Adagio(US:IVVD)2022-11-10 21:26PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Invivyd, Inc. as of September 30, 2022, and for the three and nine-month periods then ended Condensed Consolidated Balance Sheets The balance sheet as of September 30, 2022, shows a decrease in total assets to $424.7 million from $620.1 million at year-end 2021, primarily driven by a reduction in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $278,152 | $542,224 | | Total current assets | $421,596 | $616,711 | | Total assets | $424,747 | $620,091 | | Total current liabilities | $46,126 | $62,060 | | Total liabilities | $47,304 | $62,072 | | Total stockholders' equity | $377,443 | $558,019 | Condensed Consolidated Statements of Operations and Comprehensive Loss For the three and nine months ended September 30, 2022, the company reported net losses of $45.1 million and $196.7 million, respectively, with no revenue and operating expenses driven by R&D and SG&A costs Statement of Operations Summary (in thousands) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $30,131 | $45,366 | $159,295 | $114,465 | | Selling, general and administrative | $13,200 | $11,052 | $36,524 | $21,853 | | Total operating expenses | $47,331 | $60,418 | $199,819 | $143,818 | | Net loss | $(45,087) | $(60,375) | $(196,743) | $(143,748) | | Net loss per share | $(0.42) | $(0.98) | $(1.82) | $(7.06) | Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2022, net cash used in operating activities was $172.6 million, leading to a $264.1 million decrease in cash and equivalents, ending at $278.2 million Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(172,583) | $(111,524) | | Net cash used in investing activities | $(91,854) | $(188,627) | | Net cash provided by financing activities | $365 | $663,432 | | Net (decrease) increase in cash | $(264,072) | $363,281 | | Cash and cash equivalents at end of period | $278,152 | $478,269 | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's biopharmaceutical business, accounting policies, product pipeline, significant license agreements, and manufacturing commitments - The company is a biopharmaceutical firm developing antibodies for viral respiratory diseases, with its lead candidates being NVD200 and adintrevimab for COVID-19363738 - The company has a history of losses, with a net loss of $196.7 million for the nine months ended September 30, 2022, and an accumulated deficit of $488.9 million; it expects existing cash to fund operations for at least 12 months from the report's issuance date46 - The company has multiple agreements with Adimab, including an Assignment Agreement, a Collaboration Agreement, and a Platform Transfer Agreement, involving upfront payments, milestone payments, and potential royalties778795 - In April 2022, the company reduced its minimum noncancelable purchase obligations with WuXi for adintrevimab manufacturing by $107.8 million, from $159.4 million to $51.6 million, with a remaining commitment of $18.1 million as of September 30, 2022119120 Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results, detailing business overview, financial results analysis, liquidity, capital resources, and funding requirements Overview Invivyd is a biopharmaceutical company focused on developing antibodies for viral respiratory diseases, with lead candidates NVD200 and adintrevimab, and has incurred significant losses since inception - The company's lead product candidate is NVD200, a combination of two monoclonal antibodies, with clinical trials planned to start in Q1 2023186 - The company's other key candidate, adintrevimab, showed clinically meaningful results in Phase 3 trials against pre-Omicron variants but has markedly reduced activity against currently circulating Omicron sublineages, causing a pause in its EUA request submission187192 - The company has incurred a net loss of $196.7 million for the nine months ended September 30, 2022, and had an accumulated deficit of $488.9 million as of that date202 Results of Operations Operating results show decreased Q3 2022 R&D expenses due to lower adintrevimab costs, offset by NVD200 spending, while nine-month R&D and SG&A expenses increased due to earlier manufacturing and public company costs Research & Development Expenses Breakdown (in thousands) | Expense Category | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Adintrevimab | $6,248 | $31,878 | $107,044 | $90,561 | | NVD200 | $11,837 | $0 | $11,837 | $0 | | Personnel-related costs | $9,701 | $6,857 | $28,410 | $14,457 | | Total R&D Expenses | $30,131 | $45,366 | $159,295 | $114,465 | - The $15.3 million decrease in Q3 R&D expenses was primarily due to a $25.6 million reduction in direct costs for the adintrevimab program, as manufacturing ramped down and trial enrollment was paused; this was partially offset by $11.8 million in new spending for the NVD200 program225226 - SG&A expenses increased by $2.1 million in Q3 2022 and $14.6 million in the first nine months of 2022, primarily due to higher professional fees and personnel costs associated with operating as a public company229236 - Acquired In-Process R&D (IPR&D) expenses were $4.0 million in Q3 2022, related to Adimab agreements, consistent with $4.0 million in Q3 2021, which was a milestone payment for adintrevimab227228 Liquidity and Capital Resources As of September 30, 2022, the company had $418.7 million in cash and marketable securities, with existing capital estimated to fund operations into Q2 2024, primarily from preferred stock sales and its August 2021 IPO - The company had cash, cash equivalents, and marketable securities of $418.7 million as of September 30, 2022239 - Management estimates that existing cash resources are sufficient to fund operating expenses and capital expenditure requirements into the second quarter of 2024207247 Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(172,583) | $(111,524) | | Net cash used in investing activities | $(91,854) | $(188,627) | | Net cash provided by financing activities | $365 | $663,432 | Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Invivyd is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Invivyd is not required to provide quantitative and qualitative disclosures about market risk254 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2022, with no material changes in internal control over financial reporting during the quarter - Management concluded that as of September 30, 2022, the company's disclosure controls and procedures were effective255 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls256 PART II. OTHER INFORMATION Legal Proceedings As of the reporting date, the company is not a party to any material legal proceedings - The company is not currently involved in any material legal proceedings259 Risk Factors This section outlines principal risks and uncertainties that could materially affect the company's business, financial condition, and results of operations, categorized by financial, product development, manufacturing, commercialization, intellectual property, and regulatory areas Summary of Risk Factors This summary highlights key financial risks including significant losses and funding needs, product development uncertainties like regulatory approval for adintrevimab against new variants, reliance on contract manufacturers, and competition - Financial Risks: The company has a history of significant losses, expects to incur more, and will need substantial additional funding to continue operations11 - Product Development Risks: All product candidates are in development, with uncertainty whether adintrevimab will neutralize future variants and receive an EUA, and newly emerging variants could reduce antibody effectiveness11 - Manufacturing and Commercialization Risks: The company relies on contract manufacturers for complex monoclonal antibody production and faces significant competition from existing and developing COVID-19 therapies1214 Risks Related to Financial Position and Capital Needs The company has a history of significant operating losses and requires substantial additional funding to pursue its objectives, with current cash estimated to last into Q2 2024, but failure to raise capital could curtail operations - The company has incurred significant losses since inception, with an accumulated deficit of $488.9 million as of September 30, 2022, and expects to continue incurring losses261 - Substantial additional funding is required to meet financial obligations and business objectives, with the current cash runway estimated to last into the second quarter of 2024, based on assumptions that may prove wrong268269 Risks Related to Product Candidate Development Key development risks include not obtaining an EUA for adintrevimab due to reduced efficacy against new variants, the inherent uncertainty of all product candidates in development, and the challenge of the discovery platform producing effective antibodies in a timely manner against a rapidly changing virus - There is a risk that the company may not obtain an EUA from the FDA for adintrevimab due to its reduced in vitro susceptibility against currently circulating Omicron sublineages274 - All product candidates are in clinical or preclinical development, and their success depends on numerous factors, including successful trials, regulatory approval, and manufacturing supply275276 - Newly emerging SARS-CoV-2 variants could reduce the effectiveness of the company's antibodies, and the company's discovery platform may not produce durable or broadly neutralizing antibodies in time to address a changing virus288290 Risks Related to Manufacturing The company faces risks related to the complex manufacturing of monoclonal antibodies, relying on third-party CDMOs like WuXi, which could lead to delays due to manufacturing problems, capacity issues, or failure to meet cGMP requirements - The company relies on contract manufacturers for the complex and difficult process of producing monoclonal antibodies and could experience delays due to manufacturing problems, capacity constraints, or raw material shortages341342 - The company is dependent on third parties, including a sole-source CDMO (WuXi), for manufacturing, testing, and supply, which exposes it to risks of non-compliance with cGMP and other regulatory requirements348349357 Unregistered Sales of Equity Securities and Use of Proceeds This section discusses the use of proceeds from the company's August 2021 IPO, which generated approximately $327.5 million net proceeds, confirming no material change in the planned use - The company's IPO in August 2021 generated net proceeds of approximately $327.5 million after deducting underwriting discounts and offering expenses547 - There has been no material change in the planned use of proceeds from the IPO as described in the company's prospectus547 Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, employment agreements, equity incentive plans, and officer certifications