DBV Technologies S.A. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023. Financial statements are unaudited, prepared under U.S. GAAP, and reported in U.S. dollars. DBV is a clinical-stage biotechnology company developing Viaskin epicutaneous immunotherapy; it reported no product sales.
Financial performance and position
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Operating income, principally research tax credits and collaboration income | $2.3 million | $1.5 million | $4.5 million | $4.1 million |
| Operating expenses | $27.4 million | $25.4 million | $50.7 million | $44.7 million |
| Net loss | $24.2 million | $23.0 million | $44.8 million | $39.7 million |
| Net loss per share | $0.26 | $0.35 | $0.48 | $0.66 |
| Net cash used in operating activities | Not provided for the quarter | $46.4 million | $11.7 million |
- Research and development spending was $33.7 million for the first half, up 9%, driven mainly by clinical-trial costs and employee costs. General and administrative expense increased 31% to $16.1 million, including one-time financing, organizational-planning and market-research costs.
- Cash and cash equivalents were $174.0 million at June 30, versus $209.2 million at December 31, 2022. Total current assets were $195.5 million and current liabilities $33.4 million. Total liabilities were $53.3 million; the company reported no bank debt.
- First-half investing cash outflow was $0.3 million and financing cash inflow was $7.8 million. Cash decreased by $35.2 million, including a favorable $3.7 million exchange-rate effect.
- Operating income is not product revenue: it consisted mainly of French research tax credits ($3.7 million for the first half) and collaboration-related income. No sales were reported.
Material changes and unusual items
- First-half operating cash use rose substantially from 2022. Management attributed much of the comparison to receipt in 2022 of a €24.8 million research tax credit refund for fiscal years 2019–2021; trade-payable movements also affected the comparison.
- Operating expenses increased 14% in the first half, while net loss increased 13%. Lower sales and marketing costs and a $1.1 million reversal of a collaboration-related loss-at-completion provision partly offset higher R&D and G&A costs.
- In June, DBV raised $7.8 million gross through its at-the-market program, issuing 2,052,450 ordinary shares in ADS form. The program had a stated maximum of $100 million and was intended to remain available through July 16, 2024, subject to its terms.
- Total contingencies were $20.8 million at June 30, including $19.1 million related to the Nestlé Health Science collaboration loss-at-completion estimate. The company also recorded a $0.7 million estimated office-refurbishment provision related to possible non-renewal of its Montrouge lease.
Outlook, management commentary and risks
- Management stated that, based on current operations, plans and assumptions, cash at June 30 was expected to fund operations for at least the next 12 months. The company has incurred recurring operating losses and negative operating cash flows and expects to seek additional capital; it cautioned that financing may not be available on acceptable terms, or at all.
- For Viaskin Peanut in children ages 4–7, the Phase 3 VITESSE trial had begun screening patients. Last-patient screening was anticipated in the first half of 2024 and topline results in the first half of 2025.
- For children ages 1–3, the FDA confirmed that the Phase 3 EPITOPE study met its prespecified primary-endpoint success criteria and did not request another efficacy study. It did require additional safety data for a potential BLA; DBV planned a new safety study that would also collect patch-adhesion data and use updated instructions.
- The European marketing application for Viaskin Peanut in ages 4–11 had been withdrawn in 2021 after the EMA raised concerns about the evidence from a single pivotal trial. DBV said it intended to resubmit when a second pivotal-trial data set was available.
- Key risks include clinical and regulatory uncertainty, trial timing and outcomes, manufacturing and financing needs, and the possibility of needing to reduce or delay development if additional funding is unavailable. The filing reported no material changes to previously disclosed risk factors and no material legal proceedings.
Most important facts for investors to verify
- Whether the company’s stated minimum 12-month cash runway remains adequate as clinical spending and operating cash use continue.
- VITESSE enrollment progress, anticipated 2025 topline timing, and whether the additional toddler safety study meets FDA requirements for a BLA.
- Remaining ATM capacity, any further share issuance and resulting dilution; the reported $7.8 million is gross proceeds.
- The assumptions and timing behind the $20.8 million contingency balance, including the collaboration estimate and office-refurbishment provision.
- That reported operating income is primarily tax-credit and collaboration-related, not commercial product sales.