Savara’s Key Activities in the Coming Quarters

Dear Shareholders,

There has been a flurry of activity recently and I wanted to take this opportunity to reconnect with you, highlight key events that have transpired, and give you my perspective on what’s in store over the coming quarters.

I’ll start with what has been weighing on the minds of many―COVID-19. While nearly all companies have been impacted by the pandemic to some extent, we believe we can navigate the challenges we face with two of our clinical studies in cystic fibrosis (CF); specifically the Phase 3 AVAIL and Phase 2 ENCORE studies which are evaluating AeroVanc for the treatment of MRSA and Molgradex for the treatment of non-tuberculous mycobacterial (NTM) infection, respectively. Due to practical limitations caused by COVID-19 concerns, both studies stopped enrolling new patients at the end of March and, in adherence with FDA guidelines, best efforts are being made to allow those who were already enrolled to continue with study treatments and site visit protocols. These efforts are proving effective. To-date, we’ve been able to keep the majority of patients in the studies through close collaboration with the research centers and by allowing telemedicine visits where possible. In this regard, we are monitoring the situation closely and continue to follow guidance from governing bodies about study conduct. Enrolling fewer than expected patients in the AVAIL study (133 out of a target of 150 in the primary analysis population) will have some impact to the statistical powering but we won’t have an accurate estimate of that impact until the study completes. Topline results from the study are still expected early next year. When considering the addressable MRSA market, it’s worth touching on the impact of Trikafta, a CTFR modulator treatment that became available during the AVAIL study and has been described as a potential “transformative medication” in CF. On behalf of people living with CF, we are happy to see a drug dramatically improve patient outcomes for this devastating disease. However, with the availability of the CTFR modulator, the role an inhaled antibiotic will play in the CF treatment paradigm is unclear―especially if Trikafta becomes the standard of care―and will be determined over time as we better understand the longer-term effects of the modulator on the disease and, in particular, the frequency of MRSA infections. While it is possible that AeroVanc could be effective when added to treatment with Trikafta, the AVAIL study does not assess that combination. We remain hopeful that AeroVanc could address the needs of a specific patient population within CF and look forward to learning the results of the study. With regards to ENCORE, which was approximately half enrolled, the study will provide valuable information on the safety, and potential efficacy, of Molgradex in non-tuberculous mycobacterial, or NTM, lung infection. Upon its conclusion, we will determine next steps for the NTM program which also includes the recently completed Phase 2 OPTIMA study.

I’m proud to say that we are also contributing to the fight against the virus. Beyond our own programs, we are working with the University of Giessen in Germany to supply drug for an investigator-initiated clinical study in COVID-19 pneumonia. The placebo controlled multi-center study will assess the potential efficacy of Molgradex (inhaled GM-CSF) in preventing progression of COVID-19 pneumonia to acute respiratory distress syndrome (ARDS)―a serious lung condition that causes respiratory failure and has a very high fatality rate. Scientifically, the study is based on the belief that, prior to the development of ARDS, inhaled GM-CSF may stimulate the innate immune system function leading to improved gas exchange, reduced morbidity, and less need for mechanical ventilation. Because this is not a Savara-sponsored study, we are not in control of its execution other than supplying Molgradex and matching placebo. Therefore, we cannot comment on additional details such as the timing of enrollment or anticipated completion. More information on the study can be found on the clinicaltrials.gov site once it’s posted. We are certainly happy to support academic institutions which are exploring the scientific potential of Molgradex to address this health crisis. More broadly, it is amazing to watch the research community harness the power of science to rapidly and efficiently advance investigational therapies that could help abate the impact of the pandemic.

Regarding our lead development program with Molgradex, our highest priority is to finalize plans for IMPALA 2, a second Phase 3 study that will further evaluate Molgradex for the treatment of autoimmune pulmonary alveolar proteinosis (aPAP). Following discussions with the U.S. Food and Drug Administration (FDA), we now have a good understanding of the IMPALA 2 study design, which is shown below.

Expected design of IMPALA 2

While the efficacy endpoints will be assessed at week 24 for primary analyses, the duration of the double-blind period of the study will be 48 weeks to better support the durability of treatment effect, and to understand the long-term safety of the drug which will likely be used chronically. While we are diligently working through a few more details, including sample size and timing for a study start, we have kick-started the internal operational activities that can be done now in order to initiate IMPALA 2 as soon as possible following a final protocol.

Lastly, I’ll remind you of our newest Phase 3 program, Apulmiq, for which we acquired the development and commercialization rights in late March. Apulmiq is an investigational inhaled ciprofloxacin being evaluated for the treatment of non-cystic fibrosis bronchiectasis (NCFB). This program fits well with our specialized pipeline of inhaled investigational drugs targeting orphan lung diseases and is particularly compelling as there is substantial unmet medical need. With no approved pharmaceutical treatment options available for the more than 150,000 patients in the U.S. (a substantial percentage of which could be benefit from treatment with Apulmiq), the investigational drug could represent a blockbuster opportunity for Savara. Based on results from the previous clinical studies of Apulmiq and past interactions between the FDA and Aradigm (the previous owner), as well as our own assessment, we believe that one successful confirmatory study will be required for approval in the U.S. Operationally, our next steps are to speak with the FDA to discuss the parameters of a confirmatory study. Following that meeting, we’ll have a better sense of the necessary resources to advance this program. Various options for financing a confirmatory study range from partnering (preferred) to project and debt financing. As progress is made in this regard, and key decisions are finalized, we look forward to updating you.

Successful execution of these late-stage studies requires robust and well-defined internal processes, as well as first-class external vendors to ensure the highest quality of study activities and oversight. As we work to advance these programs, and the complexity of our business increases, we are undertaking some operational maturity efforts. This is not a new focus within Savara, but we are making a considerable effort to implement improvements to our operations and strengthen our resources so that we have the highest probability of success going forward.

With multiple Phase 3 clinical studies, we are excited about the future and look forward to staying connected with you as each of the programs advance to the next milestone. As always, we appreciate your continued support and hope that you are all staying safe during these times.

Rob Neville
Chief Executive Officer



Savara cautions you that statements herein that are not a description of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words referencing future events or circumstances such as “expect,” “intend,” “plan,” “anticipate,” “believe,” and “will,” among others. Such statements include, but are not limited to, statements relating to Savara’s belief that we can navigate the challenges we face with two of our clinical studies in cystic fibrosis, statements regarding the potential effects of enrolling fewer than expected patients in the AVAIL study, that topline results from AVAIL are still expected in early 2021, statements regarding Trikafta being a potential transformative medication in CF and the potential effect of its availability on the use of an inhaled antibiotic in the CF treatment paradigm, that Trikafta could become the standard of care, the possibility that AeroVanc could be effective when added to treatment with Trikafta, that we remain hopeful that AeroVanc could address the needs of a specific patient population within CF and look forward to learning the results of the study, that the ENCORE study will provide valuable information on the safety, and potential efficacy, of Molgradex in NTM lung infection, statements regarding our future plans for the NTM program, statements regarding the basis for the study of Molgradex in patients with COVID-19, statements regarding watching the research community harness the power of science to rapidly and efficiently advance investigational therapies that could help abate the impact of the pandemic, statements regarding our plans for the design and endpoints of the IMPALA 2 study, that Molgradex will likely be used chronically for the treatment of aPAP, that a substantial percentage of patients in the U.S. with NCFB could benefit from the investigational drug, that Apulmiq could represent a blockbuster opportunity for Savara, our belief that one successful confirmatory study will be required for approval of Apulmiq in the U.S., that we’ll have a better sense of the necessary resources to advance this program following a meeting with the FDA, that we look forward to updating you as progress is made, statements related to Savara’s operational maturity efforts, and that we are excited about the future and look forward to staying connected with you as each of the programs advance to the next milestone. Savara may not actually achieve any of the matters referred to in such forward-looking statements, and you should not place undue reliance on these forward-looking statements. These forward-looking statements are based upon Savara’s current expectations and involve assumptions that may never materialize or may prove to be incorrect. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, which include, without limitation, the risks and uncertainties relating to the impact of the COVID-19 pandemic on our business and operations, the outcome of our future interactions with regulatory authorities, the outcome of our ongoing and planned clinical trials for our product candidates, the impact of changes in standard of care and available treatments for the indications targeted by our product candidates, the ability to project future cash utilization and reserves needed for contingent future liabilities and business operations, the availability of sufficient resources for Savara’s operations and to conduct or continue planned clinical development programs, the ability to obtain the necessary patient enrollment for our product candidates in a timely manner, the ability to successfully develop our product candidates, the risks associated with the process of developing, obtaining regulatory approval for and commercializing drug candidates such as Molgradex, Apulmiq, and AeroVanc that are safe and effective for use as human therapeutics, and the timing and ability of Savara to raise additional equity capital as needed to fund continued operations. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. For a detailed description of our risks and uncertainties, you are encouraged to review our documents filed with the SEC including our recent filings on Form 8-K, Form 10-K and Form 10-Q. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. Savara undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as may be required by law.