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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, 2020

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 4, 2020, the registrant had 54,141,275 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

32

Item 4.

Controls and Procedures

32

PART II.

OTHER INFORMATION

33

Item 1.

Legal Proceedings

33

Item 1A.

Risk Factors

33

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

56

Item 3.

Defaults Upon Senior Securities

56

Item 4.

Mine Safety Disclosures

56

Item 5.

Other Information

56

Item 6.

Exhibits

56

Exhibit Index

57

Signatures

58

 

 

i


 

Savara Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

September 30,

2020

 

 

December 31,

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

35,219

 

 

$

49,804

 

Short-term investments

 

 

59,116

 

 

 

71,957

 

Prepaid expenses and other current assets

 

 

1,993

 

 

 

2,306

 

Total current assets

 

 

96,328

 

 

 

124,067

 

Property and equipment, net

 

 

211

 

 

 

352

 

In-process R&D

 

 

11,641

 

 

 

11,111

 

Other non-current assets

 

 

1,162

 

 

 

673

 

Total assets

 

$

109,342

 

 

$

136,203

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,745

 

 

$

3,409

 

Accrued expenses and other current liabilities

 

 

5,892

 

 

 

5,471

 

Debt facility

 

 

 

 

 

2,000

 

Total current liabilities

 

 

7,637

 

 

 

10,880

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Debt facility

 

 

24,978

 

 

 

23,112

 

Other long-term liabilities

 

 

101

 

 

 

513

 

Total liabilities

 

 

32,716

 

 

 

34,505

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized as of September 30, 2020

   and December 31, 2019; 54,139,150 and 50,790,441 shares issued and outstanding

   as of September 30, 2020 and December 31, 2019, respectively

 

 

55

 

 

 

52

 

Additional paid-in capital

 

 

320,084

 

 

 

309,555

 

Accumulated other comprehensive income (loss)

 

 

252

 

 

 

(17

)

Accumulated deficit

 

 

(243,765

)

 

 

(207,892

)

Total stockholders’ equity

 

 

76,626

 

 

 

101,698

 

Total liabilities and stockholders’ equity

 

$

109,342

 

 

$

136,203

 

 

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,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Milestone revenue

 

$

256

 

 

$

 

 

$

256

 

 

$

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

5,603

 

 

$

9,575

 

 

$

24,881

 

 

$

30,058

 

General and administrative

 

 

5,375

 

 

 

2,811

 

 

 

11,474

 

 

 

9,785

 

Impairment of goodwill

 

 

 

 

 

 

 

 

 

 

 

7,420

 

Depreciation and amortization

 

 

63

 

 

 

56

 

 

 

189

 

 

 

253

 

Total operating expenses

 

 

11,041

 

 

 

12,442

 

 

 

36,544

 

 

 

47,516

 

Loss from operations

 

 

(10,785

)

 

 

(12,442

)

 

 

(36,288

)

 

 

(47,516

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

 

(459

)

 

 

5

 

 

 

(952

)

 

 

16

 

Foreign currency exchange gain

 

 

148

 

 

 

116

 

 

 

354

 

 

 

167

 

Tax credit income (expense)

 

 

(27

)

 

 

54

 

 

 

896

 

 

 

1,133

 

Change in fair value of financial instruments

 

 

60

 

 

 

(136

)

 

 

116

 

 

 

(254

)

Total other income (expense)

 

 

(278

)

 

 

39

 

 

 

414

 

 

 

1,062

 

Net loss

 

$

(11,063

)

 

$

(12,403

)

 

$

(35,874

)

 

$

(46,454

)

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.18

)

 

$

(0.30

)

 

$

(0.61

)

 

$

(1.20

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

60,288,993

 

 

 

41,727,259

 

 

 

58,842,436

 

 

 

38,749,002

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on foreign currency translation

 

 

289

 

 

 

(436

)

 

 

323

 

 

 

(570

)

Unrealized gain (loss) on short-term investments

 

 

(156

)

 

 

(12

)

 

 

(53

)

 

 

134

 

Total comprehensive loss

 

$

(10,930

)

 

$

(12,851

)

 

$

(35,604

)

 

$

(46,890

)

 

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, 2020 and 2019

(In thousands, except share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

Common Stock

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Number of

Shares

 

 

Amount

 

 

Additional

Paid-In

Capital

 

 

Accumulated

Deficit

 

 

Other

Comprehensive

Income (Loss)

 

 

Total

 

Balance on December 31, 2019

 

 

50,790,441

 

 

$

52

 

 

$

309,555

 

 

$

(207,892

)

 

$

(17

)

 

$

101,698

 

Issuance of common stock for settlement of RSUs

 

 

12,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon exercise of stock

  options

 

 

41,313

 

 

 

 

 

 

48

 

 

 

 

 

 

 

 

 

48

 

Closing costs for previous issuance of securities in

  private placement

 

 

 

 

 

 

 

 

(120

)

 

 

 

 

 

 

 

 

(120

)

Incremental cost due to modification of detachable

  warrants previously issued with debt instrument

 

 

 

 

 

 

 

 

28

 

 

 

 

 

 

 

 

 

28

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,194

 

 

 

 

 

 

 

 

 

 

1,194

 

Foreign exchange translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(128

)

 

 

(128

)

Unrealized gain on short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

 

 

 

17

 

Net loss incurred

 

 

 

 

 

 

 

 

 

 

 

(15,421

)

 

 

 

 

 

(15,421

)

Balance on March 31, 2020

 

 

50,844,504

 

 

$

52

 

 

$

310,705

 

 

$

(223,313

)

 

$

(128

)

 

$

87,316

 

Issuance of common stock for licensing of assets

 

 

1,000,000

 

 

 

1

 

 

 

2,119

 

 

 

 

 

 

 

 

 

2,120

 

Issuance of common stock upon at the market

  offerings, net

 

 

942,825

 

 

 

1

 

 

 

2,289

 

 

 

 

 

 

 

 

 

2,290

 

Issuance of common stock for settlement of RSUs

 

 

12,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon exercise of stock

  options

 

 

23,233

 

 

 

 

 

 

39

 

 

 

 

 

 

 

 

 

39

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,175

 

 

 

 

 

 

 

 

 

1,175

 

Foreign exchange translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

162

 

 

 

162

 

Unrealized gain on short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

85

 

 

 

85

 

Net loss incurred

 

 

 

 

 

 

 

 

 

 

 

(9,389

)

 

 

 

 

 

(9,389

)

Balance on June 30, 2020

 

 

52,823,312

 

 

$

54

 

 

$

316,327

 

 

$

(232,702

)

 

$

119

 

 

$

83,798

 

Issuance of common stock upon exercise of

  Milestone Warrants, net

 

 

1,303,088

 

 

 

1

 

 

 

1,826

 

 

 

 

 

 

 

 

 

1,827

 

Issuance of common stock for settlement of RSUs

 

 

12,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,931

 

 

 

 

 

 

 

 

 

1,931

 

Foreign exchange translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

289

 

 

 

289

 

Unrealized gain on short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(156

)

 

 

(156

)

Net loss incurred

 

 

 

 

 

 

 

 

 

 

 

(11,063

)

 

 

 

 

 

(11,063

)

Balance on September 30, 2020

 

 

54,139,150

 

 

$

55

 

 

$

320,084

 

 

$

(243,765

)

 

$

252

 

 

$

76,626

 

 

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

3


 

Consolidated Statements of Changes in Stockholders’ Equity

Periods Ended September 30, 2020 and 2019

(In thousands, except share amounts)

(Unaudited)

 

 

 

Stockholders’ Equity

 

 

 

Common Stock

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Number of

Shares

 

 

Amount

 

 

Additional

Paid-In

Capital

 

 

Accumulated

Deficit

 

 

Other

Comprehensive

Income (Loss)

 

 

Total

 

Balance on December 31, 2018

 

 

35,146,096

 

 

$

36

 

 

$

237,702

 

 

$

(129,719

)

 

$

200

 

 

$

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

 

 

$

(141,831

)

 

$

1

 

 

$

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

 

 

 

60

 

 

 

 

 

 

 

 

 

61

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,147

 

 

 

 

 

 

 

 

 

1,147

 

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

 

 

$

(163,770

)

 

$

212

 

 

$

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