vTv Therapeutics Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. vTv is a clinical-stage pharmaceutical company; it has no product-sales revenue. Results consolidate its operating subsidiary, vTv Therapeutics LLC.
Financial results and liquidity
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $3.000 million | $7,000 | $3.996 million | $15,000 |
| Operating expenses | $4.603 million | $2.839 million | $14.549 million | $13.697 million |
| Operating loss | $1.603 million | $2.832 million | $10.553 million | $13.682 million |
| Net loss attributable to vTv | $1.087 million | $1.533 million | $5.936 million | $9.625 million |
| Basic and diluted loss per Class A share | $0.02 | $0.03 | $0.10 | $0.21 |
- Q3 revenue included $2.0 million from a Reneo development milestone and $1.0 million from a Newsoara milestone. Nine-month revenue also included approximately $1.0 million recognized following an amendment to the Huadong license agreement.
- At September 30, cash and cash equivalents were $19.566 million, total current assets $22.171 million, and current liabilities $5.510 million. Long-term investments were $8.539 million; total liabilities were $8.369 million.
- Operating cash use was $12.891 million for the first nine months, versus $15.788 million in the prior-year period. Financing provided $26.710 million, primarily from common-stock sales; cash increased $13.819 million.
- The company reported $636,000 of current notes payable and no long-term notes payable. Its previous venture loan was repaid in December 2020.
- Accumulated deficit was $259.0 million. The company reported no product revenue and continued to incur losses.
Material changes and notable items
- Revenue rose sharply from negligible levels, largely because of development milestones and license-accounting adjustments; it is not recurring product revenue.
- Nine-month operating loss narrowed by $3.129 million. Lower azeliragon trial spending was partly offset by higher HPP737, TTP399, and compensation costs. Q3 R&D rose 34.7% year over year, while G&A increased by $1.150 million.
- Other income for the first nine months was $2.425 million, including fair-value gains on the Reneo investment and related-party warrants. Q3 other income was $244,000 net: a $1.3 million warrant gain was offset by a $1.1 million Reneo investment loss. These are valuation changes, not operating cash inflows.
- Share issuances raised $26.111 million net during the nine months under equity financing arrangements. Class A shares outstanding were 66,471,176 at quarter-end, compared with 54,050,710 at December 31, 2020. The filing reports 66,942,777 Class A shares outstanding on November 9, 2021.
- Redeemable noncontrolling interest declined from $83.895 million at year-end to $44.610 million at September 30, reflecting its redemption-value measurement. MacAndrews & Forbes affiliates controlled approximately 66.6% of combined voting power at quarter-end.
Outlook, risks, and contingencies
- Management expected existing cash and access to equity financing to fund operations into the fourth quarter of 2022, based on current plans. The company stated that these conditions raise substantial doubt about its ability to continue as a going concern. ATM and Lincoln Park financing capacity depends on stock price, trading volume, and other conditions; future financing is not assured and could dilute shareholders.
- As of September 30, the company reported $37.9 million remaining under its ATM sales agreement and the ability to sell approximately 9.4 million additional shares under its Lincoln Park agreement. It had already raised approximately $11.1 million gross through Lincoln Park.
- In October 2021, the company appointed Deepa Prasad CEO and announced a strategic focus on TTP399 for type 1 diabetes and TTP273 for cystic-fibrosis-related diabetes. It planned to pause U.S. HPP737 development while evaluating strategic options, and was considering cost reductions, potentially including workforce reductions.
- The company reported positive October 2021 mechanistic-study results for TTP399: no increase in ketone levels relative to placebo during acute insulin withdrawal. It planned to initiate registrational studies in the first half of 2022, subject to ongoing FDA discussions. TTP399 had received FDA Breakthrough Therapy Designation.
- Azeliragon development for Alzheimer’s disease in patients with type 2 diabetes had been discontinued. The filing describes material clinical, regulatory, financing, patient-enrollment, intellectual-property, and commercialization uncertainties. No material legal proceedings or off-balance-sheet arrangements were reported.
Key investor verification points
- Confirm availability and likely dilution from the remaining ATM and Lincoln Park equity capacity, and whether financing supports the stated runway.
- Track cash burn, milestone-dependent collaboration revenue, and the timing and design of planned TTP399 registrational trials.
- Verify execution of the revised pipeline priorities, HPP737 strategic review, and any cost or workforce reductions.
- Assess the significance of non-cash fair-value gains, redemption-value changes, and the company’s concentrated voting control when evaluating reported results and shareholder exposure.