Immunic, Inc. — 2019 Form 10-K
Reporting period: Fiscal year ended December 31, 2019. The filing was signed March 16, 2020. Immunic is a clinical-stage biopharmaceutical company with no approved products or product-sales revenue. Its financial statements report Immunic AG as the accounting predecessor following the April 12, 2019 reverse acquisition of Vital Therapies; 2018 comparatives therefore are not fully comparable with 2019.
Financial performance and position
| Metric | 2019 | 2018 |
|---|---|---|
| Revenue from product sales | None | None |
| Research and development expense | $22.5 million | $9.6 million |
| General and administrative expense | $14.5 million | $2.4 million |
| Total operating expenses | $37.0 million | $12.0 million |
| Net loss | $34.9 million | $11.5 million |
| Net loss per share | $4.52 | $13.63 |
| Cash used in operating activities | $28.5 million | $9.7 million |
For the fourth quarter of 2019, operating expenses were $8.2 million and net loss was $7.7 million; basic and diluted loss per share was $0.75.
- Cash and cash equivalents were $29.4 million at year-end, versus $13.1 million in 2018. Current assets were $32.2 million and current liabilities $7.1 million.
- Total liabilities were $7.6 million, including $0.5 million of long-term operating lease liabilities. The filing reports no borrowings or other financial debt.
- Stockholders’ equity was $58.4 million, including $33.0 million of goodwill recognized in the reverse acquisition. Accumulated deficit was $59.9 million.
- Financing activities provided $34.9 million in 2019, including approximately $30.0 million from the pre-transaction financing and $4.9 million net from ATM sales. Investing activities provided $10.5 million, including cash acquired in the transaction and ELAD asset-sale proceeds.
- Margins are not meaningful because the company had no product revenue. The filing does not provide a clear product-level profitability measure.
Changes and unusual items
- Net loss increased by $23.4 million year over year. R&D expense rose mainly with IMU-838 Phase 2 trials, drug supply, Crohn’s disease trial preparation, and IMU-856 work.
- G&A expense increased by $12.1 million, including $6.4 million of transaction-related stock compensation, $1.7 million of investment banking and legal costs, and $2.6 million of public-company costs.
- The transaction was accounted for as a reverse acquisition, with Immunic AG as accounting acquirer. The 2019 results include transaction-related effects and post-transaction Vital activity, while historical comparative results reflect Immunic AG.
- In April 2019, the company issued shares to settle a contingent 4SC payment, recording approximately $1.5 million of expense. A sale of legacy ELAD assets generated proceeds and other income.
Outlook, risks, and contingencies
- Management expected year-end cash and working capital to fund operations into, but not beyond, the first quarter of 2021. The company stated that additional capital—likely including equity financing—would be needed and that substantial doubt existed about its ability to continue as a going concern. The audited statements were prepared on a going-concern basis.
- An effective shelf registration allowed offerings up to $200 million; $34.6 million remained available under the $40 million ATM at year-end. Availability does not assure successful financing, and equity issuance may dilute shareholders.
- Management expected R&D spending and losses to rise as development continued. Key stated milestones were IMU-838 RRMS Phase 2b top-line data expected in Q3 2020 and UC data expected in Q4 2021. A Phase 2 Crohn’s disease study was under consideration.
- IMU-935 entered Phase 1 in September 2019. IMU-856 remained in preclinical development at year-end; the company exercised its Daiichi Sankyo license option on January 5, 2020, paying an undisclosed upfront fee and becoming subject to potential milestones and royalties.
- Key risks include clinical failure or delay, regulatory approval uncertainty, dependence on external manufacturers and trial providers, competition, intellectual-property protection, and further financing needs. The filing also identified potential coronavirus-related disruption to clinical sites, enrollment, monitoring, and data collection.
- No material pending or threatened litigation was reported. Contractual obligations at year-end included $2.8 million of development-program purchase commitments expected in 2020 and $0.8 million of operating lease payments.
Most important facts for investors to verify
- Whether the company raised sufficient capital to extend its stated runway beyond Q1 2021, and the resulting dilution and cash position.
- Actual outcomes and timing of the IMU-838 RRMS and UC trials, including whether endpoints and safety requirements were met.
- Whether clinical and regulatory plans for Crohn’s disease, PSC, IMU-935, and IMU-856 advanced as anticipated, and the financial terms of the IMU-856 license.
- The comparability of reported annual results given the reverse acquisition and substantial one-time transaction costs.
- Whether trial execution, foreign-exchange exposure, and the identified coronavirus risks affected spending, enrollment, or development schedules.