Nanobiotix S.A. — Form 6-K Summary
Reporting period: Six months ended June 30, 2023. The report was filed September 26, 2023 and includes unaudited interim condensed consolidated financial statements prepared under IFRS. Nanobiotix is a late-stage biotechnology company focused primarily on developing NBTXR3, a radioenhancer for cancer treatment.
Financial performance and position
| Metric | Six months ended June 30, 2023 | Comparable period / date |
|---|---|---|
| Total revenue and other income | €3.3 million | €1.3 million in H1 2022 |
| Research and development expense | €17.8 million | €16.6 million in H1 2022 |
| Selling, general and administrative expense | €10.9 million | €9.6 million in H1 2022 |
| Total operating expenses | €28.7 million | €27.2 million in H1 2022 |
| Operating loss | €25.4 million | €25.9 million in H1 2022 |
| Net loss | €28.1 million | €26.4 million in H1 2022 |
| Basic and diluted loss per share | €0.80 loss | €0.76 loss in H1 2022 |
| Cash flow from operating activities | €17.3 million outflow | €17.5 million outflow in H1 2022 |
| Net decrease in cash and cash equivalents | €19.8 million | €20.9 million decrease in H1 2022 |
| Cash and cash equivalents | €21.6 million at June 30, 2023 | €41.4 million at December 31, 2022 |
| Total financial liabilities | €54.0 million | €53.2 million at December 31, 2022 |
| Shareholders’ equity | Negative €53.8 million | Negative €27.0 million at December 31, 2022 |
There was no product or service revenue; the €3.3 million of income consisted primarily of a €1.6 million French research tax credit, €0.2 million of subsidies and €1.5 million of other income, including €1.3 million of reimbursed development costs and €0.2 million of clinical supply income from LianBio. Based on reported figures, the implied operating and net margins were substantially negative; the filing does not present these margins as formal metrics.
Material changes versus the prior comparable period
- Total revenue and other income increased by €2.0 million, primarily from higher research tax credits and LianBio-related cost recharges.
- R&D expense increased €1.2 million as the company advanced NANORAY-312 and other clinical programs.
- SG&A expense increased €1.2 million, including approximately €1.4 million of financial-adviser fees under an agreement subsequently terminated.
- Operating loss improved slightly, but net loss increased by €1.7 million because the net financial loss widened to €2.7 million from €0.5 million. The change included higher EIB-related interest expense and lower foreign-exchange gains than in H1 2022.
- Cash declined by €19.8 million during the first half, while trade and other payables increased to €16.7 million from €9.6 million, partly reflecting deferred vendor payments and clinical-trial accruals.
- Shareholders’ equity became more negative, primarily due to the period loss and accumulated deficit of approximately €283.0 million.
Business development, outlook and unusual items
- NANORAY-312, the pivotal Phase 3 study of NBTXR3 in frail, elderly patients with locally advanced head and neck cancer, was ongoing in Europe, Asia and the United States. A futility analysis was planned for the first half of 2024 and an interim efficacy analysis for the second half of 2024.
- Study 102 recruitment was complete, with additional follow-up data expected later in 2023. Study 1100 and clinical collaborations with MD Anderson continued across head and neck, pancreatic, lung, esophageal and other solid-tumor indications.
- In July 2023, after the reporting date, Nanobiotix entered into a worldwide licensing, co-development and commercialization agreement with Janssen for NBTXR3, excluding territories previously licensed to LianBio. Nanobiotix retained operational control of NANORAY-312 and other ongoing studies, while Janssen assumed responsibility for an initial Phase 2 lung-cancer study and may assume control of other studies.
- Janssen paid a $30 million upfront fee in August 2023 following antitrust clearance. The agreement provides for potential development, regulatory and sales milestone payments of up to $1.8 billion, additional potential payments for specified indications, and tiered double-digit royalties on net sales. These potential payments are contingent and are not guaranteed.
- Johnson & Johnson Innovation invested an initial $5 million in September 2023. A further $25 million may be available subject to specified conditions, including a future qualified equity financing.
- The EIB loan had €38.3 million of carrying value at June 30, 2023 and an outstanding principal balance of approximately €25.3 million. A temporary waiver reduced the EIB minimum-cash covenant to €10.3 million through January 31, 2024, subject to the stated conditions. A permanent covenant amendment had not been executed as of the report date.
- Management stated that cash at June 30, together with the Janssen upfront payment, the JJDC investment and LianBio collaboration arrangements, was expected to fund operating expenses into the first quarter of 2024. The filing nevertheless states that substantial doubt exists about the company’s ability to continue as a going concern.
- Nanobiotix remained dependent on additional financing, partnerships, grants, tax credits and potential milestone payments. Failure to obtain sufficient funding could require delaying, reducing or discontinuing development programs.
Key risks and contingencies
- Clinical, regulatory and commercialization risk for NBTXR3, including the possibility that trials fail, enrollment is delayed, approvals are not obtained or market acceptance is limited.
- Dependence on Janssen for co-development and commercialization activities, including Janssen’s discretion over resources and its potential termination rights.
- Liquidity and covenant risk, including substantial recurring operating losses, negative working capital, EIB minimum-cash requirements and significant debt obligations.
- Financing and dilution risk from potential equity offerings, the Kepler Cheuvreux equity line and the possible second JJDC investment.
- Manufacturing, supply-chain, intellectual-property, foreign-exchange and collaboration-partner risks.
- Potential future obligations include a $5 million PharmaEngine payment upon a second regulatory approval, low single-digit Asia-Pacific royalties, EIB milestone and royalty payments, and additional payments to the terminated financial adviser tied to future financing or Janssen milestones.
Investor verification checklist
- Verify the definitive Janssen agreement, payment conditions, milestone structure, royalty rates, control rights and termination provisions.
- Track NANORAY-312 enrollment, the planned 2024 futility and interim efficacy analyses, and any resulting regulatory actions.
- Confirm receipt and use of the $30 million Janssen upfront payment and $5 million JJDC investment, as well as conditions for the potential $25 million JJDC tranche.
- Monitor execution of the proposed EIB covenant amendments, the €5.4 million PIK repayment and other EIB prepayment obligations.
- Assess cash burn, vendor-payment deferrals, clinical-trial accruals and funding needs beyond the stated first-quarter 2024 runway.
- Reconcile potential dilution from approximately 9.2 million anti-dilutive equity instruments, including the 5.2 million-share Kepler Cheuvreux equity-line warrants.