InflaRx N.V. — FY2020 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2020. This is an annual report, not a standalone fourth-quarter filing. InflaRx is a clinical-stage biopharmaceutical company developing anti-C5a therapies; it had no approved products or product-sales revenue. Financial statements are prepared under IFRS in euros.
Financial performance and position
| Metric | FY2020 | FY2019 |
|---|---|---|
| Product revenue | None | None |
| Research and development expenses | €25.7 million | €44.6 million |
| General and administrative expenses | €8.5 million | €12.5 million |
| Operating loss | €33.9 million | €56.8 million |
| Net loss | €34.0 million | €53.3 million |
| Loss per share, basic and diluted | €1.26 | €2.05 |
| Net cash used in operating activities | €36.5 million | €43.2 million |
Gross or operating margins are not meaningful because the company reported no product revenue. Lower 2020 R&D spending primarily reflected completion of the HS Phase IIb trial in 2019 and lower related trial and manufacturing costs; 2020 included €4.9 million of costs for the severe-COVID-19 study. Lower G&A also reflected reduced share-based compensation. Net financial results worsened from €3.5 million of income in 2019 to a €0.04 million loss in 2020, mainly due to higher foreign-exchange losses and lower interest income. The €5.95 million currency translation loss increased total comprehensive loss to €39.9 million.
At year-end, cash and cash equivalents were €26.0 million and marketable securities were approximately €54.3 million. Total assets were €88.2 million, equity €77.9 million and total liabilities €10.4 million. The company reported no financial borrowings; liabilities chiefly comprised payables and lease liabilities (€0.56 million). Operating cash burn remained substantial. Management stated that available cash and financial assets were expected to fund the current plan for at least 24 months, while a risk-factor discussion referred to at least 18 months; both estimates are subject to assumptions and changing circumstances. The company said further funding would be needed to advance development.
Material changes and financing
- Cash and marketable securities declined from approximately €115.7 million at year-end 2019 to about €80.3 million at year-end 2020, while operating cash use was €36.5 million.
- The 2020 at-the-market program generated €9.0 million net proceeds from 1,958,186 shares. A further 610,022 shares generated €2.8 million net proceeds after year-end.
- On March 1, 2021, the company closed a public offering of 15 million shares at $5.00 each, with one immediately exercisable warrant per share at $5.80. Gross proceeds were $75 million; disclosed net proceeds were approximately $70 million. The offering and subsequent ATM sales diluted existing shareholders.
- Year-end outstanding common shares were 28,228,415. The filing reports no material litigation affecting financial position and no off-balance-sheet arrangements other than operating leases and ordinary-course third-party contracts.
Outlook, operations and principal risks
- Pipeline and plans: Vilobelimab was being studied in severe COVID-19, HS, AAV and pyoderma gangrenosum (PG); a Phase II study in cutaneous squamous cell carcinoma (cSCC) was planned for 2021. IFX-2 remained preclinical. Management expected development costs to rise as trials advanced and said additional capital would likely be required.
- HS: The 179-patient Phase IIb SHINE study failed its primary HiSCR dose-response endpoint. The company reported favorable post-hoc analyses and open-label extension findings, but these do not replace a successful prespecified pivotal endpoint. The FDA did not endorse IHS4 as the primary endpoint at the end-of-Phase-II meeting. A request for a Special Protocol Assessment was submitted in March 2021, after the reporting period; FDA agreement was not assured.
- COVID-19: In the exploratory Phase II portion, the primary oxygenation-index endpoint showed no difference between groups. Twenty-eight-day mortality was 2/15 (13%) with vilobelimab versus 4/15 (27%) in controls; the small study was not powered to establish statistical significance. The Phase III study planned enrollment of up to 400 patients, with 28-day mortality as its primary endpoint.
- Other trials: U.S. AAV enrollment was reduced from a planned 36 patients to 19; the European AAV study was also streamlined amid the pandemic. PG enrollment was slower than expected. Trial completion, recruitment and readouts remained uncertain.
- Key risks: The company has a history of losses, no commercial revenue and dependence on vilobelimab, clinical-trial success, regulatory approval and additional financing. Other material risks include trial delays or failures, COVID-19 effects, reliance on third-party clinical and manufacturing providers (including a sole vilobelimab clinical-supply manufacturer in China), foreign-exchange exposure without hedging, competition, intellectual-property challenges, reimbursement uncertainty and potential shareholder dilution.
- Other items: Management reported effective disclosure controls and internal control over financial reporting; the auditor issued an unqualified IFRS opinion on the 2020 statements. The auditor did not attest to internal-control effectiveness. InflaRx believed it was likely a PFIC for U.S. tax purposes in 2018–2020. It did not expect to pay dividends in the foreseeable future.
Investor verification priorities
- Track the Phase III severe-COVID-19 trial’s enrollment, interim analysis and results; interpret the Phase II mortality comparison in light of its small sample and negative primary endpoint.
- Confirm whether the FDA agrees to the proposed HS Phase III protocol and endpoint, and distinguish prespecified results from post-hoc findings.
- Reconcile runway assumptions (18 versus 24 months) and monitor cash burn, trial spending and any further financing needs.
- Assess the effects of the 2021 share-and-warrant offering, subsequent ATM issuance and outstanding equity awards on share count and dilution.
- Monitor AAV, PG and cSCC recruitment and data timing, as well as the availability and scalability of clinical supply and exposure to currency movements.