Vivani Medical, Inc. — 2023 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter earnings report; it compares full-year 2023 with full-year 2022. Filed March 26, 2024.
Business context
Vivani is a preclinical biopharmaceutical company developing miniature, subdermal drug implants using its NanoPortal technology for long-duration drug delivery. It has no products approved for sale and has not generated revenue. Its principal programs are NPM-115 (exenatide for weight management), NPM-119 (exenatide for type 2 diabetes), NPM-139 (semaglutide for weight management) and partnered feline program OKV-119. Vivani also owns Cortigent, which holds its legacy neuromodulation business.
Financial performance and liquidity
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | None | None |
| Research and development expense, net of grants | $17.0 million | $14.2 million |
| General and administrative expense, net of grants | $10.0 million | $7.1 million |
| Total operating expenses | $27.0 million | $21.2 million |
| Net loss | $25.7 million | $13.9 million |
| Basic and diluted loss per share | $0.50 | $0.36 |
| Cash used in operating activities | $23.7 million | $18.8 million |
There are no meaningful product margins because the company has no product sales. The 2023 net loss increased by $11.8 million, reflecting higher operating expenses and the absence of the $6.9 million bargain-purchase gain recognized in 2022 following the Second Sight merger. Higher interest income partly offset the increase.
At December 31, 2023, cash and cash equivalents were $20.7 million; restricted cash was $1.3 million, for total cash, cash equivalents and restricted cash of $22.0 million. Working capital was $17.3 million, down from $40.7 million a year earlier. Total liabilities were $25.0 million, including $20.7 million of operating lease liabilities; the filing does not report material financial borrowings. Capital expenditures were $0.9 million, and financing activities provided $0.1 million in 2023. The company reported an accumulated deficit of $98.4 million.
After year-end, Vivani received approximately $15.0 million gross proceeds from a March 2024 registered direct offering of 3,947,368 shares at $3.80 per share, accompanied by warrants for up to the same number of shares at a $3.80 exercise price. Management estimated available cash would fund planned obligations into the second half of 2025, while stating continued operations depend on developing profitable operations and/or raising additional capital.
Material developments and outlook
- The FDA placed the NPM-119 LIBERATE-1 first-in-human study on full clinical hold in August 2023, primarily over insufficient chemistry, manufacturing and controls information. Vivani planned to submit a response in the first half of 2024; the study had not begun by the filing.
- Management’s stated plans included seeking to lift the NPM-119 hold, filing an NPM-115 IND before the end of 2024, initiating a first-in-human study when regulatory clearances permit, and advancing NPM-139 feasibility work in 2024. These are plans, not assurances.
- In February 2024, Vivani reported preclinical NPM-115 weight loss of approximately 20% versus sham control after 28 days in obese mice, comparable to semaglutide injections in that study. These are animal data, not human clinical results. The company also disclosed NPM-139 as a semaglutide implant with potential once-yearly administration.
- Vivani established an Australian subsidiary in the fourth quarter of 2023 to support studies. Its proposed Australian NPM-119 study had not received ethics approval; the cited reason was the existing FDA hold.
- A new Alameda facility was occupied in September 2023. A 10-year-plus lease contributes to $20.7 million of lease liabilities and scheduled lease payments of $30.8 million before imputed interest.
- Vivani funds Cortigent under a support agreement through the earlier of December 31, 2024 or Cortigent’s IPO. Under the amendment, Cortigent is to repay $1.5 million at the end of the funding term and issue Vivani a five-year, 5% promissory note for $2.0 million; remaining amounts due under the agreement are to be forgiven. Cortigent’s proposed IPO is not assured.
Risks, contingencies and other notable items
- Funding and going concern: recurring operating losses and negative operating cash flow, no product revenue, and reliance on future financing create significant funding risk. The cash runway estimate includes events after year-end and is not a guarantee.
- Clinical, regulatory and manufacturing risk: all candidates remain early-stage; NPM-119’s clinical hold highlights CMC and regulatory execution risks. Development, approval and commercialization are uncertain and costly.
- Competition and adoption: established GLP-1 products and larger competitors may limit market opportunity. Adoption, tolerability, reimbursement and pricing remain unproven.
- Dilution: the March 2024 financing issued shares and warrants, which could result in additional shares if exercised. The company had 54,978,000 common shares outstanding as of March 22, 2024, versus 51,031,000 at year-end 2023.
- Litigation: a Paris court previously ordered payment to Pixium Vision of approximately €1.55 million net of a credit for the prior $1.0 million payment. Vivani appealed; Pixium cross-appealed in January 2024. Vivani carried a $1.675 million litigation accrual. The outcome remains uncertain.
- Other: three European patent oppositions challenge Cortigent patents. Vivani also identifies intellectual-property, third-party manufacturing, cybersecurity, reimbursement, personnel and market-volatility risks.
The independent auditor issued an unqualified opinion on the financial statements and reported no critical audit matters. Management concluded disclosure controls and internal control over financial reporting were effective as of year-end; the auditor did not attest to internal-control effectiveness.
Most important facts for investors to verify
- Whether the FDA hold on NPM-119 was lifted, what CMC deficiencies remain, and whether a human trial has actually started.
- Current cash, operating burn and updated runway after the March 2024 financing, including offering costs and warrant-related potential dilution.
- Whether NPM-115’s animal findings are replicated and translated into human safety, pharmacokinetic and efficacy results; distinguish preclinical claims from clinical evidence.
- Progress, regulatory and intellectual-property requirements, and development costs for NPM-139, including rights to semaglutide.
- The status and cash impact of the Pixium appeal and Cortigent funding obligations, repayment and proposed IPO.