Vera Therapeutics, Inc. — FY2021 Form 10-K
Reporting period: Year ended December 31, 2021; filed March 25, 2022. This is an annual report, not a standalone fourth-quarter report. Vera is a clinical-stage biotechnology company with no approved products and no product-sales revenue.
Financial performance and position
| Metric | 2021 | 2020 |
|---|---|---|
| Product revenue | None | None |
| Research and development expense | $22.5 million | $45.2 million |
| General and administrative expense | $11.9 million | $4.0 million |
| Total operating expenses | $34.4 million | $52.2 million |
| Net loss | $32.6 million | $53.4 million |
| Net loss per share, basic and diluted | $2.43 | $166.93 |
| Net cash used in operating activities | $23.7 million | $34.8 million |
There is no meaningful revenue or gross-margin measure because the company has not commercialized a product. At December 31, 2021, cash and cash equivalents were $79.7 million, total assets $83.7 million, total liabilities $14.2 million, and accumulated deficit $124.1 million. Current assets were $82.5 million versus current liabilities of $7.7 million. Long-term debt had a net carrying value of $4.9 million; this reflects the initial $5.0 million draw under a facility of up to $50.0 million.
Cash and restricted cash increased $26.0 million during 2021. Investing activities used $4.2 million, primarily for the MAU868 acquisition, partly offset by asset-sale proceeds; financing activities provided $53.9 million, principally from the IPO and Oxford borrowing. The company reported no material product revenue, and operating margins are not informative at this development stage.
Changes versus 2020
- Net loss narrowed by $20.8 million, while operating expenses fell 34%. R&D expense declined 50%, largely because 2020 included $38.1 million of atacicept license and milestone obligations to Ares; 2021 included $7.0 million of MAU868 acquisition-related R&D expense.
- G&A increased 195% to $11.9 million, reflecting higher payroll and stock compensation, insurance, legal, audit and public-company costs.
- Other income included a $2.7 million gain on the sale of PNAi-related assets, partly offset by a $0.9 million unrealized loss on non-marketable equity securities.
- Vera completed its IPO in May 2021, raising $48.4 million net, and acquired worldwide MAU868 development and commercial rights in December 2021.
Outlook, commentary and key risks
- Management expected year-end cash, together with the February 2022 follow-on offering proceeds of approximately $80.2 million net, to fund operations and capital needs for at least 12 months from the financial-statement issuance date. The company also stated it expects ongoing losses and will need substantial additional capital for development and potential commercialization; its statements identify substantial doubt about long-term going-concern ability.
- Atacicept: the Phase 2b ORIGIN IgAN trial was expected to complete enrollment by mid-2022 and report topline results in Q4 2022. If positive, Vera planned a pivotal Phase 3 trial in 2023. A Phase 3 lupus nephritis trial was also planned, following FDA discussions. A prior atacicept lupus nephritis study was terminated after severe hypogammaglobulinemia and pneumonia in two subjects receiving induction therapy.
- MAU868: Vera expected to report fuller interim Phase 2 results in BK viremia in mid-2022 and planned a Phase 2b or Phase 3 trial in 2023. These timelines and outcomes were forward-looking expectations, not guarantees.
- Oxford’s facility provides up to $50.0 million, with $5.0 million drawn at year-end and the remaining $45.0 million available through 2022. It is secured by company assets (with intellectual property subject to a negative pledge), carries interest initially at 8.25% with a floating-rate formula, and has a 5% final payment fee (7% if maturity is extended). It includes restrictive covenants and default provisions, but no financial covenants.
- Principal risks include clinical-trial failure or delay, patient enrollment and COVID-19 disruption, safety and regulatory uncertainty, dependence on third-party manufacturers and CROs, competition, additional financing needs, license obligations, and patent protection. Atacicept has substantial potential milestone and royalty obligations to Ares; MAU868 has milestone and royalty obligations to Amplyx and Novartis.
- The company reported no material legal proceedings. Management stated that a material weakness in financial-reporting controls identified for 2019 and 2020 was remediated in 2021; management concluded disclosure controls were effective at year-end. The filing did not include management’s annual internal-control assessment report or auditor attestation, citing the transition rules for newly public companies.
Important facts for investors to verify
- Current cash runway and quarterly cash burn, including the impact of the February 2022 offering and any further Oxford facility draws.
- ORIGIN enrollment, topline timing and full efficacy and safety results; assess the small JANUS Phase 2a sample size underlying earlier atacicept findings.
- Whether planned lupus nephritis development addresses the safety concerns from the terminated prior trial, including monitoring and dosing plans.
- Full MAU868 interim data, subsequent trial design and regulatory path.
- Future financing requirements, debt terms and the potentially significant milestone and royalty burdens under the Ares, Amplyx and Novartis agreements.
- Clinical supply capacity, third-party manufacturing and trial execution risks, and progress in strengthening internal controls.