DBV Technologies S.A. — 2019 Form 20-F Summary
Business context and reporting period
This is an audited annual report for the fiscal year ended December 31, 2019, not a standalone fourth-quarter filing. DBV is a clinical-stage biopharmaceutical company developing Viaskin epicutaneous immunotherapy; it had no product sales or approved products in 2019. Financial statements are prepared under IFRS in euros.
Financial performance, cash flow and liquidity
| Metric | 2019 | 2018 |
|---|---|---|
| Product revenue | €0 | €0 |
| Other operating income | €13.1m | €14.5m |
| Research and development expense | €101.5m | €107.2m |
| Sales and marketing expense | €18.9m | €32.2m |
| General and administrative expense | €44.4m | €41.4m |
| Operating loss | €151.7m | €166.2m |
| Net loss | €153.6m | €166.1m |
| Basic and diluted loss per share | €4.15 | €5.74 |
| Cash used in operating activities | €128.5m | €136.6m |
| Cash used in investing activities | €5.1m | €8.6m |
| Cash provided by financing activities | €182.8m | €130.7m |
| Cash and cash equivalents at year-end | €172.0m | €122.8m |
Other operating income primarily comprised French research tax credits and income recognized under the Nestlé Health Science collaboration; it is not product revenue. With no product sales, a product gross margin or meaningful sales margin is not reported. 2019 total assets were €241.5m, shareholders’ equity €171.6m, current liabilities €48.1m and total liabilities €69.9m. The company reported no bank debt; liabilities included €22.9m of lease obligations recognized under IFRS 16 and €1.3m of conditional advances.
Material changes versus prior year
- Net loss narrowed by about €12.5m, as total expenses declined 8.8% while operating income declined 9.7%.
- R&D expense decreased 5.3%, mainly following completion of the PEPITES Phase III trial, partly offset by higher personnel costs and continuing studies.
- Sales and marketing expense fell 41.3%, principally as pre-commercial launch marketing spend was reduced. G&A expense increased 7.3%, including higher personnel costs.
- Cash increased €49.3m during 2019, supported by equity financing. April and October offerings raised approximately €202.8m gross combined; issued ordinary shares rose from 30.2m at end-2018 to 47.0m at end-2019.
- IFRS 16 adoption added right-of-use assets and lease liabilities; 2018 comparatives were not restated, affecting year-over-year expense and cash-flow presentation.
Outlook, commentary, risks and unusual items
- Management expected a potential North American launch of Viaskin Peanut in the second half of 2020, subject to FDA approval. The BLA had been accepted for review with an August 5, 2020 target action date.
- After year-end, the FDA raised efficacy questions, including patch-site adhesion; the planned advisory committee meeting was cancelled. DBV was discussing potential supplemental information with FDA and warned that a major amendment could extend review. These are post-year-end developments disclosed in the filing.
- In January 2020, DBV reported PEOPLE open-label extension results: 75.9% of analyzed patients increased eliciting dose from baseline and 51.8% reached at least 1,000 mg peanut protein by year three. These results do not resolve the FDA’s stated questions.
- Management projected existing cash plus approximately €136.4m net proceeds from a February/March 2020 offering would fund its operating plan into the first quarter of 2021. It expects further financing needs and states there is no assurance financing will be available. The financial statements use the going-concern basis and assume financing objectives are achieved.
- Key risks include regulatory delay or non-approval, continued losses and cash burn, dilution or limited access to capital, reliance on third-party manufacturing and suppliers, competition (including FDA-approved Palforzia), and potential clinical-trial disruption from COVID-19.
- A securities class action relating to alleged statements in 2018 was pending; DBV said it considered the allegations without merit and intended to defend the case. The independent auditor issued unqualified opinions on the financial statements and internal controls.
Most important facts for investors to verify
- Current FDA review status, remaining evidence requested on patch adhesion and efficacy, and any change to the BLA action date or launch assumptions.
- Cash runway against actual operating cash use, planned development and commercialization spending, and additional financing requirements.
- Whether PEOPLE results and other clinical data address FDA concerns, and how safety, adherence and efficacy compare with competing therapies.
- Manufacturing readiness, supply continuity, and the commercial-scale capacity and cost of Viaskin patches.
- Share dilution from 2019 and 2020 offerings and outstanding equity awards; assess lease obligations and other contractual commitments alongside reported cash.