Filing - Savara Inc.

10-Q

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 June 30, 2022

☐ 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 201 Austin, TX		78746
(Address of principal executive offices)		(Zip Code)

(512) 614-1848

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 August 11, 2022, the registrant had 114,042,642 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	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	25
Exhibit Index		26
Signatures		27

PART I—FINANCIAL INFORMATION

Item I. Financial Information

Savara Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)


	June 30, 2022			December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	95,153		$	34,012
Short-term investments		47,286			127,159
Prepaid expenses and other current assets		2,946			3,829
Total current assets		145,385			165,000
Property and equipment, net		61			73
In-process R&D		10,379			11,274
Other non-current assets		952			251
Total assets	$	156,777		$	176,598
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	805		$	1,443
Accrued expenses and other current liabilities		2,901			4,884
Current portion of long-term debt		—			8,333
Total current liabilities		3,706			14,660
Long-term liabilities:
Long-term debt		25,942			17,323
Other long-term liabilities		87			117
Total liabilities		29,735			32,100
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.001 par value, 300,000,000 authorized as of June 30, 2022 and December 31, 2021; 114,041,271 and 114,036,892 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		116			116
Additional paid-in capital		445,927			444,898
Accumulated other comprehensive (loss) income		(1,016	)		5
Accumulated deficit		(317,985	)		(300,521	)
Total stockholders’ equity		127,042			144,498
Total liabilities and stockholders’ equity	$	156,777		$	176,598

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

Savara Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	For the three months ended June 30,						For the six months ended June 30,
	2022			2021			2022			2021
Operating expenses:
Research and development	$	6,418		$	7,252			12,102			14,841
General and administrative		2,957			3,153			5,311			5,931
Depreciation and amortization		8			47			16			94
Total operating expenses		9,383			10,452			17,429			20,866
Loss from operations		(9,383	)		(10,452	)		(17,429	)		(20,866	)
Other income (expense)
Interest expense, net		(284	)		(558	)		(854	)		(1,150	)
Foreign currency exchange gain (loss)		42			43			29			(15	)
Tax credit income		461			26			790			873
Total other income (expense), net		219			(489	)		(35	)		(292	)
Net loss	$	(9,164	)	$	(10,941	)	$	(17,464	)	$	(21,158	)
Net loss per share:
Basic and diluted	$	(0.06	)	$	(0.07	)	$	(0.11	)	$	(0.18	)
Weighted-average common shares outstanding:
Basic and diluted		152,771,103			152,460,531			152,770,434			114,934,938
Other comprehensive loss:
(Loss) gain on foreign currency translation		(745	)		83			(953	)		(348	)
Unrealized gain (loss) on short-term investments		20			24			(68	)		(2	)
Total comprehensive loss	$	(9,889	)	$	(10,834	)	$	(18,485	)	$	(21,508	)

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

Savara Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Periods Ended June 30, 2022 and 2021

(In thousands, except share amounts)

(Unaudited)


	Stockholders’ Equity
	Common Stock
	Number of Shares			Amount		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
Balance on December 31, 2021		114,036,892		$	116	$	444,898		$	(300,521	)	$	5		$	144,498
Issuance of common stock for settlement of RSUs		3,688			—		—			—			—			—
Repurchase of shares for minimum tax withholdings		(720	)		—		(1	)		—			—			(1	)
Stock-based compensation		—			—		574			—			—			574
Foreign exchange translation adjustment		—			—		—			—			(208	)		(208	)
Unrealized loss on short- term investments		—			—		—			—			(88	)		(88	)
Net loss		—			—		—			(8,300	)		—			(8,300	)
Balance on March 31, 2022		114,039,860		$	116	$	445,471		$	(308,821	)	$	(291	)	$	136,475
Issuance of common stock for settlement of RSUs		1,812			—		—			—			—			—
Repurchase of shares for minimum tax withholdings		(401	)		—		—			—			—			—
Stock-based compensation		—			—		456			—			—			456
Foreign exchange translation adjustment		—			—		—			—			(745	)		(745	)
Unrealized gain on short- term investments		—			—		—			—			20			20
Net loss		—			—		—			(9,164	)		—			(9,164	)
Balance on June 30, 2022		114,041,271		$	116	$	445,927		$	(317,985	)	$	(1,016	)	$	127,042

Savara Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (continued)

Periods Ended June 30, 2022 and 2021

(In thousands, except share amounts)

(Unaudited)


	Stockholders’ Equity
	Common Stock
	Number of Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
Balance on December 31, 2020		54,152,955	$	55	$	320,893		$	(257,507	)	$	942		$	64,383
Issuance of common stock and pre-funded warrants in public offering, net of offering costs (1)		57,479,978		57		121,770			—			—			121,827
Repurchase of outstanding pre-funded warrants		—		—		(3,909	)		—			—			(3,909	)
Net issuance of common stock upon exercise of stock warrants, net		1,737,450		2		2,544			—			—			2,546
Issuance of common stock for settlement of RSUs		5,563		—		—			—			—			—
Issuance of common stock upon exercise of stock options		202,708		—		2			—			—			2
Stock-based compensation		—		—		946			—			—			946
Foreign exchange translation adjustment		—		—		—			—			(431	)		(431	)
Unrealized loss on short- term investments		—		—		—			—			(26	)		(26	)
Net loss		—		—		—			(10,217	)		—			(10,217	)
Balance on March 31, 2021		113,578,654	$	114	$	442,246		$	(267,724	)	$	485		$	175,121
Issuance of common stock and pre-funded warrants in public offering, net of offering costs		—		—		321			—			—			321
Issuance of common stock for settlement of RSUs		203,687		—		—			—			—			—
Issuance of common stock upon exercise of stock options		65,191		—		3			—			—			3
Stock-based compensation		—		—		771			—			—			771
Foreign exchange translation adjustment		—		—		—			—			83			83
Unrealized gain on short- term investments		—		—		—			—			24			24
Net loss		—		—		—			(10,941	)		—			(10,941	)
Balance on June 30, 2021		113,847,532	$	114	$	443,341		$	(278,665	)	$	592		$	165,382

(1)

As discussed in Note 8. Stockholders’ Equity, the Company sold (i) an aggregate of 57,479,978 shares of the Company’s common stock, par value $0.001 per share and (ii) pre-funded warrants to purchase an aggregate of 32,175,172 shares of the Company's common stock at an exercise price, equal to the par value, of $0.001 per share.

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

Savara Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	For the six months ended June 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(17,464	)	$	(21,158	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		16			94
Amortization of right-of-use assets		66			116
Foreign currency (gain) loss		(29	)		15
Amortization of debt issuance costs		198			277
Amortization on premium to short-term investments		371			668
Stock-based compensation		1,030			1,717
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		1,337			(170	)
Non-current assets		(803	)		(890	)
Accounts payable and accrued expenses and other current liabilities		(2,463	)		(2,413	)
Long-term liabilities		—			(47	)
Net cash used in operating activities		(17,741	)		(21,791	)
Cash flows from investing activities:
Purchase of property and equipment		(5	)		(6	)
Purchase of available-for-sale securities, net		(16,004	)		(114,445	)
Maturity of available-for-sale securities		83,593			33,280
Sale of available-for-sale securities, net		11,276			—
Net cash provided by (used in) investing activities		78,860			(81,171	)
Cash flows from financing activities:
Repurchase of outstanding pre-funded warrants		—			(3,909	)
Repayment of long-term debt (1)		(26,350	)		—
Proceeds from long-term debt, net (1)		26,438
Issuance of common stock and pre-funded warrants in public offering, net of offering costs		—			122,148
Proceeds from exercise of stock options		—			5
Issuance of common stock upon exercise of warrants, net		—			2,546
Repurchase of shares for minimum tax withholdings		(