• Twitter
  • LinkedIn
Savara Pharmaceuticals Savara Pharmaceuticals
  • Home
  • About Savara
    • At a Glance
    • Management
    • Board of Directors
    • Clinical Advisory Board
    • Careers
  • Investors
    • Press Releases
    • Events & Presentations
    • Stock Information
    • Corporate Governance
    • SEC Filings
    • Analyst Coverage
    • Savara’s Blog
  • Development
    • Molgradex in aPAP
    • Clinical Studies
  • Articles and Publications
  • Partnering
  • Contact

Filing

Savara Pharmaceuticals / Investors / SEC Filings / Filing
svra-10q_20190930.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 001-32157

 

Savara Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

84-1318182

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

6836 Bee Cave Road, Building III, Suite 200

Austin, TX

 

78746

(Address of principal executive offices)

 

(Zip Code)

(512) 614-1848

(Registrant’s telephone number, including area code)

N/A

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.001 per share

 

SVRA

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

☐

  

Accelerated filer

 

☒

 

 

 

 

Non-accelerated filer

 

☐   

  

Smaller reporting company

 

☒

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of November 7, 2019, the registrant had 41,210,386 shares of common stock, $0.001 par value per share, outstanding.

 

 


Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

 

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

 

Consolidated Statements of Changes in Stockholders’ Equity

3

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

30

Item 4.

Controls and Procedures

30

PART II.

OTHER INFORMATION

31

Item 1.

Legal Proceedings

31

Item 1A.

Risk Factors

31

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

52

Item 3.

Defaults Upon Senior Securities

52

Item 4.

Mine Safety Disclosures

52

Item 5.

Other Information

52

Item 6.

Exhibits

52

Exhibit Index

53

Signatures

54

 

 

 

i

 


Savara Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

September 30,

2019

 

 

December 31,

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

17,785

 

 

$

24,301

 

Short-term investments

 

 

88,496

 

 

 

86,529

 

Prepaid expenses and other current assets

 

 

2,065

 

 

 

2,514

 

Total current assets

 

 

108,346

 

 

 

113,344

 

Property and equipment, net

 

 

393

 

 

 

522

 

In-process R&D

 

 

10,806

 

 

 

11,372

 

Goodwill

 

 

19,432

 

 

 

26,918

 

Other non-current assets

 

 

1,651

 

 

 

131

 

Total assets

 

$

140,628

 

 

$

152,287

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,903

 

 

$

3,879

 

Accrued expenses and other current liabilities

 

 

5,388

 

 

 

3,375

 

Total current liabilities

 

 

8,291

 

 

 

7,254

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Debt facility

 

 

24,962

 

 

 

24,530

 

Contingent consideration

 

 

—

 

 

 

12,214

 

Other long-term liabilities

 

 

572

 

 

 

70

 

Total liabilities

 

 

33,825

 

 

 

44,068

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized as of September 30, 2019

   and December 31, 2018; 41,208,261 and 35,146,096 shares issued and outstanding

   as of September 30, 2019 and December 31, 2018, respectively

 

 

42

 

 

 

36

 

Additional paid-in capital

 

 

283,170

 

 

 

237,702

 

Accumulated other comprehensive income (loss)

 

 

(236

)

 

 

200

 

Accumulated deficit

 

 

(176,173

)

 

 

(129,719

)

Total stockholders’ equity

 

 

106,803

 

 

 

108,219

 

Total liabilities and stockholders’ equity

 

$

140,628

 

 

$

152,287

 

 

The accompanying notes are an integral part of these financial statements.

1


Savara Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

9,575

 

 

$

9,509

 

 

$

30,058

 

 

$

27,316

 

General and administrative

 

 

2,811

 

 

 

3,148

 

 

 

9,785

 

 

 

7,402

 

Impairment of acquired IPR&D

 

 

—

 

 

 

—

 

 

 

—

 

 

 

21,692

 

Impairment of goodwill

 

 

—

 

 

 

—

 

 

 

7,420

 

 

 

—

 

Depreciation and amortization

 

 

56

 

 

 

127

 

 

 

253

 

 

 

387

 

Total operating expenses

 

 

12,442

 

 

 

12,784

 

 

 

47,516

 

 

 

56,797

 

Loss from operations

 

 

(12,442

)

 

 

(12,784

)

 

 

(47,516

)

 

 

(56,797

)

Other income, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

 

5

 

 

 

111

 

 

 

16

 

 

 

(106

)

Foreign currency exchange gain (loss)

 

 

116

 

 

 

(7

)

 

 

167

 

 

 

87

 

Tax credit income

 

 

54

 

 

 

110

 

 

 

1,133

 

 

 

1,311

 

Change in fair value of financial instruments

 

 

(136

)

 

 

10

 

 

 

(254

)

 

 

(52

)

Total other income

 

 

39

 

 

 

224

 

 

 

1,062

 

 

 

1,240

 

Loss before income taxes

 

 

(12,403

)

 

 

(12,560

)

 

 

(46,454

)

 

 

(55,557

)

Income tax benefit

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,555

 

Net loss

 

$

(12,403

)

 

$

(12,560

)

 

$

(46,454

)

 

$

(51,002

)

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.30

)

 

$

(0.36

)

 

$

(1.20

)

 

$

(1.57

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

41,727,259

 

 

 

34,483,563

 

 

 

38,749,002

 

 

 

32,423,510

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on foreign currency translation

 

 

(436

)

 

 

(105

)

 

 

(570

)

 

 

(620

)

Unrealized gain (loss) on short-term investments

 

 

(12

)

 

 

13

 

 

 

134

 

 

 

26

 

Total comprehensive loss

 

$

(12,851

)

 

$

(12,652

)

 

$

(46,890

)

 

$

(51,596

)

 

The accompanying notes are an integral part of these financial statements.

 

 

2


Savara Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

Periods Ended September 30, 2019 and 2018

(In thousands, except share amounts)

(Unaudited)

 

 

 

Stockholders’ Equity

 

 

 

Common Stock

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Number of

Shares

 

 

Amount

 

 

Additional

Paid-In

Capital

 

 

Other

Comprehensive

Income (Loss)

 

 

Accumulated

Deficit

 

 

Total

 

Balance on December 31, 2018

 

 

35,146,096

 

 

$

36

 

 

$

237,702

 

 

$

200

 

 

$

(129,719

)

 

$

108,219

 

Issuance of common stock upon at the market

  offerings, net

 

 

647,426

 

 

 

—

 

 

 

4,890

 

 

 

—

 

 

 

—

 

 

 

4,890

 

Issuance of common stock for settlement of RSUs

 

 

13,125

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issuance of common stock upon exercise of stock

  options

 

 

23,593

 

 

 

—

 

 

 

6

 

 

 

—

 

 

 

—

 

 

 

6

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

1,000

 

 

 

—

 

 

 

—

 

 

 

1,000

 

Foreign exchange translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(225

)

 

 

—

 

 

 

(225

)

Unrealized gain on short-term investments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

26

 

 

 

—

 

 

 

26

 

Net loss incurred

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(12,112

)

 

 

(12,112

)

Balance on March 31, 2019

 

 

35,830,240

 

 

$

36

 

 

$

243,598

 

 

$

1

 

 

$

(141,831

)

 

$

101,804

 

Issuance of common stock upon at the market

  offerings, net

 

 

1,870,500

 

 

 

2

 

 

 

19,035

 

 

 

—

 

 

 

—

 

 

 

19,037

 

Issuance of common stock upon settlement of

  contingent liability

 

 

1,105,216

 

 

 

1

 

 

 

12,477

 

 

 

—

 

 

 

—

 

 

 

12,478

 

Issuance of common stock for settlement of RSUs

 

 

13,125

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issuance of common stock upon cashless exercise

  of warrants

 

 

11,119

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issuance of common stock upon exercise of stock

  options

 

 

73,630

 

 

 

1

 

 

 

61

 

 

 

—

 

 

 

—

 

 

 

62

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

1,146

 

 

 

—

 

 

 

—

 

 

 

1,146

 

Foreign exchange translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

91

 

 

 

—

 

 

 

91

 

Unrealized gain on short-term investments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

120

 

 

 

—

 

 

 

120

 

Net loss incurred

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(21,939

)

 

 

(21,939

)

Balance on June 30, 2019

 

 

38,903,830

 

 

$

40

 

 

$

276,317

 

 

$

212

 

 

$

(163,770

)

 

$

112,799

 

Issuance of common stock upon at the market

  offerings, net

 

 

2,251,800

 

 

 

2

 

 

 

5,662

 

 

 

—

 

 

 

—

 

 

 

5,664

 

Issuance of common stock for settlement of RSUs

 

 

13,125

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issuance of common stock upon exercise of stock

  options

 

 

39,506

 

 

 

—

 

 

 

45

 

 

 

—

 

 

 

—

 

 

 

45

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

1,146

 

 

 

—

 

 

 

—

 

 

 

1,146

 

Foreign exchange translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(436

)

 

 

—

 

 

 

(436

)

Unrealized loss on short-term investments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(12

)

 

 

—

 

 

 

(12

)

Net loss incurred

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(12,403

)

 

 

(12,403

)

Balance on September 30, 2019

 

 

41,208,261

 

 

$

42

 

 

$

283,170

 

 

$

(236

)

 

$

(176,173

)

 

$

106,803

 

 

The accompanying notes are an integral part of these financial statements.

3


Savara Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Continued)

Periods Ended September 30, 2019 and 2018

(In thousands, except share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

Common Stock

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Number of

Shares

 

 

Amount

 

 

Additional

Paid-In

Capital

 

 

Other

Comprehensive

Income

 

 

Accumulated

Deficit

 

 

Total

 

Balance on December 31, 2017

 

 

30,509,522

 

 

$

32

 

 

$

186,522

 

 

$

958

 

 

$

(68,203

)

 

$

119,309

 

Issuance of common stock upon at the market

  offerings, net

 

 

46,900

 

 

 

—

 

 

 

493

 

 

 

—

 

 

 

—

 

 

 

493

 

Issuance of common stock for settlement of RSUs

 

 

11,250

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Net issuance of common stock upon cashless

  exercise of stock options

 

 

28,655

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issuance of common stock upon exercise of stock

  options

 

 

6,000

 

 

 

—

 

 

 

3

 

 

 

—

 

 

 

—

 

 

 

3

 

Issuance of common stock upon exercise of

  warrants

 

 

2,039

 

 

 

—

 

 

 

18

 

 

 

—

 

 

 

—

 

 

 

18

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

412

 

 

 

—

 

 

 

—

 

 

 

412

 

Foreign exchange translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

341

 

 

 

—

 

 

 

341

 

Unrealized loss on short-term investments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(24

)

 

 

—

 

 

 

(24

)

Net loss incurred

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(26,848

)

 

 

(26,848

)

Balance on March 31, 2018

 

 

30,604,366

 

 

$

32

 

 

$

187,448

 

 

$

1,275

 

 

$

(95,051

)

 

$

93,704

 

Issuance of common stock for settlement of RSUs

 

 

13,125

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Net issuance of common stock upon cashless

  exercise of stock options

 

 

87,099

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issuance of common stock upon exercise of stock

  options

 

 

24,521

 

 

 

—

 

 

 

30

 

 

 

—

 

 

 

—

 

 

 

30

 

Issuance of common stock upon exercise of

  warrants

 

 

84

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

1

 

Common stock issued for purchase of assets

 

 

107,579

 

 

 

—

 

 

 

995

 

 

 

—

 

 

 

—

 

 

 

995

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

392

 

 

 

—

 

 

 

—

 

 

 

392

 

Foreign exchange translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(856

)

 

 

—

 

 

 

(856

)

Unrealized gain on short-term investments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

37

 

 

 

—

 

 

 

37

 

Net loss incurred

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(11,594

)

 

 

(11,594

)

Balance on June 30, 2018

 

 

30,836,774

 

 

$

32

 

 

$

188,866

 

 

$

456

 

 

$

(106,645

)

 

$

82,709

 

Issuance of common stock upon public

  offering, net

 

 

4,250,000

 

 

 

4

 

 

 

45,788

 

 

 

—

 

 

 

—

 

 

 

45,792

 

Issuance of common stock for settlement of RSUs

 

 

13,125

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issuance of common stock upon exercise of stock

  options

 

 

20,641

 

 

 

—

 

 

 

17

 

 

 

—

 

 

 

—

 

 

 

17

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

1,988

 

 

 

—

 

 

 

—

 

 

 

1,988

 

Foreign exchange translation adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(105

)

 

 

—

 

 

 

(105

)

Unrealized gain on short-term investments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

13

 

 

 

—

 

 

 

13

 

Net loss incurred

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(12,560

)

 

 

(12,560

)

Balance on September 30, 2018

 

 

35,120,540

 

 

$

36

 

 

$

236,659

 

 

$

364

 

 

$

(119,205

)

 

$

117,854

 

 

The accompanying notes are an integral part of these financial statements.

4


Savara Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(46,454

)

 

$

(51,002

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization including right-of-use assets

 

 

772

 

 

 

387

 

Impairment of acquired IPR&D

 

 

—

 

 

 

21,692

 

Impairment of goodwill

 

 

7,420

 

 

 

—

 

Changes in fair value of financial instruments

 

 

254

 

 

 

52

 

Change in fair value of contingent consideration

 

 

264

 

 

 

131

 

Noncash interest (income) / expense

 

 

42

 

 

 

83

 

Acquired IPR&D

 

 

—

 

 

 

995

 

Foreign currency loss

 

 

(167

)

 

 

(87

)

Amortization of debt issuance costs

 

 

432

 

 

 

332

 

Accretion on discount to short-term investments

 

 

(1,004

)

 

 

(546

)

Stock-based compensation

 

 

3,292

 

 

 

2,792

 

Benefit for deferred taxes

 

 

—

 

 

 

(4,555

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

394