vTv Therapeutics Inc. — Q2 2021 Form 10-Q
Business context and period. This clinical-stage pharmaceutical company reported unaudited consolidated results for the quarter and six months ended June 30, 2021. Its lead internal programs are TTP399 for type 1 diabetes and HPP737 for psoriasis; it also advances partnered drug programs. It has not generated product-sales revenue.
Financial results and liquidity
| Metric | Q2 2021 | Six months 2021 |
|---|---|---|
| Revenue | $9,000 | $996,000 |
| Research and development expense | $2.437 million | $5.540 million |
| General and administrative expense | $2.242 million | $4.406 million |
| Operating loss | $4.670 million | $8.950 million |
| Net loss attributable to vTv Therapeutics Inc. | $608,000 | $4.849 million |
| Net loss per Class A share | $0.01 | $0.08 |
| Net cash used in operating activities | Not provided for quarter | $9.297 million |
At June 30, cash and cash equivalents were $10.835 million, long-term investments were $9.622 million, total assets were $21.660 million, and current liabilities were $5.059 million. The company had no notes payable outstanding; its former loan was repaid in December 2020. Operating lease liabilities totaled $756,000. Stockholders’ deficit was $47.823 million, and redeemable noncontrolling interest was $60.190 million.
Changes versus prior comparable periods
- Q2 revenue was minimal; six-month revenue rose to $996,000 from $8,000, primarily from a cumulative revenue adjustment following a January 2021 amendment to the Huadong license agreement.
- Six-month operating expenses fell $912,000 year over year, as lower azeliragon trial costs more than offset increased spending on HPP737 and other programs. R&D expense declined 17.5% to $5.540 million.
- Six-month net loss attributable to the company narrowed to $4.849 million from $8.092 million. The improvement included noncash investment and warrant fair-value effects; Q2 other income included a $2.9 million unrealized gain on Reneo shares. The improvement therefore does not reflect operating profitability.
- Operating cash use decreased to $9.297 million from $10.354 million for the first half. Financing provided $14.385 million, mainly from equity sales; cash increased $5.088 million.
Outlook, risks and notable items
- Management expected available resources to fund operations into the third quarter of 2022, based on its operating plan and planned use of cash plus equity-sale facilities. The filing states that these conditions raise substantial doubt about the company’s ability to continue as a going concern.
- Funding depends on market price and trading volume. The company reported $50.0 million remaining under its ATM offering and the ability to sell approximately 9.4 million additional shares under the Lincoln Park agreement. Further equity financing could substantially dilute shareholders; additional funding was not assured.
- In April 2021, FDA granted TTP399 Breakthrough Therapy designation. Following a July FDA meeting, the company was developing designs for two pivotal studies, which it expected to initiate in the first half of 2022. Top-line results from a TTP399 mechanistic study were expected in late Q3 or early Q4 2021.
- The company had completed dosing in the HPP737 Phase 1 multiple-ascending-dose study and expected top-line results in Q3 2021; it planned to discuss a Phase 2 psoriasis study with FDA in Q3 and potentially start it in late 2021 or early 2022.
- The January Huadong amendment removed the company’s obligation to sponsor and contribute up to $3.0 million to a Phase 2 multi-region trial, while reducing potential development and regulatory milestones by $3.0 million.
- JDRF amended its research agreement in June 2021 to provide up to $3.4 million for TTP399 research milestones. Future spending, trial results, enrollment, regulatory requirements, and access to capital remain uncertain. No material legal proceedings or material changes to previously disclosed risk factors were reported.
Key facts for investors to verify
- Whether ATM and Lincoln Park share sales can provide adequate funding on acceptable terms, and the resulting dilution.
- Progress, timing, financing, and regulatory requirements for the planned TTP399 pivotal studies and HPP737 Phase 2 trial.
- Whether future operating cash burn and available liquidity remain consistent with management’s stated runway into Q3 2022.
- The extent to which reported earnings depend on noncash investment and warrant fair-value changes rather than recurring revenue or operations.
- Potential future collaboration milestones, royalties, and other contingent obligations; milestone receipts and commercialization are not assured.