Pharvaris N.V. — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone Q4 report. Filed April 10, 2024. Financial statements are audited and prepared under IFRS as issued by the IASB, in euros.
Business context and pipeline
Pharvaris is a clinical-stage biopharmaceutical company with no approved products or product revenue. Its lead candidate, oral bradykinin-B2-receptor antagonist deucrictibant, is being developed for hereditary angioedema (HAE): immediate-release PHVS416 for on-demand treatment and extended-release PHVS719 for prevention.
- Phase 2 RAPIDe-1: The company reported that all three PHVS416 dose levels met the primary and key secondary endpoints for treatment of HAE attacks; rescue medication use was lower than with placebo.
- Phase 2 CHAPTER-1: Deucrictibant 40 mg/day reduced mean monthly HAE attack rate by 84.5% versus placebo (p=0.0008) over the 12-week treatment period. The study used twice-daily PHVS416 as proof of concept; its open-label extension was ongoing.
- The FDA lifted the U.S. on-demand clinical hold in June 2023 and the prophylaxis hold in January 2024, after review of a 26-week rodent toxicology study. The filing says a global Phase 3 on-demand study had been initiated; the prophylaxis Phase 3 study and long-term extension were planned.
Financial performance and liquidity
| Metric (€ unless noted) | FY2023 | FY2022 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | 65.6 million | 57.4 million |
| General and administrative expense | 31.3 million | 29.3 million |
| Total operating expenses | 96.9 million | 86.7 million |
| Finance income/(expense), net | (2.9) million | 11.1 million |
| Net loss | 100.9 million | 76.3 million |
| Basic and diluted loss per share | €2.63 | €2.27 |
| Net cash used in operating activities | 93.0 million | 67.2 million |
| Cash and cash equivalents at year-end | 391.2 million | 161.8 million |
Operating expenses rose 12% year over year. R&D increased 14%, reflecting higher personnel, clinical and nonclinical costs, including the additional toxicology work; manufacturing costs fell 42% as drug-substance manufacturing had been concentrated in 2022. G&A rose 7%, including commercial buildout costs. The swing in net finance results was mainly due to foreign-exchange movements, including translation of U.S.-dollar bank balances.
At December 31, 2023, total assets were €398.7 million, equity was €384.0 million and total liabilities were €14.6 million. The company reported no borrowings; lease liabilities were €0.24 million. Cash increased primarily after equity financing: net financing cash flow was €325.4 million, including proceeds from share and pre-funded warrant offerings, net of transaction costs. Year-end issued shares numbered 52,290,212.
Management said available cash was expected to fund its operating plan and working capital needs for at least 12 months from issuance of the financial statements. It does not expect positive operating cash flow in the foreseeable future and remains dependent on financing until products are successfully developed, approved and commercialized.
Material changes, outlook and risks
- Financing: 2023 included a June private placement and a December underwritten offering. The December offering generated net proceeds of €261.6 million; its 1.375 million pre-funded warrants were exercised in January 2024.
- Spending and obligations: R&D commitments under non-cancellable service contracts totaled €49 million at year-end, of which €44.8 million was committed for 2024. These exclude contingent AnalytiCon milestones and royalties; up to €10.5 million of potential milestones remained, plus low-to-mid single-digit tiered royalties on licensed-product sales.
- Guidance: Management expected R&D expense to increase in 2024 as PHVS416 and PHVS719 advance and potential expansion programs are explored. The filing provides no numerical revenue or earnings guidance.
- Key risks: Clinical efficacy and safety remain unproven in pivotal trials; regulatory requests, trial enrollment, manufacturing and third-party dependence could delay development. Competition includes approved injectable HAE therapies, generic icatibant, oral berotralstat and developing candidates. Pricing, reimbursement, foreign-exchange and access to future capital are additional risks.
- Controls: Management concluded disclosure controls and internal control over financial reporting were not effective at December 31, 2023 because of material weaknesses involving risk assessment and control documentation, staffing and accounting expertise, review and segregation of duties, and IT general controls. A remediation plan was underway, including a new accounting system operational from January 2024. The auditor gave an unmodified opinion on the IFRS financial statements but did not attest to ICFR.
- Subsequent event: The company announced appointment of a CFO effective April 15, 2024.
Most important facts for investors to verify
- Current enrollment, timing and regulatory status of the PHVS416 and PHVS719 Phase 3 programs, including any updated requirements after the clinical holds were lifted.
- Whether Phase 2 efficacy and safety results are replicated in larger, pivotal trials, and how the extended-release formulation performs with repeated dosing.
- Cash runway against actual cash burn, the €44.8 million of 2024 commitments, and any additional financing needs or dilution.
- Progress and independent evidence of remediation of the disclosed material weaknesses in financial reporting controls.
- Commercial differentiation, market access and reimbursement prospects versus approved and emerging HAE treatments; the company has no head-to-head trial evidence versus icatibant.