Savara(SVRA) - 2021 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Savara Inc. reported a $31.7 million net loss for the nine months ended September 30, 2021, with total assets of $187.3 million and stockholders' equity of $155.2 million, significantly impacted by a public offering Condensed Consolidated Balance Sheets As of September 30, 2021, total assets increased to $187.3 million from $97.7 million at year-end 2020, primarily due to increased cash and investments, leading to substantial growth in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 (Unaudited) | Dec 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $44,699 | $22,880 | | Short-term investments | $126,107 | $59,308 | | Total current assets | $174,584 | $85,121 | | Total assets | $187,274 | $97,745 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $10,661 | $8,174 | | Long-term debt | $21,350 | $25,104 | | Total liabilities | $32,045 | $33,362 | | Total stockholders' equity | $155,229 | $64,383 | | Total liabilities and stockholders' equity | $187,274 | $97,745 | Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported a net loss of $10.5 million for Q3 2021 and $31.7 million for the nine-month period, showing an improvement from 2020 primarily due to lower operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Total operating expenses | $9,972 | $11,041 | $30,838 | $36,544 | | Loss from operations | $(9,972) | $(10,785) | $(30,838) | $(36,288) | | Net loss | $(10,546) | $(11,063) | $(31,704) | $(35,874) | | Net loss per share (basic and diluted) | $(0.07) | $(0.18) | $(0.25) | $(0.61) | Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity significantly increased to $155.2 million by September 30, 2021, primarily driven by a $121.8 million public offering, partially offset by net loss and warrant repurchases - A public offering in Q1 2021 resulted in the issuance of 57,479,978 shares of common stock and pre-funded warrants, generating net proceeds of approximately $121.8 million[13] - The company repurchased outstanding pre-funded warrants for $3.9 million, which was accounted for as a reduction in additional paid-in capital[13] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $30.7 million for the nine months ended September 30, 2021, offset by $120.8 million from financing activities, resulting in a $21.8 million net increase in cash Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(30,718) | $(27,536) | | Net cash (used in) provided by investing activities | $(68,188) | $9,434 | | Net cash provided by financing activities | $120,800 | $3,689 | | Increase (decrease) in cash and cash equivalents | $21,819 | $(14,585) | | Cash and cash equivalents end of period | $44,699 | $35,219 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, financial instruments, and operations, including the molgramostim program, liquidity, long-term debt, a significant public offering, and clinical trial commitments - The company's lead program is molgramostim nebulizer solution, an inhaled therapy in Phase 3 development for autoimmune pulmonary alveolar proteinosis (aPAP)[22] - As of September 30, 2021, the company had cash, cash equivalents, and short-term investments totaling $170.8 million, considered sufficient to fund operations for at least the next twelve months[30] - In March 2021, the company completed a public offering, selling common stock and pre-funded warrants for net proceeds of approximately $122.1 million[66][68] - The company has a $25 million term loan with Silicon Valley Bank, with an amendment in March 2021 extending the interest-only period to June 30, 2022, upon meeting a key clinical trial milestone[48][50] - The company entered a Master Services Agreement with Parexel for contract research services related to the IMPALA 2 trial, with estimated fees and expenses of approximately $32 million over the trial's course[82] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses decreased net loss for Q3 and the first nine months of 2021, driven by R&D expense shifts and lower G&A, with liquidity significantly bolstered by a $122.1 million public offering - The company's lead program is molgramostim, an inhaled therapy in Phase 3 development for autoimmune pulmonary alveolar proteinosis (aPAP)[103] - As of September 30, 2021, the company had $44.7 million in cash and cash equivalents and $126.1 million in short-term investments, deemed sufficient to fund operations for at least the next twelve months[107][139] R&D Expense by Program (in thousands) | Product Candidate | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Molgramostim | $6,520 | $3,340 | $18,767 | $11,843 | | Vancomycin | $12 | $2,145 | $2,606 | $7,542 | | Other | $— | $118 | $— | $5,496 | | Total R&D | $6,532 | $5,603 | $21,373 | $24,881 | - The decrease in net loss for the nine months ended Sep 30, 2021, was primarily due to a $5.4 million charge for acquiring a product candidate in 2020 and a $4.9 million decrease in activities for the vancomycin study, offset by a $6.9 million increase in costs for the molgramostim aPAP trial[127] Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from interest rates and foreign currency, but management assesses these as non-material, with hypothetical changes having no significant financial impact - The company's primary market risks are interest rate risk on its cash, investments, and debt, and foreign currency risk from its Danish operations[143][144][145] - Management asserts that a hypothetical 1% change in interest rates or a 10% change in foreign currency exchange rates would not materially affect the company's financial condition or results of operations[143][145] Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of September 30, 2021, with no material changes reported - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[148] - Management concluded that the company's internal control over financial reporting was effective as of September 30, 2021[149] - There were no changes in internal control over financial reporting during the nine months ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, internal controls[151] PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any material pending litigation or other material legal proceedings - As of the filing date, Savara Inc. is not a party to any material pending legal proceedings[153] Risk Factors No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2020 - There have been no material changes in the company's risk factors from those described in the Annual Report on Form 10-K for the year ended December 31, 2020[154] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[155]