AC Immune SA — FY2022 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2022; this is an annual report, not a standalone fourth-quarter filing. Financial statements are prepared under IFRS as issued by the IASB and presented in Swiss francs (CHF).
Business context
AC Immune is a clinical-stage biopharmaceutical company developing therapeutics and diagnostics for neurodegenerative diseases, including Alzheimer’s and Parkinson’s disease. It reported 16 therapeutic and diagnostic programs, seven in clinical trials, and no products approved for sale. Its five principal partners include Genentech, Janssen, Lilly and Life Molecular Imaging (LMI).
Financial performance and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Contract revenue | CHF 3.9 million | Nil |
| Research and development expense | CHF 60.3 million | CHF 62.3 million |
| General and administrative expense | CHF 15.8 million | CHF 17.9 million |
| Operating loss | CHF 70.8 million | CHF 79.0 million |
| Net loss | CHF 70.8 million | CHF 73.0 million |
| Basic and diluted loss per share | CHF 0.85 | CHF 0.97 |
| Net cash used in operating activities | CHF 73.6 million | CHF 65.7 million |
FY2022 revenue was entirely the CHF 3.9 million LMI milestone tied to PI-2620’s advancement into late-stage Alzheimer’s development. The company has never generated product-sales revenue. The 2021 net finance gain included a CHF 6.5 million fair-value gain on Affiris-related convertible-note derivatives that did not recur; net finance result was a CHF 0.1 million gain in 2022 versus CHF 6.0 million in 2021.
At year-end, cash and cash equivalents were CHF 31.6 million and short-term financial assets were CHF 91.0 million, for total liquidity of CHF 122.6 million, down from CHF 198.2 million a year earlier. Management estimated existing resources would fund planned operations into Q3 2024, excluding potential milestone payments. Operating cash outflow increased year over year despite a lower net loss, partly reflecting working-capital movements, including reduced accrued expenses.
Total assets were CHF 185.9 million and shareholders’ equity CHF 169.0 million. Total liabilities were CHF 16.9 million, including CHF 2.8 million in lease liabilities; the balance sheet reports no borrowings at year-end. Contractual commitments were CHF 52.5 million, predominantly research and development commitments. No operating margin is meaningful given the company’s pre-commercial stage and minimal revenue.
Material changes and business developments
- R&D expense declined CHF 1.9 million, mainly from lower discovery/preclinical and clinical spending, partly offset by increased spending on ACI-7104.056 and the ACI-24.060 ABATE study. G&A expense fell CHF 2.1 million, including because prior-year Affiris transaction costs did not recur.
- ACI-35.030 was selected over the alternative JACI-35.054 vaccine for further development after interim Phase 1b/2a data. The company reported strong, durable antibody responses and a favorable safety/tolerability profile; two serious adverse events were considered possibly or probably related.
- ACI-24.060 entered the ABATE Phase 1b/2 study, with the first patient dosed in Q2 2022. The company planned a U.S. IND filing in H1 2023.
- ACI-7104.056 was planned to advance into a Phase 2 study in Parkinson’s disease in H1 2023.
- ACI-12589 completed first-in-human and investigator-initiated studies in 2022. Early imaging results distinguished multiple system atrophy patients from controls and other groups; further validation is required.
- PI-2620 advanced into late-stage Alzheimer’s development with LMI. A pivotal Phase 3 histopathology study began in December 2022, and the first patient was imaged in January 2023.
- Semorinemab produced mixed results: the Lauriet Phase 2 study met one co-primary cognitive endpoint (ADAS-Cog11), but not the functional co-primary endpoint or other reported functional measures. A separate early-AD Phase 2 trial had not met its primary efficacy endpoint.
- Crenezumab did not statistically significantly slow or prevent decline in the Alzheimer’s Prevention Initiative study; numerical differences favored treatment across reported endpoints. Earlier Phase 3 CREAD/CREAD 2 studies in sporadic AD had been discontinued after an interim analysis indicated the primary endpoint was unlikely to be met.
Outlook, risks and unusual items
Management expects losses to continue and R&D spending to rise as it advances proprietary programs. Additional funding may be needed before or after the stated runway; the company has no material committed external funding source. Financing could involve dilution, debt restrictions, or granting rights to intellectual property or future revenues. The company maintains an ATM and an effective shelf registration, but future proceeds are not assured.
- Clinical and regulatory risk: Programs remain investigational; early or mixed trial results may not predict later-stage success. Patient enrollment, safety, manufacturing, regulatory review and partner decisions can delay or halt development.
- Partner reliance: Partners control development or commercialization for several programs and may terminate agreements or deprioritize assets. Milestones and royalties are contingent and timing is uncertain.
- Asset valuation: The CHF 50.4 million acquired in-process R&D asset for ACI-7104.056 was not impaired at year-end. Its valuation depends on uncertain clinical, regulatory, market, pricing and discount-rate assumptions. PwC identified this valuation as a critical audit matter.
- Currency and funding exposure: The company does not hedge its foreign currency exposure; it estimates that a hypothetical 10% CHF move against the EUR and USD could materially affect results. Inflation, capital-market conditions and development costs may increase funding needs.
- Other risks: Intellectual-property protection and disputes, competition, reimbursement and drug-pricing changes, third-party manufacturing and CRO performance, data-security incidents, and the possibility of PFIC status for U.S. investors.
There were no material litigation proceedings reported, no dividends have been paid, and management and the auditor reported effective internal control over financial reporting as of December 31, 2022. The company reported no material ongoing COVID-19 disruption to key trials at the time of filing.
Important facts for investors to verify
- Reconcile the CHF 122.6 million liquidity position, cash-burn assumptions and Q3 2024 runway against current spending, upcoming trial costs and financing activity.
- Track the clinical endpoints, safety findings and timelines for ACI-35.030, ACI-24.060, ACI-7104.056, PI-2620 and ACI-12589; distinguish partner-reported or interim results from completed, statistically conclusive evidence.
- Confirm partner responsibilities, cost-sharing caps, termination rights and the conditions and timing for potential milestone or royalty payments.
- Review the assumptions supporting the CHF 50.4 million ACI-7104.056 IPR&D carrying value and the sensitivity of the asset to trial, approval and commercial outcomes.
- Assess future dilution risk under the ATM, shelf registration and equity incentive plans, and verify the latest share count and treasury-share figures.
- For U.S. holders, confirm the company’s PFIC status for the relevant tax year and consult a tax adviser regarding reporting and potential tax consequences.