HOOKIPA Pharma(HOOK) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) In Q1 2022, the company reported a net loss, while cash and equivalents significantly increased due to financing activities and a Gilead payment Condensed Consolidated Balance Sheets Balance Sheet Summary (as of March 31, 2022 vs. December 31, 2021) | Metric (in thousands) | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $ 140,825 | $ 65,921 | | Total current assets | $ 171,079 | $ 102,135 | | Total assets | $ 195,711 | $ 126,045 | | Liabilities & Equity | | | | Total current liabilities | $ 31,228 | $ 27,654 | | Total liabilities | $ 47,782 | $ 36,453 | | Total stockholders' equity | $ 147,929 | $ 89,592 | Condensed Consolidated Statements of Operations and Comprehensive Loss Statement of Operations Summary (Three Months Ended March 31) | Metric (in thousands, except per share) | 2022 | 2021 | | :--- | :--- | :--- | | Revenue from collaboration and licensing | $ 1,445 | $ 5,301 | | Research and development | $ (16,620) | $ (20,164) | | General and administrative | $ (4,972) | $ (4,309) | | Loss from operations | $ (20,147) | $ (19,172) | | Net loss | $ (17,968) | $ (17,238) | | Net loss per share — basic and diluted | $ (0.40) | $ (0.53) | Condensed Consolidated Statements of Cash Flows Cash Flow Summary (Three Months Ended March 31) | Activity (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $ 1,733 | $ (14,397) | | Net cash used in investing activities | $ (1,828) | $ (330) | | Net cash provided by financing activities | $ 75,293 | $ 101 | - Financing activities in Q1 2022 were primarily driven by $29.6 million from the issuance of convertible preferred stock and $45.7 million from the issuance of common stock, net of costs[26] Notes to Condensed Consolidated Financial Statements - The company is a clinical-stage biopharmaceutical company developing immunotherapeutics based on its proprietary arenavirus platform[28] - The company expects its current cash and cash equivalents to be sufficient to fund operating expenses, capital expenditures, and debt service payments for at least 12 months from the report's filing date (May 16, 2022)[35] - In February 2022, the company signed an Amended and Restated Collaboration Agreement with Gilead for its HIV program, receiving a $15.0 million program initiation fee[76][77] - In March 2022, the company closed a public offering of common stock and Series A-1 convertible preferred stock, raising net proceeds of $70.2 million[99] - In February 2022, Gilead purchased 1,666,666 unregistered shares of the company's common stock for $5.0 million, as part of a stock purchase agreement for up to $35.0 million[98] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2022 revenue and R&D expense changes driven by collaboration and program costs, noting significant liquidity improvement from recent financing activities Overview - The company is focusing its proprietary immuno-oncology pipeline on three main programs: HB-200 for HPV16+ cancers, HB-300 for prostate cancer, and HB-700 for KRAS mutated cancers[138] - The HB-101 (CMV vaccine) program will only be advanced further if a collaboration partner is secured, allowing for a greater strategic focus on immuno-oncology[141] - The COVID-19 pandemic caused disruptions, including temporary suspension of patient enrollment for the HB-101 trial and impacts on the supply chain, leading to a temporary focus on the core HB-200 program[150][152] Results of Operations - Revenue decreased by $3.9 million in Q1 2022 compared to Q1 2021, primarily due to lower cost reimbursements under the Gilead collaboration agreement[178] Research and Development Expenses by Program (in thousands) | Program | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | HB-200 program | $ 7,413 | $ 9,754 | | HB-300 program | $ 2,767 | $ 1,250 | | Gilead partnered programs | $ 1,733 | $ 4,820 | | Other and earlier-stage programs | $ 4,089 | $ 3,643 | | Total R&D Expenses | $ 16,620 | $ 20,164 | - The decrease in R&D expenses was mainly driven by lower manufacturing costs for the HB-200 and Gilead programs, and lower clinical study expenses for the HB-101 program following the completion of patient enrollment[182] - General and administrative expenses increased by $0.7 million, primarily due to a $0.7 million increase in professional and consulting fees and a $0.2 million increase in personnel-related expenses[184] Liquidity and Capital Resources - As of March 31, 2022, the company had cash, cash equivalents, and restricted cash of $141.8 million[192] - The company believes its existing cash will be sufficient to fund operating expenses and capital expenditure requirements for at least the next 12 months[208] - As of March 31, 2022, the company had total non-cancellable obligations of $8.1 million under contracts with contract manufacturing organizations (CMOs)[195] Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from foreign currency exchange rate fluctuations, particularly the euro, and interest rate changes on cash and equivalents - The company is subject to risk from foreign currency exchange rate fluctuations, specifically with respect to the euro, and changes in interest rates on its cash and cash equivalents[226] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting during the quarter - Management, including the Principal Executive Officer and Principal Financial Officer, concluded that the company's disclosure controls and procedures were effective as of March 31, 2022[231] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[232] PART II. OTHER INFORMATION Legal Proceedings The company is involved in a pending patent opposition proceeding concerning European Patent No. 3218504, which covers its replicating arenavirus platform technology - A third party has opposed European Patent No. 3218504, exclusively licensed to the company and related to its replicating arenavirus platform technology, used for product candidates like HB-201 and HB-202[234] Risk Factors No material changes to previously disclosed risk factors, though future inflationary pressures could negatively impact the business - There have been no material changes from the risk factors disclosed in the Annual Report on Form 10-K filed on March 24, 2022[236] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the three months ended March 31, 2022 - There were no unregistered sales of equity securities by the company during the three months ended March 31, 2022[238] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[239] Mine Safety Disclosures This item is not applicable to the company - Not applicable[240] Other Information The company reported no other information for this item - None[241] Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including agreements with Gilead and officer certifications - The exhibits filed with the report include the amended collaboration agreement with Gilead, the stock purchase agreement with Gilead, and officer certifications[243][244]