inc. for HBV and HIV programs6079 - As of September 30, 2021, the company had $10.5 million in non-cancellable obligations under contracts with Contract Manufacturing Organizations (CMOs)133 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's arenavirus platform, increased R&D expenses, and liquidity needs for future development Overview This section provides an overview of HOOKIPA's clinical-stage immunotherapy pipeline and the impact of COVID-19 on its operations - The company's oncology pipeline includes HB-200 (Phase 1/2 for HPV16+ cancers), HB-300 (IND filing expected Q3 2022), and HB-700 (preclinical for KRAS mutated cancers)152156 - The infectious disease pipeline includes HB-101 (Phase 2 for CMV, enrollment complete) and a collaboration with Gilead for HBV and HIV, with HB-101 requiring a partner for further pursuit158159 - The COVID-19 pandemic caused disruptions, including temporary suspension of patient enrollment for the HB-101 Phase 2 trial and supply chain impacts165166 Results of Operations Revenue remained stable, while a significant increase in R&D expenses, particularly for the HB-201/202 program, led to a higher net loss Results of Operations Summary (in thousands) | | Nine months ended Sep 30, 2021 | Nine months ended Sep 30, 2020 | | :--- | :--- | :--- | | Revenue from collaboration and licensing | $14,553 | $14,421 | | Research and development | ($60,434) | ($39,099) | | General and administrative | ($13,746) | ($13,413) | | Loss from operations | ($59,627) | ($38,091) | | Net loss | ($54,430) | ($31,608) | - The $21.3 million increase in R&D expenses was driven by increased direct and internal expenses, primarily due to HB-201/202 clinical trial progress204 Research and Development Expenses by Program (in thousands) | Program | Nine months ended Sep 30, 2021 | Nine months ended Sep 30, 2020 | | :--- | :--- | :--- | | HB-101 | $3,182 | $4,744 | | HB-201/202 | $17,915 | $7,005 | | Gilead partnered programs | $9,031 | $6,171 | | Other and earlier-stage programs | $9,335 | $6,340 | | Total direct expenses | $39,463 | $24,260 | Liquidity and Capital Resources The company holds $82.7 million in cash, expecting it to fund operations for 12 months, but anticipates needing substantial additional financing for long-term development - As of September 30, 2021, the company held $82.7 million in cash, cash equivalents, and restricted cash222 - The company expects existing cash and cash equivalents to fund operating expenses and capital requirements for at least the next 12 months237 - Net cash used in operating activities increased to $52.8 million from $28.0 million year-over-year, primarily due to a higher net loss240243 Contractual Obligations as of September 30, 2021 (in thousands) | Obligation Type | Total | Less Than 1 Year | 1 - 3 Years | 4 - 5 Years | | :--- | :--- | :--- | :--- | :--- | | Lease commitments | $4,592 | $1,994 | $2,598 | $0 | | CMO commitments | $10,448 | $7,165 | $3,252 | $31 | | Debt obligations | $6,213 | $3,124 | $3,089 | $0 | | Total | $21,253 | $12,283 | $8,939 | $31 | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces market risks primarily from foreign currency exchange rate fluctuations, particularly the euro, and interest rate changes - The company's primary market risks are foreign currency exchange rate fluctuations, specifically the euro, and changes in interest rates on its cash and cash equivalents257 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2021263 - No material changes in internal control over financial reporting were identified during the quarter264 PART II. OTHER INFORMATION Item 1. Legal Proceedings A third party filed an opposition to European Patent No. 3218504, exclusively licensed to the company, regarding its arenavirus platform technology - A third party has opposed European Patent No. 3218504, exclusively licensed to HOOKIPA, related to its replicating arenavirus platform technology used in product candidates like HB-201 and HB-202266 Item 1A. Risk Factors No material changes to risk factors were reported since the Annual Report on Form 10-K for the year ended December 31, 2020 - No material changes to risk factors were reported since the Annual Report on Form 10-K filed on March 18, 2021268 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the nine months ended September 30, 2021 - There were no unregistered sales of equity securities during the nine months ended September 30, 2021269 Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and XBRL data files - The report includes standard exhibits such as CEO and CFO certifications and XBRL interactive data files275