vTv Therapeutics Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter report. vTv is a clinical-stage biopharmaceutical company with no approved products; its lead program is oral candidate TTP399, under development as an adjunct to insulin for type 1 diabetes.
Financial performance and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $2.0 million | $4.0 million |
| Research and development expense | $12.4 million | $13.3 million |
| General and administrative expense | $12.2 million | $12.3 million |
| Operating loss | $22.5 million | $21.7 million |
| Net loss attributable to vTv Therapeutics Inc. | $19.2 million | $13.0 million |
| Net loss per Class A share | $0.26 | $0.21 |
| Net cash used in operating activities | $16.0 million | $19.3 million |
- Revenue is from collaboration and licensing arrangements, not product sales. One customer accounted for all FY2022 revenue.
- FY2022 R&D spending fell modestly, but TTP399-related costs increased by about $7.0 million, partly offset by completion of HPP737 work and lower payroll and severance costs.
- Other expense was $2.7 million, primarily reflecting an unrealized loss on the Reneo investment and changes in warrant fair value. The prior year included $4.1 million of other income.
- At year-end, cash and cash equivalents were $12.1 million; current assets were $27.1 million and current liabilities $7.7 million. The balance sheet included a $12.2 million G42 promissory note receivable, $18.7 million of contract liabilities, and $224,000 of current notes payable. Long-term investments were $5.6 million.
- Cash declined by $1.3 million during FY2022. Operating cash use was $16.0 million, investing cash use was negligible, and financing provided $14.8 million.
- In May 2022, G42 agreed to invest $25.0 million for shares: $12.5 million was paid at closing and the balance was initially payable under a promissory note. In February 2023, vTv received $12.0 million to settle that note early, after a 3.75% discount. CinPax invested $10.0 million, with its $4.0 million deferred payment received in November 2022.
- The company reported an accumulated deficit of $265.5 million and substantial doubt about its ability to continue as a going concern. Management estimated available resources, including the February 2023 G42 payment, would fund operations through the end of Q2 2023; its plan was to finance operations into Q1 2024 through financing, partnering, licensing, or equity-sale facilities. Those plans are uncertain.
Material changes and business developments
- Management prioritized TTP399 following a 2021 strategic refocus that included a workforce reduction of approximately 65%. U.S. development of HPP737 remains paused while vTv evaluates strategic options.
- FY2022 revenue fell by $2.0 million year over year, while the company-attributable net loss increased by $6.2 million. The loss included the adverse swing in investment and warrant fair-value items.
- Class A shares outstanding increased from 66.9 million at December 31, 2021 to 81.5 million at December 31, 2022, including shares issued to G42 and CinPax. Potential additional dilution includes ATM and Lincoln Park equity-sale capacity, warrants, and equity awards.
- Paul Sekhri became CEO in August 2022; Steven Tuch became CFO in December 2022.
Outlook, risks and unusual items
- vTv planned two pivotal, placebo-controlled TTP399 trials involving approximately 1,000 patients in total, with at least one study lasting one year. The agreed primary endpoint is the difference in hypoglycemia events between treatment and placebo groups. Site start-up and enrollment were expected to begin in the second half of 2023; the filing does not establish that this later occurred.
- TTP399 has FDA Breakthrough Therapy designation. Prior Phase 2 results showed statistically significant HbA1c improvement and a reported 40% reduction in severe and symptomatic hypoglycemia versus placebo. A mechanistic study reported no increased ketone levels during acute insulin withdrawal. These are clinical findings, not evidence of FDA approval or commercial efficacy.
- vTv is actively seeking financing, partners, and licensees for TTP399 and other programs. ATM availability was $37.3 million at the filing date; Lincoln Park capacity is subject to agreement limits and market conditions. Equity financing could materially dilute stockholders.
- Key risks include clinical-trial failure or delay, regulatory uncertainty, inadequate funding, reliance on third-party manufacturers and suppliers, dependence on collaborators, and lack of commercial revenue. The company has no multiple sources of supply for drug-candidate components.
- Nasdaq had notified vTv that its Class A share price had remained below the $1.00 minimum bid requirement for 30 consecutive business days; failure to regain compliance could result in delisting and impair access to capital.
- G42’s agreement includes a potential $30.0 million payment or share issuance, at G42’s option, if TTP399 receives U.S. FDA approval, and single-digit royalties on specified territory sales after commercialization. The milestone is contingent, not assured, and the transaction created substantial deferred contract liabilities in 2022.
- The filing reports effective disclosure controls and internal control over financial reporting; the independent auditor issued an unqualified financial-statement opinion while highlighting substantial doubt about going concern. No material legal proceedings were reported.
Investor facts to verify
- Whether vTv secured sufficient capital or strategic partners to fund operations and the planned TTP399 trials, and the actual cash runway after the February 2023 G42 note payment.
- Whether the pivotal trials began as planned, their final protocols and enrollment, and any subsequent efficacy or safety results.
- The latest Nasdaq bid-price compliance status and the potential dilution from ATM or Lincoln Park sales, warrants, and equity awards.
- Progress and economics of G42’s regional collaboration, including the contingent $30.0 million approval milestone and the conditions for commercial royalties.
- Updates to collaboration revenue concentration, the Reneo investment’s fair value, and the company’s going-concern assessment.