DBV Technologies S.A. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. Amounts below are in U.S. dollars; financial statement amounts are generally in millions unless stated otherwise. DBV is a clinical-stage biotechnology company developing Viaskin epicutaneous immunotherapy and has no product sales.
Financial performance and position
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Sales | $0 | $0 | $0 | $0 |
| Operating income | $1.3 | $4.2 | $2.8 | $12.5 |
| Operating expenses | $25.7 | $33.9 | $87.9 | $131.2 |
| Net loss | $24.0 | $31.0 | $84.1 | $120.1 |
| Net loss per share | $0.44 | $0.56 | $1.53 | $2.23 |
- Operating income primarily reflects French research tax credits and amounts recognized under the Nestlé Health Science collaboration, not product sales. Lower collaboration-related income, reflecting delays in Phase II enrollment, drove much of the year-over-year decline in operating income.
- Operating expenses fell 24% in Q3 and 33% for the nine-month period. Lower R&D and sales and marketing spending reflected workforce reductions and cost controls; nine-month expenses also benefited from no repeat of 2020 restructuring costs. Q3 external clinical costs increased as CHAMP was completed and PREQUAL began.
- No meaningful operating margin is reported for this pre-revenue company. Nine-month operating cash use was $89.5 million, versus $132.1 million in 2020.
- Cash and cash equivalents were $98.2 million at September 30, 2021, down from $196.4 million at December 31, 2020. Total assets were $170.9 million and shareholders’ equity $116.9 million. Total liabilities were $54.0 million.
- Reported financial debt was $0.7 million, all current; the company reported no bank debt. Lease liabilities were $11.0 million in total. Cash declined by $98.2 million over the nine months, including an $8.6 million unfavorable foreign-exchange effect. Financing cash flow was approximately neutral in 2021; 2020 included $150.0 million of net equity proceeds.
Material changes and outlook
- Management estimated that September 30 cash would fund operations into Q3 2022, but stated that available cash was not projected to support the operating plan for the next 12 months. The filing therefore identifies substantial doubt about the company’s ability to continue as a going concern. DBV intends to seek additional capital; its June 2021 shelf registration permits offerings of up to $250 million, but financing is not assured.
- For U.S. Viaskin Peanut, the FDA’s 2020 Complete Response Letter cited patch adhesion, the need for patch modifications and further clinical and manufacturing data, with no safety concerns raised. In October 2021, the FDA requested a stepwise approach and further data on allergen uptake comparability before additional feedback on the STAMP protocol. DBV said STAMP would not begin until it received complete FDA feedback; the filing gives no clear date for U.S. resubmission.
- In Europe, EMA review continued, with one Major Objection remaining regarding limitations of the evidence, including reliance on a single pivotal study. DBV estimated an EMA decision on potential authorization in Q1 2022; this was an estimate, not an assurance.
- COVID-19-related enrollment delays affected clinical studies and increased expected costs for the Nestlé collaboration Phase II trial. Management also cited potential disruption to operations and financing markets from the pandemic.
- The 2020 restructuring reduced average headcount to 105 for the first nine months of 2021 from 291 in the comparable period; DBV expected cost-reduction measures to be fully implemented in Q4 2021. The company recorded $13.3 million in contingencies, including $10.8 million related to estimated collaboration-trial losses.
- A securities class action was repleaded on September 30, 2021 after the court dismissed the prior complaint without prejudice. DBV said it intended to defend the case and believed it would not materially affect its financial position, results or liquidity.
Important facts for investors to verify
- Cash runway assumptions, actual quarterly cash burn and the availability, timing and dilution or other terms of additional financing.
- FDA requirements and timing for uptake-comparability work, STAMP initiation and any future U.S. BLA resubmission.
- EMA’s resolution of its remaining Major Objection and the timing and outcome of its review.
- Enrollment progress and cost estimates for the Nestlé collaboration Phase II trial, including the recorded loss-at-completion contingency.
- Developments in the securities litigation and any change in the company’s going-concern assessment.