Savara(SVRA) - 2021 Q4 - Annual Report

PART I Business The company is a clinical-stage biopharmaceutical firm focused on developing its lead candidate, molgramostim, for the rare respiratory disease aPAP - The company's primary focus is its lead product candidate, molgramostim nebulizer solution, an inhaled GM-CSF in Phase 3 development for the treatment of autoimmune pulmonary alveolar proteinosis (aPAP)[17] - Savara's corporate strategy involves advancing the molgramostim aPAP program, ensuring manufacturing is validated for commercial scale, and outsourcing capital-intensive operations[20] - The company has discontinued development of its vancomycin program after the Phase 3 AVAIL trial failed to meet its primary endpoint in December 2020 and also discontinued the Apulmiq clinical development program[26][27] - Molgramostim has received Fast Track Designation, Breakthrough Therapy Designation, and Orphan Drug Designation from the FDA for the treatment of aPAP[19][40] - The ongoing pivotal Phase 3 IMPALA-2 trial for molgramostim is a 48-week study expected to enroll approximately 160 patients, with top-line data anticipated in the second quarter of 2024[45][46] - Savara relies on an outsourced manufacturing model with key partners including GEMA Biotech, Patheon, and PARI Pharma[56][57][58][59] - The company has no patent protection for molgramostim for the treatment of aPAP and primarily relies on Orphan Drug exclusivity and proprietary delivery devices[239] Risk Factors The company faces significant risks from its history of financial losses, dependence on a single product candidate, and reliance on third-party manufacturers - The company has a history of significant losses, with a net loss of $43.0 million in 2021 and an accumulated deficit of $300.5 million as of December 31, 2021[153][154] - Savara is substantially dependent on the success of its single lead product candidate, molgramostim, highlighting the high risk of clinical development[166][168] - The company completely relies on third-party CMOs for manufacturing and CROs for clinical trials, such as Parexel for the IMPALA-2 trial[177][185] - There is no patent protection for molgramostim for the treatment of aPAP, and the company relies on Orphan Drug exclusivity which may not be granted[213][239] - The company's stock price is highly volatile and faces a risk of being delisted from Nasdaq if the minimum closing bid price of $1.00 is not maintained[268][272] Unresolved Staff Comments The company reports no unresolved comments from the SEC staff - As of the report date, Savara Inc. has no unresolved comments issued by the SEC staff[279] Properties The company leases a small office space in Austin, Texas for its corporate headquarters - The company leases approximately 2,260 square feet of office space in Austin, Texas for its corporate headquarters[280] Legal Proceedings The company is not currently involved in any material legal proceedings - The company is not currently involved in any material pending litigation or other material legal proceedings[281] Mine Safety Disclosures This item is not applicable to the company's operations - Mine safety disclosures are not applicable to Savara Inc[282] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on the Nasdaq under the symbol 'SVRA', with details provided on equity compensation plans - The company's common stock trades on the Nasdaq Global Select Market with the ticker symbol 'SVRA'[285] Equity Compensation Plan Information as of December 31, 2021 | Plan Category | Number of securities to be issued upon exercise (a) | Weighted-average exercise price (b) | Number of securities remaining available for future issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 6,061,216 | $2.48 | 202,362 | | Equity compensation plans not approved by security holders | 1,430,000 | $1.25 | 270,000 | | Total | 7,491,216 | $2.25 | 472,362 | Reserved This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations The company's net loss narrowed in 2021 due to lower operating expenses, while its cash position was significantly strengthened by a public offering Results of Operations | Metric | 2021 (in millions) | 2020 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | Net Loss | $(43.0) | $(49.6) | $6.6 | | Research and Development | $29.0 | $35.0 | $(6.0) | | General and Administrative | $12.4 | $14.3 | $(1.9) | | Loss from Operations | $(41.5) | $(49.3) | $7.8 | - R&D expenses decreased by $6.0 million (17.3%) in 2021, primarily due to the wind-down of the discontinued vancomycin study, partially offset by increased costs for the molgramostim IMPALA-2 trial[327] - G&A expenses decreased by $1.9 million (13.4%) in 2021, mainly because 2020 included one-time severance payments and non-cash stock-based compensation charges for former executives[328] - As of December 31, 2021, the company had $161.2 million in cash, cash equivalents, and short-term investments, significantly up from $82.2 million at the end of 2020[154][330] - In March 2021, the company completed a public offering of common stock and pre-funded warrants, generating net proceeds of approximately $122.2 million[337] - Net cash used in operating activities was $40.1 million for the year ended December 31, 2021, consistent with the $39.8 million used in 2020[338][339] Quantitative and Qualitative Disclosures About Market Risk The company's exposure to interest rate and foreign currency exchange risks is not considered material - The company has market risk exposure from interest rates on its cash and investments, but does not anticipate material risks from interest rate changes[352][354] - Foreign currency risk exists due to operations in Denmark, but exchange rate losses were not significant in 2021 or 2020[353] Financial Statements and Supplementary Data This section refers to the consolidated financial statements and supplementary data filed with the report Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no disagreements with its accountants on accounting and financial disclosure - There were no disagreements with accountants on accounting and financial disclosure[357] Controls and Procedures Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of year-end 2021 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[359] - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2021, based on the COSO framework[360] Other Information This item is not applicable PART III Directors, Executive Officers, and Corporate Governance Required information on directors, officers, and corporate governance is incorporated by reference from the company's proxy statement - The information required by this item is incorporated by reference from the company's definitive proxy statement[366][368] Executive Compensation Information regarding executive compensation is incorporated by reference from the company's proxy statement - The information required by this item is incorporated by reference from the company's definitive proxy statement[369] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information on security ownership is incorporated by reference from the company's proxy statement - The information required by this item is incorporated by reference from the company's definitive proxy statement[370] Certain Relationships and Related Transactions, and Director Independence Information on related transactions and director independence is incorporated by reference from the company's proxy statement - The information required by this item is incorporated by reference from the company's definitive proxy statement[371] Principal Accounting Fees and Services Information regarding accounting fees and services is incorporated by reference from the company's proxy statement - The information required by this item is incorporated by reference from the company's definitive proxy statement[372] PART IV Exhibits, Financial Statement Schedules This section lists the financial statements and exhibits filed as part of the report - This item lists the financial statements, financial statement schedules, and exhibits filed with the report[373] Form 10-K Summary This item is not applicable - A Form 10-K summary is not applicable[375]