Savara(SVRA) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Savara Inc. reported a reduced net loss of $8.3 million for Q1 2022, with total assets at $166.2 million and cash flow from operations showing an $8.4 million outflow Condensed Consolidated Balance Sheets As of March 31, 2022, total assets decreased to $166.2 million, primarily due to reduced short-term investments, while cash and equivalents increased to $79.2 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $79,227 | $34,012 | | Short-term investments | $72,570 | $127,159 | | Total current assets | $154,537 | $165,000 | | Total assets | $166,209 | $176,598 | | Liabilities & Equity | | | | Total current liabilities | $16,323 | $14,660 | | Total liabilities | $29,734 | $32,100 | | Total stockholders' equity | $136,475 | $144,498 | | Total liabilities and stockholders' equity | $166,209 | $176,598 | Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported a net loss of $8.3 million for Q1 2022, a reduction from $10.2 million in Q1 2021, driven by lower operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Research and development | $5,684 | $7,589 | | General and administrative | $2,354 | $2,778 | | Total operating expenses | $8,046 | $10,414 | | Loss from operations | $(8,046) | $(10,414) | | Net loss | $(8,300) | $(10,217) | | Net loss per share (basic and diluted) | $(0.05) | $(0.13) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $8.4 million, while investing activities provided $53.7 million, leading to a $45.2 million increase in cash and equivalents Cash Flow Summary (in thousands) | Activity | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,425) | $(9,597) | | Net cash provided by (used in) investing activities | $53,665 | $(77,739) | | Net cash (used in) provided by financing activities | $(1) | $120,466 | | Increase in cash and cash equivalents | $45,215 | $33,102 | | Cash and cash equivalents end of period | $79,227 | $55,982 | Notes to Condensed Consolidated Financial Statements Notes detail the company's lead program molgramostim, sufficient liquidity for 12 months despite a $308.8 million deficit, and recent debt refinancing - The company is a clinical-stage biopharmaceutical firm focused on rare respiratory diseases, with its lead program being molgramostim for autoimmune pulmonary alveolar proteinosis (aPAP), which is currently in Phase 3 development[17] - As of March 31, 2022, the company had an accumulated deficit of approximately $308.8 million. However, its cash, cash equivalents, and short-term investments are considered sufficient to fund operations for the subsequent twelve months[22][25] - In March 2021, the company completed a public offering of common stock and pre-funded warrants, resulting in net proceeds of approximately $122.2 million[54][56] - The company has future commitments including up to $3.2 million in milestone payments for molgramostim manufacturing and an estimated $33 million for the IMPALA-2 clinical trial services with Parexel[67][69] - In April 2022, the company entered into an amended and restated loan agreement, refinancing its debt with a new $26.5 million term loan facility with an interest-only payment period through April 2026[86][87] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the reduced net loss in Q1 2022 due to lower operating expenses and confirms strong liquidity, sufficient for the next twelve months Overview Savara is a clinical-stage biopharmaceutical company focused on rare respiratory diseases, with an accumulated deficit of $308.8 million as of March 31, 2022 - The company's lead program is molgramostim nebulizer solution, an inhaled biologic in Phase 3 development for autoimmune pulmonary alveolar proteinosis (aPAP)[94] - The company has incurred operating losses every year since inception, with a net loss of $8.3 million for Q1 2022 and an accumulated deficit of $308.8 million as of March 31, 2022[96] Results of Operations Total operating expenses decreased by $2.4 million in Q1 2022, leading to a reduced net loss of $8.3 million, primarily due to lower R&D and G&A costs Comparison of Operating Results (in thousands) | Expense Category | Q1 2022 | Q1 2021 | Dollar Change | | :--- | :--- | :--- | :--- | | Research and development | $5,684 | $7,589 | $(1,905) | | General and administrative | $2,354 | $2,778 | $(424) | | Total operating expenses | $8,046 | $10,414 | $(2,368) | | Net loss | $(8,300) | $(10,217) | $1,917 | - The $1.9 million (25.1%) decrease in R&D expenses was mainly due to a $2.5 million reduction in costs for the close-out of vancomycin activities, partly offset by a $0.6 million increase in costs for the molgramostim IMPALA-2 trial[113] - The $0.4 million (15.3%) decrease in G&A expenses was attributed to reduced administrative and compensation costs from streamlining activities initiated in Q3 2021[114] Liquidity and Capital Resources The company held $151.8 million in cash and investments as of March 31, 2022, deemed sufficient for the next twelve months, with future funding dependent on clinical development - As of March 31, 2022, the company held $79.2 million in cash and cash equivalents and $72.6 million in short-term investments, for a total of approximately $151.8 million[116][125] - In April 2022, the company refinanced its debt by entering into an Amended Loan Agreement for a $26.5 million term loan facility[117] - The company believes its current capital is sufficient to fund planned activities, but may need to raise additional capital to further fund development, seek regulatory approvals, and begin commercialization[125] Quantitative and Qualitative Disclosures About Market Risk The company's market risk exposure from interest rates and foreign currency fluctuations is not considered material, with a 10% change having no material effect - The company's market risk exposure from interest rates on cash, cash equivalents, and short-term investments is not considered material[129] - A 10% change in interest rates on the company's long-term debt as of March 31, 2022, would not have had a material effect on interest expense[130] - Foreign currency risk from operations in Denmark is managed, and a 10% change in the Krone-to-dollar or Euro-to-dollar exchange rate would not have had a material effect on financial results[131] Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of March 31, 2022, with no material changes during the quarter - Management concluded that as of March 31, 2022, the company's disclosure controls and procedures were effective[134] - Management concluded that the company's internal control over financial reporting was effective as of March 31, 2022, based on the COSO framework[135] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[136] PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any material pending litigation or other material legal proceedings - The company is not currently a party to any material pending litigation or other material legal proceeding[137] Risk Factors 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, 2021 - 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, 2021[138]