Savara Inc. — 2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020. This is an annual report, not a standalone fourth-quarter filing; the supplied filing text does not provide clear Q4-only financial results. Savara is a clinical-stage orphan lung disease company with no product sales.
Business context and key financial metrics
Savara’s main program is inhaled molgramostim for autoimmune pulmonary alveolar proteinosis (aPAP). Following setbacks across other programs, the company prioritized molgramostim and its planned Phase 3 IMPALA 2 trial.
| Metric | 2020 | 2019 |
|---|---|---|
| Revenue | $0.257 million milestone revenue; no product revenue | No milestone or product revenue |
| Research and development expense | $35.0 million | $38.8 million |
| General and administrative expense | $14.3 million | $13.1 million |
| Net loss | $49.6 million | $78.2 million |
| Net loss per share | $0.84 | $1.95 |
| Cash used in operating activities | $39.8 million | $45.1 million |
| Cash, cash equivalents and short-term investments at year-end | $82.2 million | $121.8 million |
| Working capital at year-end | $76.9 million | Not stated here |
| Debt | $25.0 million gross principal; $25.1 million carrying value | $25.1 million carrying value, including $2.0 million current portion |
Operating margins are not meaningful given the absence of product sales and the company’s development-stage losses. Savara reported an accumulated deficit of $257.5 million at year-end 2020. Management stated that cash and short-term investments were sufficient to fund operations for the 12 months following issuance of the financial statements, while also stating that substantial additional capital will be required.
Material changes versus the prior comparable period
- Net loss narrowed by $28.6 million, mainly because 2019 included a $26.9 million goodwill impairment charge after the earlier molgramostim trial results. There was no goodwill impairment in 2020.
- R&D expense fell $3.7 million as non-aPAP trial activity wound down, partly offset by costs related to Apulmiq. G&A expense rose $1.2 million, including higher stock-based compensation, insurance and costs related to executive departures.
- Cash and short-term investments declined by approximately $39.6 million year over year. Operating cash use remained substantial, and 2020 financing cash inflows were limited compared with 2019.
- In 2020, Savara stopped development of vancomycin after its Phase 3 AVAIL trial missed the primary endpoint, discontinued Apulmiq as part of pipeline prioritization, and decided not to pursue further molgramostim development for NTM.
Outlook, management commentary, risks and unusual items
- Molgramostim / aPAP: The earlier Phase 3 IMPALA trial missed its primary endpoint, and the FDA had stated that the submitted data did not provide sufficient evidence of efficacy and safety. Savara cited positive secondary and exploratory findings but will need further clinical evidence. IMPALA 2 is planned as a 160-patient, 48-week placebo-controlled Phase 3 trial; the company anticipated initiation by the end of Q2 2021 and top-line data in Q2 2024. COVID-19 could affect enrollment and timing.
- Trial costs and reliance on vendors: A March 2021 Parexel work order estimated approximately $31 million in services and pass-through expenses over IMPALA 2. Savara outsources clinical operations and manufacturing and had not engaged a second-source molgramostim manufacturer as of the report.
- Debt covenants and financing: The $25 million SVB facility carries interest at the greater of prime plus 3% or 7.75%, and includes restrictive covenants. SVB extended the first-patient-dosed Phase 3 milestone deadline to June 30, 2021. The agreement also requires evidence by June 30, 2021 of at least $25 million in gross proceeds from warrant exercises or other equity issuance. Failure to meet applicable requirements could accelerate repayment or trigger principal amortization. The filing also describes substantial potential dilution from equity and warrants.
- Other pipeline outcomes: AVAIL showed no statistically significant improvement in its sequential primary FEV1 analysis; vancomycin development was discontinued. Apulmiq was discontinued after Savara had paid approximately $3.2 million cash and issued shares valued at approximately $2.1 million; the upfront investment was expensed. Preliminary ENCORE NTM results were not validated, and the trial was discontinued amid COVID-19 and changes in CF treatment.
- Commercial and regulatory risks: Molgramostim remains investigational. Approval, market acceptance, reimbursement, pricing, manufacturing validation and supply are uncertain. The company disclosed that it has no patent protection for molgramostim for aPAP and relies principally on potential orphan-drug exclusivity, device arrangements, its proprietary cell bank and know-how.
- Other items: Savara recorded $0.257 million of milestone revenue when its Japan license agreement terminated in August 2020 and the related performance obligations were considered met. The 2019 comparison includes a major noncash goodwill impairment. No material litigation was reported. Management assessed disclosure controls and internal control over financial reporting as effective; the external auditor did not audit internal-control effectiveness.
Most important facts for investors to verify
- Whether IMPALA 2 started on schedule, enrolled successfully, and can support regulatory approval given the prior Phase 3 primary-endpoint miss.
- Current cash runway, the pace of cash use, and the availability and dilution impact of additional financing.
- Compliance with SVB’s June 2021 clinical-trial and financing covenants, and the resulting repayment schedule and loan costs.
- Whether molgramostim manufacturing validation, commercial-scale supply and a second source are secured without delaying development.
- Whether updated clinical evidence, regulatory feedback, and the competitive and reimbursement environment support a viable commercial opportunity.