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.) |
|
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|
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|
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 |
|
☒ |
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|||
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Non-accelerated filer |
|
☐ |
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Smaller reporting company |
|
☒ |
|
|
|
|
|
|
|
|
|
|
|
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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.
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Page |
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PART I. |
FINANCIAL INFORMATION |
|
|
Item 1. |
Financial Statements (Unaudited) |
|
|
|
1 |
|
|
|
Condensed Consolidated Statements of Operations and Comprehensive Loss |
2 |
|
|
3 |
|
|
|
5 |
|
|
|
6 |
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
23 |
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Item 3. |
30 |
|
|
Item 4. |
30 |
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PART II. |
31 |
|
|
Item 1. |
31 |
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Item 1A. |
31 |
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Item 2. |
52 |
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Item 3. |
52 |
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Item 4. |
52 |
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Item 5. |
52 |
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Item 6. |
52 |
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53 |
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54 |
||
i
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
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
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
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
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 |
|||||