Business context and reporting period
Invivyd, Inc. (formerly Adagio Therapeutics, Inc.) filed this unaudited Form 10-Q for the quarter and nine months ended September 30, 2022. The clinical-stage biopharmaceutical company develops antibody therapies, initially targeting COVID-19. It has not generated revenue from product sales or other sources.
Its lead programs include adintrevimab and NVD200, a two-antibody combination. The company reported NVD200 had potent in-vitro neutralizing activity against tested variants and SARS-CoV-1; clinical trials were planned to begin in the first quarter of 2023.
Financial results and liquidity
Amounts below are in millions of dollars except per-share data. Operating expenses were research and development (R&D), acquired in-process R&D (IPR&D), and selling, general and administrative (SG&A); the filing reports no revenue, so revenue margins are not meaningful.
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| R&D expense | $30.1 | $45.4 | $159.3 | $114.5 |
| Acquired IPR&D expense | $4.0 | $4.0 | $4.0 | $7.5 |
| SG&A expense | $13.2 | $11.1 | $36.5 | $21.9 |
| Net loss | $45.1 | $60.4 | $196.7 | $143.7 |
| Basic and diluted net loss per share | $(0.42) | $(0.98) | $(1.82) | $(7.06) |
| Net cash used in operating activities | Not provided for quarter | Not provided for quarter | $172.6 | $111.5 |
At September 30, 2022, cash and cash equivalents were $278.2 million and marketable securities were $140.5 million, totaling $418.7 million in available cash resources. Current assets were $421.6 million; current liabilities were $46.1 million. Total liabilities were $47.3 million, including $1.5 million of operating lease liabilities. No borrowing debt was reported. Accumulated deficit was $488.9 million.
Material changes versus comparable periods
- Q3 net loss narrowed by $15.3 million year over year, mainly as R&D fell $15.2 million. Lower adintrevimab manufacturing and clinical-trial costs, including a WuXi credit, were partly offset by $11.8 million of NVD200 direct costs and higher personnel costs.
- For the first nine months, net loss increased by $53.0 million. R&D rose $44.8 million, reflecting adintrevimab manufacturing and trial-monitoring costs, NVD200 development, and added personnel. SG&A rose $14.7 million, principally from public-company, governance, audit and insurance costs.
- Cash and cash equivalents declined $264.1 million from year-end 2021. Operating activities used $172.6 million; investing activities used $91.9 million, primarily reflecting purchases of marketable securities net of maturities.
- Cash and marketable securities were $418.7 million versus $591.4 million at December 31, 2021. The filing attributes part of the change in cash-flow working capital to timing of vendor payments and use of manufacturing deposits.
Outlook, risks and unusual items
- Management estimated existing cash, cash equivalents and marketable securities would fund operating expenses and capital requirements into the second quarter of 2024, based on assumptions that may prove incorrect. The company expects continued losses and may need additional financing.
- Adintrevimab trial enrollment was paused in January 2022 after Omicron emerged; the company was closing the EVADE and STAMP trials. It paused an EUA submission after FDA feedback concerning lack of neutralizing activity against BA.2 and reported markedly reduced in-vitro activity against circulating Omicron sublineages. Future variant susceptibility and authorization are uncertain.
- More than 700,000 doses of adintrevimab had been manufactured and were available for potential future use if a susceptible variant arises. This does not establish regulatory authorization or commercial demand.
- R&D and clinical supply depend substantially on third parties, including WuXi as the sole-source manufacturer described in the filing. In April, minimum manufacturing commitments were reduced from $159.4 million to $51.6 million; in July, the company canceled contracted drug-product batches. Remaining contractually binding drug-substance costs were $18.1 million at September 30. WuXi also provided a low-eight-figure credit, partly applied during Q3.
- Q3 2022 IPR&D expense of $4.0 million comprised a $1.0 million Adimab option exercise and $3.0 million upfront payment under a platform-transfer agreement. The comparable Q3 2021 charge was a $4.0 million Adimab milestone.
- The company entered a new two-year Newton laboratory and office lease, with annual base rent of $1.3 million; occupancy was expected in Q4 2022. It also adopted lease-accounting requirements in 2022.
- A $400 million shelf registration statement was declared effective October 5, 2022, enabling potential securities offerings; actual issuance, timing and dilution were not specified. Management also disclosed Adimab’s significant ownership and related-party arrangements.
- Management stated disclosure controls were effective as of September 30, 2022. A previously identified material weakness in internal control was reported as remediated, though future weaknesses remain a risk. The filing reported no material legal proceedings.
Important facts for investors to verify
- Whether NVD200 enters clinical testing on the planned schedule and whether clinical evidence supports the reported in-vitro breadth.
- Current variant susceptibility, regulatory discussions and any decision to pursue an EUA or traditional approval for adintrevimab.
- Actual cash consumption versus the stated runway into Q2 2024, and the assumptions behind management’s estimate.
- Remaining WuXi obligations, use of the manufacturing credit, supply availability and dependence on a sole-source manufacturer.
- Potential capital raises under the effective shelf registration and their effect on existing shareholders.