Nanobiotix S.A. — 2023 Annual Report (Form 20-F)
Reporting period: Fiscal year ended December 31, 2023. This is an annual filing, not a standalone 2023 fourth-quarter report. Financial statements are prepared under IFRS and reported in euros.
Business context
Nanobiotix is a clinical-stage biotechnology company developing nanoparticle-based therapies. Its lead candidate, NBTXR3, is designed to enhance radiation therapy in solid tumors. NBTXR3 has a CE mark for soft tissue sarcoma in the EU but has not been commercialized. The company reported no significant product-sales or royalty revenue. Its other platforms, Curadigm and Oocuity, remain at preclinical and discovery stages, respectively.
Key financial metrics
| Metric (€ millions, unless stated) | 2023 | 2022 | Change / context |
|---|---|---|---|
| Revenue | 30.1 | 0.0 | Primarily license and R&D-service revenue under the Janssen agreement |
| Other income | 6.2 | 4.8 | Includes research tax credits, subsidies, and collaboration/service recharges |
| Total revenue and other income | 36.2 | 4.8 | Increase driven mainly by Janssen agreement accounting |
| Research and development expense | 38.4 | 32.6 | Higher clinical-trial spending |
| SG&A expense | 22.0 | 17.9 | Higher personnel, advisory, legal, and transaction-related costs |
| Operating loss | (26.8) | (46.7) | Improved principally because of Janssen-related revenue |
| Net loss | (39.7) | (57.0) | Includes a €12.8 million net financial loss |
| Operating cash flow | (12.5) | (37.1) | Lower cash use, supported by Janssen and LianBio receipts |
| Cash and cash equivalents at year-end | 75.3 | 41.4 | Up €33.9 million |
| Total assets | 93.9 | 59.8 | |
| Total shareholders’ equity | (1.8) | (27.0) | Negative at both year-ends |
| Financial liabilities | 50.6 | 53.2 | Includes EIB, state-guaranteed and other borrowings, and lease liabilities |
Operating and net margins are not useful indicators of underlying commercial performance because revenue primarily reflects licensing and collaboration accounting, not recurring product sales. The company has incurred losses since inception. Total liabilities were €95.7 million at year-end 2023, exceeding total assets.
Material changes and notable developments
- Nanobiotix signed an exclusive global NBTXR3 licensing, co-development, and commercialization agreement with Janssen in July 2023. Janssen paid a $30 million upfront fee; the company recognized €29.6 million of Janssen-related license and R&D-service revenue in 2023.
- The company reported achievement of the initial NANORAY-312 operational milestone by year-end and recognized the related $20 million milestone in its IFRS 15 transaction price. It invoiced the milestone in January 2024 and expected cash receipt in May 2024; it was not a 2023 cash receipt.
- Janssen became the NBTXR3 development and commercialization partner for the Asia territory following LianBio’s assignment of the relevant rights in December 2023. The filing records a €1.6 million contract loss related to the novation and fair-value accounting.
- Equity financing generated €57.4 million of net proceeds in 2023, including JJDC investments and a global follow-on offering. Ordinary shares outstanding rose from 34.9 million at year-end 2022 to 47.1 million at year-end 2023.
- The EIB removed its minimum-cash covenant in October 2023 after Nanobiotix paid €5.4 million of accrued PIK interest. The financing terms also require prepayments against the EIB’s €20 million milestone obligation following certain financing transactions; €0.8 million was prepaid in 2023.
Outlook, management commentary, risks, and unusual items
- Outlook: Management expected cash operating expenses to be slightly higher in 2024 as clinical trials continue. It stated that year-end cash, together with expected funding, supported an operating runway into the third quarter of 2025. The company said it may need additional funding for development and regulatory activities and cannot assure future profitability or positive operating cash flow.
- Clinical priorities: NANORAY-312 is a global Phase 3 trial of NBTXR3 in elderly patients with locally advanced head and neck cancer who are ineligible for platinum-based chemotherapy. Interim and final analyses are event-driven and depend on progression-free-survival events and enrollment. Janssen is responsible for an initial Phase 2 study in stage III non-small cell lung cancer. Early results elsewhere in the filing are preliminary and are not confirmatory evidence of efficacy.
- Janssen dependence: Janssen holds broad NBTXR3 development and commercialization rights, controls key development and regulatory matters, and may terminate the agreement without cause on prior notice. Future milestone and royalty income depends on Janssen’s execution, regulatory outcomes, and eventual commercialization.
- Funding and debt risks: The company remains loss-making and may require additional equity, debt, grants, or partnerships. Equity issuance may dilute shareholders; debt carries repayment and covenant risks. The EIB loan’s carrying value was €36.4 million, while its contractual cash obligations include estimated future royalties and milestone payments; the filing’s maturity schedule reports a larger aggregate EIB obligation including these amounts.
- Accounting and controls: Management concluded disclosure controls and internal control over financial reporting were ineffective at December 31, 2023 because a material weakness remained. It relates to technical accounting expertise, supervision, procedures, and oversight of advisers, particularly for complex licensing, securities-purchase, and novation accounting. Management nevertheless stated that the IFRS statements fairly present the company’s financial position and results in all material respects.
- Unusual financial items: Net financial expense included €4.2 million of fair-value losses on a JJDC-related derivative and €2.9 million of foreign-exchange losses. The EIB loan’s sales-linked interest and estimated royalties involve significant assumptions; 2023 included a €0.3 million favorable catch-up adjustment.
- Other material risks: Clinical-trial delays or unfavorable results, patient enrollment, manufacturing scale-up and supply, regulatory classification and approval, reimbursement and pricing, intellectual-property protection, currency volatility, and cybersecurity or data-privacy events could adversely affect results. The company does not hedge foreign-exchange exposure.
Most important facts for investors to verify
- Whether the $20 million NANORAY-312 milestone was received in 2024 as expected, and how future milestone cash receipts compare with revenue recognized under IFRS.
- NANORAY-312 enrollment, interim-analysis timing, event accrual, and eventual results; confirmatory Phase 3 evidence remains outstanding.
- Janssen’s continued commitment, trial execution, manufacturing responsibilities, and any changes to the license or Asia arrangements.
- Cash burn, 2024 spending, and the assumptions supporting management’s runway estimate into Q3 2025, including future EIB prepayments.
- Remediation of the material weakness in internal control and the company’s accounting for complex licensing, financing, and novation transactions.
- Potential dilution from outstanding equity awards and the Kepler Cheuvreux equity line, which could issue up to 5.2 million shares and was extended to September 2024.