Savara Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; filed May 9, 2024. Savara is a clinical-stage biopharmaceutical company with no product revenue. Its sole program, inhaled molgramostim, is in Phase 3 development for autoimmune pulmonary alveolar proteinosis (aPAP).
Financial performance and position
| Metric | Q1 2024 | Q1 2023 / prior date |
|---|---|---|
| Revenue | No product revenue | No product revenue |
| Research and development expense | $16.8 million | $8.7 million |
| General and administrative expense | $5.6 million | $3.4 million |
| Total operating expenses | $22.5 million | $12.1 million |
| Net loss | $20.3 million | $10.6 million |
| Net loss per share | $0.11 | $0.07 |
| Operating cash use | $20.6 million | $12.0 million |
| Cash and cash equivalents | $16.8 million | $26.6 million at Dec. 31, 2023 |
| Short-term investments | $126.3 million | $135.7 million at Dec. 31, 2023 |
| Long-term debt | $26.4 million | $26.3 million at Dec. 31, 2023 |
Cash, cash equivalents and short-term investments totaled $143.0 million at quarter-end. Current assets were $146.2 million and current liabilities $9.8 million. Stockholders’ equity was $121.9 million; accumulated deficit was $413.7 million. Gross and operating margins are not meaningful because the company reported no revenue.
Other income, net was $2.1 million, including $1.4 million interest income and $0.8 million tax credit income. Investing activities provided $10.8 million, primarily from net maturities of short-term investments; financing activities provided $0.05 million.
Changes versus the prior-year quarter
- Net loss increased $9.8 million, while operating expenses rose $10.4 million. R&D expense increased 92%, mainly from manufacturing and chemistry, manufacturing and controls activities, the IMPALA-2 trial, regulatory and quality work, and personnel costs.
- G&A expense rose 67%, reflecting personnel costs, commercial activities and overhead, including patient advocacy.
- Higher interest income lifted other income by $0.6 million, partly offsetting the higher operating loss.
- Operating cash use increased $8.6 million year over year. Cash and investments together declined $19.3 million from year-end 2023.
Outlook, commitments and risks
- Management says available cash and investments are sufficient to fund operations for at least the next 12 months after issuance of the financial statements and support many planned activities. The company nevertheless expects significant ongoing development costs and may need additional capital; no specific financing or earnings guidance was provided.
- Management expects R&D spending to remain significant, including investment in regulatory support, clinical supplies and a second-source manufacturer. Timing and cost depend on clinical development and regulatory progress.
- A February 2024 manufacturing agreement entails estimated fees of $17.2 million; approximately $1.4 million had been paid or accrued by March 31. Cancellation fees range from 10% to 100%, depending on timing and activity status. The IMPALA-2 Parexel work order is estimated at $41.5 million over the trial.
- Additional unaccrued, contingent manufacturing and nebulizer milestones totaled $1.84 million at quarter-end. Potential future royalties include low-single-digit royalties to the API manufacturer and 3.5% to the nebulizer manufacturer on net sales, subject to the stated terms.
- SVB debt has a $26.5 million term-loan facility, floating interest rate reported as 8.0% at March 31, 2024, and interest-only payments through April 2026; principal is scheduled thereafter through April 2027. The agreement includes liquidity-related covenants and a lien on company assets.
- Key risks include trial results, regulatory approval, manufacturing execution, commercialization and access to future capital. The filing reports no material change in previously disclosed risk factors and no material pending litigation. Management reported effective disclosure controls and internal control over financial reporting.
Important facts for investors to verify
- Clinical milestones, timing and results for the Phase 3 IMPALA-2 trial, and the path to regulatory submission.
- Cash burn and runway against the company’s manufacturing, clinical-trial and commercialization-preparation commitments; assumptions behind the stated 12-month liquidity assessment.
- Manufacturing execution, remaining obligations and cancellation exposure under the $17.2 million second-source agreement, as well as the $41.5 million Parexel trial estimate.
- Debt covenant headroom, floating-rate exposure and repayment terms.
- Share-count and dilution reconciliation: 138.2 million common shares were issued and outstanding at quarter-end, while the EPS calculation reports 182.6 million weighted-average shares; the filing also lists 44.5 million outstanding warrants and 57.9 million shares reserved for issuance.