Nanobiotix S.A. — Form 6-K Summary
Reporting period: Six months ended June 30, 2021. The report was furnished on September 8, 2021 and includes unaudited interim condensed consolidated financial statements prepared under IFRS and IAS 34.
Business context
Nanobiotix is a French biotechnology company developing physics-based oncology treatments, primarily NBTXR3, which is authorized in Europe as Hensify for certain soft-tissue sarcoma treatments. The company’s principal focus is advancing NBTXR3 in head and neck cancer, immuno-oncology and additional solid-tumor indications. The company operates as a single research and development segment and had 98 employees at June 30, 2021.
Financial performance and liquidity
| Metric | Six months ended June 30, 2021 | Six months ended June 30, 2020 | Change |
|---|---|---|---|
| Total revenues | €10 thousand | €37 thousand | Down €27 thousand |
| Other income | €1.309 million | €1.411 million | Down €102 thousand |
| Total revenues and other income | €1.319 million | €1.448 million | Down €129 thousand |
| Research and development expenses | €15.506 million | €13.077 million | Up €2.429 million |
| SG&A expenses | €10.176 million | €6.755 million | Up €3.421 million |
| Total operating expenses | €31.096 million | €19.832 million | Up €11.264 million |
| Operating loss | €29.778 million | €18.384 million | Loss increased €11.394 million |
| Net loss | €30.420 million | €20.579 million | Loss increased €9.841 million |
| Basic and diluted loss per share | €0.88 loss | €0.91 loss | Improved by €0.03 |
| Net cash used in operating activities | €15.071 million | €12.879 million | Use increased €2.192 million |
| Cash and cash equivalents at period end | €102.336 million | €26.590 million | Period-end comparative balance |
Revenue primarily reflected the rebilling of materials and services under the former PharmaEngine collaboration. The €20 million non-refundable LianBio upfront payment was not recognized as revenue; €16.555 million was recorded as deferred revenue and contract liabilities, with the remainder reflected in the accounting presentation of the contract.
Operating costs included €5.414 million of PharmaEngine termination payments. Financial loss was €640 thousand, compared with €2.194 million in the prior-year period, partly because of €2.511 million of foreign-exchange gains.
At June 30, 2021, total assets were €123.915 million, shareholders’ equity was €41.431 million and total financial liabilities were €50.718 million. Cash declined from €119.151 million at December 31, 2020, primarily reflecting operating cash use, and management stated that available cash was sufficient to support operations for at least twelve months after publication of the interim financial statements.
Material changes and significant events
- Nanobiotix and PharmaEngine mutually terminated their Asia-Pacific licensing and collaboration agreement. Nanobiotix regained regional rights and paid PharmaEngine $6.5 million during the period, with up to an additional $6 million potentially payable upon specified future events, plus low-single-digit royalties on regional sales.
- In May 2021, Nanobiotix entered into an exclusive, royalty-bearing agreement with LianBio covering China, Hong Kong, Macau, Thailand, Taiwan, South Korea and Singapore. LianBio received regional development and commercialization rights, will fund regional development and commercialization, and is expected to enroll patients in five global registrational studies. Nanobiotix received a $20 million upfront payment and may receive up to $220 million in milestone payments and tiered low-double-digit royalties.
- Clinical development continued in seven indications or clinical programs. The company initiated a Phase I esophageal cancer study at MD Anderson and continued head and neck cancer and immunotherapy programs.
- At ASCO 2021, Study 102 Expansion reported an 82.5% objective response rate and a 62.5% complete response rate among 40 evaluable patients at a median follow-up of 8.1 months. Study 1100 reported tumor regression in 10 of 13 evaluable patients, including patients previously resistant to anti-PD-1 therapy. These are early-stage, non-pivotal clinical results.
- Laurent Condomine resigned as chairman of the Supervisory Board and was succeeded by Dr. Gary Phillips. Bart Van Rhijn became Chief Financial Officer and joined the Executive Board effective June 1, 2021. Former CFO Philippe Mauberna left the company and was entitled to a €255 thousand indemnity, prorated variable compensation and specified equity-vesting benefits.
Guidance, outlook and risks
- The company expected to report progression-free and overall-survival analyses from Study 102 at a medical conference in the fourth quarter of 2021 and expected to initiate the NANORAY-312 Phase III head and neck cancer study late in the fourth quarter of 2021.
- The company expected to provide updated Study 1100 data in the fourth quarter of 2021 and planned discussions with the FDA regarding a potential immunotherapy registration pathway in the second half of 2021.
- COVID-19 caused delays in patient enrollment, site activation, monitoring and data review, although management stated that it had not negatively affected liquidity or funding sources.
- The company remains exposed to clinical, regulatory, manufacturing, commercialization, intellectual-property, partnership and financing risks. NBTXR3’s development and potential regulatory approval remain uncertain.
- Management disclosed a material weakness in internal control over financial reporting. Advance payments to contract research organizations were initially expensed rather than recorded as prepaid expenses, requiring a material adjustment to the June 30, 2021 interim financial statements. Management stated that prior-period audited financial statements were not restated and that remediation was underway.
- The EIB financing includes fixed and variable interest obligations linked to future sales. The company did not request the third EIB tranche because the applicable conditions were not met by July 31, 2021.
Most important facts to verify
- Whether NANORAY-312 began on the expected timeline and whether enrollment targets, including LianBio’s commitments, were achieved.
- Subsequent clinical efficacy, safety and durability results for Study 102 and Study 1100, including the significance of reported serious adverse events and deaths.
- The status and remediation of the disclosed material weakness in internal control over financial reporting.
- Cash burn, remaining liquidity runway and the timing of debt, lease and EIB-related payments.
- Whether LianBio milestone obligations, regional development activities and future product sales generate revenue beyond the currently deferred upfront payment.
- Future contingent payments to PharmaEngine and the potential FDA-related payment obligation under the MD Anderson collaboration.