Business context and reporting period
Evaxion Biotech A/S is a Danish clinical-stage biotechnology company developing AI-designed cancer immunotherapies and infectious-disease vaccines. This Form 20-F reports the fiscal year ended December 31, 2022; it is not a standalone fourth-quarter report. Financial statements are audited, prepared under IFRS as issued by the IASB, and presented in U.S. dollars.
The company had no product revenue in 2022, 2021, or 2020. Its two clinical-stage candidates are personalized cancer therapies EVX-01 and EVX-02; EVX-03 and its bacterial and viral vaccine candidates remained preclinical at year-end.
Financial and operating metrics
| Metric (USD millions, except per-share data) | 2022 | 2021 | Change |
|---|---|---|---|
| Revenue | None | None | No revenue generated |
| Research and development expense | 17.1 | 19.6 | Down 2.5 |
| General and administrative expense | 8.2 | 6.3 | Up 2.0 |
| Operating loss | (25.3) | (25.8) | Improved 0.6 |
| Net loss | (23.2) | (24.5) | Improved 1.4 |
| Basic and diluted loss per share | (0.98) | (1.26) | Improved |
| Net cash used in operating activities | (25.8) | (21.9) | Use increased 3.8 |
| Cash and cash equivalents at year-end | 13.2 | 32.2 | Down 19.0 |
| Total assets | 22.0 | 40.2 | Down 18.1 |
| Total liabilities | 13.7 | 7.7 | Up 6.0 |
| Total equity | 8.3 | 32.4 | Down 24.1 |
Margins are not meaningful because the company had no revenue. Finance income was $2.8 million, including $2.4 million of foreign-exchange gains and a $0.4 million gain on remeasurement of warrant liabilities. Finance expenses were $1.5 million, including interest and loan costs. The income-tax benefit was $0.8 million. The company wrote off $87,000 of intangible assets in 2022.
Year-end current assets were $17.0 million and current liabilities were $3.8 million. Borrowings were $8.0 million in total, including the EIB loan and a loan from the lessor; lease liabilities were a further $2.3 million. The EIB loan’s first €7 million tranche was drawn in February 2022 and is due six years after disbursement. The company said it did not expect to draw the remaining two tranches under its current plans. Operating cash outflow exceeded the net loss, partly reflecting working-capital movements, including higher prepayments.
Financing cash flow was $7.9 million in 2022, primarily from the EIB drawdown; investing cash outflow was $0.3 million. No material off-balance-sheet arrangements were reported.
Material changes versus prior periods
- Net loss narrowed by $1.4 million from 2021, as research and development expense fell by $2.5 million. General and administrative expense rose by $2.0 million, primarily due to higher professional fees associated with operating as a public company.
- Operating cash use rose from $21.9 million to $25.8 million, while year-end cash fell from $32.2 million to $13.2 million.
- Finance income increased to $2.8 million, mainly from foreign-exchange gains; finance expenses also increased, including costs associated with the EIB borrowing.
- Cash financing was substantially lower than in 2021, when IPO and follow-on offering proceeds drove $49.8 million of financing cash flow.
Outlook, risks, contingencies and unusual items
Funding and going concern: The company expects continuing losses and negative operating cash flows and states that additional financing is needed. Management’s updated 2023 budget indicated cash runway only until approximately the beginning of December 2023. The auditor’s report includes a going-concern explanatory paragraph, and the financial statements contain no adjustments that might result from the uncertainty. The company plans to seek equity, collaboration, licensing, or other financing and says it may adjust spending. In March 2023 it reorganized and reprioritized programs to focus operations and reduce costs. After year-end, it reported approximately $4.2 million of net proceeds from ATM sales through March 3, 2023.
Development outlook: EVX-01 is in a Phase 2 trial with pembrolizumab for advanced or metastatic melanoma; the first patient was dosed in September 2022. The company planned an interim readout in the fourth quarter of 2023 and a full readout in 2025. The FDA granted EVX-01 Fast Track designation in January 2023. EVX-03 was planned to enter Phase 1 in the second half of 2023, subject to development and regulatory progress. These are company plans, not assurances of timing or success.
In April 2023, after the reporting year, the company presented EVX-02 Phase 1/2a results: all 10 patients who completed the full eight-immunization schedule were relapse-free at their last assessment, and nine were relapse-free at the 12-month end-of-study visit. The filing describes a small early-stage study; these findings do not establish efficacy in larger or later-stage trials.
Key risks and contingencies: Candidates remain experimental, with no approved products and no established revenue source. Development depends on uncertain clinical outcomes, regulatory approvals, financing, collaboration partners, and third-party manufacturing. The filing highlights clinical and manufacturing delays, possible adverse events, competition, intellectual-property risks, and exposure to supply-chain, geopolitical, economic, and currency disruptions.
SSI filed a Danish court action in 2022 claiming ownership, or alternatively co-ownership, of a patent application relating to CAF®09b and EVX-01. Evaxion disputes the claim and says its counsel did not expect a material impact on future results or operations; the case remained unresolved in the filing, and the parties were discussing a possible settlement.
Controls: Management concluded that disclosure controls and internal control over financial reporting were ineffective at December 31, 2022, citing material weaknesses in the control framework and insufficient technical accounting and supervisory resources. Remediation was ongoing. The company also reported an $87,000 intangible-asset write-off and significant foreign-exchange effects.
Most important facts for investors to verify
- Whether the company raised sufficient capital after the reported March 2023 ATM sales to support operations beyond the stated December 2023 runway, and the resulting dilution and financing terms.
- Current cash, operating burn, debt service, and actual availability of any remaining financing facilities.
- EVX-01 Phase 2 enrollment, interim results, trial design, and timing; distinguish company targets from achieved milestones.
- Full EVX-02 study data and whether its small early-stage results are replicated in larger studies.
- Status and potential consequences of the SSI patent dispute, and progress in remediating the material weaknesses in financial reporting controls.