Savara Inc

Previous wording

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements contained herein that involve risks and uncertainties, such as Savara’s plans, objectives, expectations, intentions, and beliefs should be considered forward-looking statements. Savara’s actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to the following: the ability to project future cash utilization and reserves needed for contingent future liabilities and business operations, the risks associated with the process of conducting clinical trials and developing, obtaining regulatory approval for and commercializing drug candidates that are safe and effective for use as human therapeutics, the timing and ability to raise additional capital as needed to fund continued operations, natural disasters, pandemics, geopolitical events (including the war between Russia and Ukraine and the war in the Middle East), and those discussed in the section entitled “Risk Factors” in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission ("SEC") on March 7, 2024, all of which are difficult to predict.

Current wording

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements contained herein that involve risks and uncertainties, such as Savara’s plans, objectives, expectations, intentions, and beliefs should be considered forward-looking statements. Savara’s actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to the following: the ability to project future cash utilization and reserves needed for contingent future liabilities and business operations, the risks associated with the process of conducting clinical trials and developing, obtaining regulatory approval for and commercializing drug candidates that are safe and effective for use as human therapeutics, the timing and ability to raise additional capital as needed to fund continued operations, natural disasters, pandemics, geopolitical events (including the war between Russia and Ukraine and the war in the Middle East), the Company’s ability to maintain compliance with its covenants under its long-term debt instruments and those discussed in the section entitled “Risk Factors” in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission ("SEC") on March 7, 2024, all of which are difficult to predict.

Previous wording

Savara Inc. (together with its subsidiaries “Savara,” the “Company,” “we,” “our” or “us”) is a clinical-stage biopharmaceutical company focused on rare respiratory diseases. Our sole program, molgramostim, is an inhaled biologic, specifically, inhaled granulocyte-macrophage colony-stimulating factor in Phase 3 development for aPAP. Savara, together with its wholly-owned subsidiaries, which include Aravas Inc. and Savara ApS, operate in one segment with its principal office in Langhorne, Pennsylvania, though a majority of our employees work remotely.

Current wording

Savara Inc. (together with its subsidiaries “Savara,” the “Company,” “we,” “our” or “us”) is a clinical-stage biopharmaceutical company focused on rare respiratory diseases. Our sole program, molgramostim, is an inhaled biologic, specifically, inhaled granulocyte-macrophage colony-stimulating factor (GM-CSF) in Phase 3 development for aPAP. Savara previously announced positive top-line results from the Phase 3 clinical trial and plans to complete a Biological License Application submission with the FDA in the first quarter of 2025. Savara, together with its wholly-owned subsidiaries, which include Aravas Inc. and Savara ApS, operate in one segment with its principal office in Langhorne, Pennsylvania, though a majority of our employees work remotely.

Previous wording

Since inception, we have devoted our efforts and resources to identifying and developing our product candidates, recruiting personnel, and raising capital. We have incurred operating losses and negative cash flow from operations and have no product revenue from inception to date. From inception to June 30, 2024, we have raised net cash proceeds of approximately $476.7 million, primarily from underwritten offerings of our common stock, private placements of common stock, and debt financings.

Current wording

Since inception, we have devoted our efforts and resources to identifying and developing our product candidates, recruiting personnel, and raising capital. We have incurred operating losses and negative cash flow from operations and have no product revenue from inception to date. From inception to September 30, 2024, we have raised net cash proceeds of approximately $594.9 million, primarily from underwritten offerings of our common stock, private placements of common stock, and debt financings.

Previous wording

We have never been profitable and have incurred operating losses every year since inception. Our net losses for the three months ended June 30, 2024 and 2023 were $22.2 million and $11.4 million, respectively, and the net loss for the year ended December 31, 2023 was $54.7 million. As of June 30, 2024, we had an accumulated deficit of approximately $436.0 million. Our operating losses primarily resulted from expenses attributed to our research and development programs and from general and administrative costs associated with our operations.

Current wording

We have never been profitable and have incurred operating losses every year since inception. Our net losses for the three months ended September 30, 2024 and 2023 were $24.2 million and $16.6 million, respectively, and the net loss for the year ended December 31, 2023 was $54.7 million. As of September 30, 2024, we had an accumulated deficit of approximately $460.2 million. Our operating losses primarily resulted from expenses attributed to our research and development programs and from general and administrative costs associated with our operations.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $23.9 million and short-term investments of $97.7 million. We will continue to require additional capital to continue our clinical development and potential commercialization activities. Although we have sufficient capital to fund many of our planned activities, we may need to continue to raise additional capital to further fund the development of, and seek regulatory approvals for, our product candidate and begin to commercialize any approved product. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial condition and our ability to develop our product candidate.

Current wording

As of September 30, 2024, we had cash and cash equivalents of $21.4 million and short-term investments of $198.0 million. We will continue to require additional capital to continue our clinical development and potential commercialization activities. Although we have sufficient capital to fund many of our planned activities, we may need to continue to raise additional capital to further fund the development of, and seek regulatory approvals for, our product candidate and begin to commercialize any approved product. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial condition and our ability to develop our product candidate.

Previous wording

On July 1, 2024, the Company sold an aggregate of 26,246,720 shares of the Company’s common stock, par value $0.001 per share, pursuant to a registered direct offering (the “July 2024 Offering”) at an offering price of $3.81 per share. The July 2024 Offering resulted in gross proceeds of approximately $100.0 million. The Company estimates approximately $93.7 million of net proceeds from the July 2024 Offering after taking into consideration underwriter commissions, legal fees, and other customary closing costs. The July 2024 Offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-279274), which was previously filed with the SEC on May 9, 2024 and declared effective on May 21, 2024 ("2024 Registration Statement").

Current wording

On July 1, 2024, the Company sold an aggregate of 26,246,720 shares of the Company’s common stock, par value $0.001 per share, pursuant to an underwritten offering at an offering price of $3.81 per share. The July 2024 Offering resulted in net proceeds of $93.8 million after taking into consideration underwriter commissions, legal fees, and other customary closing costs. The July 2024 Offering was made pursuant to the Company’s 2024 Registration Statement.

Previous wording

There have not been any material changes during the six months ended June 30, 2024, to the methodology applied by management for critical accounting policies previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023. Please read Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates in our Annual Report on Form 10-K for the year ended December 31, 2023, for further description of our critical accounting policies.

Current wording

There have not been any material changes during the nine months ended September 30, 2024, to the methodology applied by management for critical accounting policies previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023. Please read Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates in our Annual Report on Form 10-K for the year ended December 31, 2023, for further description of our critical accounting policies.

Previous wording

Research and development expenses increased by $16.8 million, or 95.0%, to $34.4 million for the six months ended June 30, 2024 from $17.6 million for the six months ended June 30, 2023. This increase is primarily due to the performance of tasks related to our molgramostim program, which includes approximately $9.2 million of costs related to our chemistry, manufacturing, and controls activities, primarily driven by initiatives to establish our second drug substance manufacturer, $2.1 million of costs related to our IMPALA-2 trial and Pediatric Study, including CRO-related activities, $1.9 million of costs related to regulatory affairs and quality assurance, and $3.6 million due to an increase in personnel including related costs and other departmental overhead.

Current wording

Research and development expenses increased by $6.4 million, or 46.5%, to $20.3 million for the three months ended September 30, 2024 from $13.9 million for the three months ended September 30, 2023. This increase is primarily due to the performance of tasks related to our molgramostim program, which includes approximately $3.7 million of costs related to our chemistry, manufacturing, and controls activities, primarily driven by initiatives to establish our second drug substance manufacturer, $0.2 million of clinical costs driven by the ramp up of the pediatric study, $1.0 million of costs related to regulatory affairs and quality assurance, and $1.5 million due to an increase in personnel including related costs and other departmental overhead.

Previous wording

General and administrative expenses increased by $2.2 million, or 67.8%, to $5.5 million for the three months ended June 30, 2024 from $3.3 million for the three months ended June 30, 2023. The increase is due to personnel and related costs of $1.1 million, certain commercial activities of $0.8 million, and other overhead of $0.3 million primarily driven by consultant costs.

Current wording

General and administrative expenses increased by $1.9 million, or 45.0%, to $6.0 million for the three months ended September 30, 2024 from $4.1 million for the three months ended September 30, 2023. The increase is due to personnel and related costs of $0.8 million, certain commercial activities of $0.9 million, and other departmental overhead of $0.2 million.

Previous wording

Other income, net increased by approximately $0.7 million to $3.1 million for the six months ended June 30, 2024 from $2.3 million for the six months ended June 30, 2023. The increase is primarily related to the increase in Interest income during the six months ended June 30, 2024 as a result of both an increase in our short-term investments following various equity financings and an increase in market interest rates.

Current wording

Other income, net increased by $0.7 million to $2.1 million for the three months ended September 30, 2024 from $1.4 million for the three months ended September 30, 2023. The increase is primarily related to an increase in Interest income as a result of higher balances in our short-term investments following various equity financings.

Previous wording

Results of Operations – Comparison of Six Months Ended June 30, 2024 and 2023

Current wording

Results of Operations – Comparison of Nine Months Ended September 30, 2024 and 2023

Previous wording

Research and development expenses increased by $8.7 million, or 97.7%, to $17.6 million for the three months ended June 30, 2024 from $8.9 million for the three months ended June 30, 2023. This increase is primarily due to the performance of tasks related to our molgramostim program, which includes approximately $4.8 million of costs related to our chemistry, manufacturing, and controls activities, primarily driven by initiatives to establish our second drug substance manufacturer, $1.2 million of costs related to our IMPALA-2 trial and Pediatric Study, including CRO-related activities, $1.3 million of costs related to regulatory affairs and quality assurance, and $1.4 million due to an increase in personnel including related costs and other departmental overhead.

Current wording

Research and development expenses increased by $23.2 million, or 73.7%, to $54.7 million for the nine months ended September 30, 2024 from $31.5 million for the nine months ended September 30, 2023. This increase is primarily due to the performance of tasks related to our molgramostim program, which includes approximately $12.9 million of costs related to our chemistry, manufacturing, and controls activities, primarily driven by initiatives to establish our second drug substance manufacturer, $2.4 million of costs related to our IMPALA-2 trial and pediatric study, including CRO-related activities, $2.9 million of costs related to regulatory affairs and quality assurance, and approximately $5.0 million due to an increase in personnel including related costs and other departmental overhead.

Previous wording

General and administrative expenses increased by $4.5 million, or 67.6%, to $11.2 million for the six months ended June 30, 2024 from $6.7 million for the six months ended June 30, 2023. The increase is due to personnel and related costs of $1.7 million, certain commercial activities of $1.9 million, and other overhead of $0.9 million primarily driven by patient advocacy activities and consultant costs.

Current wording

General and administrative expenses increased by approximately $6.4 million, or 58.9%, to $17.2 million for the nine months ended September 30, 2024 from $10.8 million for the nine months ended September 30, 2023. The increase is due to personnel and related costs of $2.5 million, certain commercial activities of $2.8 million, and other overhead of $1.1 million primarily driven by patient advocacy activities and consultant costs.

Previous wording

As of June 30, 2024, we had $23.9 million of cash and cash equivalents, $97.7 million in short-term investments, and an accumulated deficit of approximately $436.0 million. As discussed in Note 6. Long-term Debt in the notes to the condensed consolidated financial statements included in this Quarterly Report, during April 2022, we entered into an Amended Loan Agreement with Silicon Valley Bank that provided for a $26.5 million term loan facility, the proceeds of which were used to refinance all outstanding obligations under our pre-existing loan agreement with Silicon Valley Bank.

Current wording

As of September 30, 2024, we had $21.4 million of cash and cash equivalents, $198.0 million in short-term investments, and an accumulated deficit of approximately $460.2 million. As discussed in Note 6. Long-term Debt in the notes to the condensed consolidated financial statements included in this Quarterly Report, during April 2022, we entered into an Amended Loan Agreement with Silicon Valley Bank that provided for a $26.5 million term loan facility, the proceeds of which were used to refinance all outstanding obligations under our pre-existing loan agreement with Silicon Valley Bank.

Previous wording

Cash used in operating activities for the six months ended June 30, 2024 was $43.1 million, consisting of a net loss of $42.6 million and net $2.9 million in changes due to operating assets and liabilities. This was partially offset by approximately $2.4 million of net noncash charges (comprised of depreciation and amortization including right-of-use assets, accretion on premium to short-term investments, amortization of debt issuance costs, foreign currency, and stock-based compensation).

Current wording

Cash used in operating activities for the nine months ended September 30, 2024 was $65.8 million, consisting of a net loss of $66.8 million and net $2.3 million in changes due to operating assets and liabilities. This was partially offset by approximately $3.3 million of net noncash charges (comprised of depreciation and amortization including right-of-use assets, accretion on premium to short-term investments, amortization of debt issuance costs, and stock-based compensation).

Previous wording

Cash provided by investing activities of $40.3 million for the six months ended June 30, 2024 was primarily associated with proceeds from the maturities of short-term investments partially offset by cash used for purchases of short-term investments.

Current wording

Cash used in investing activities of $57.8 million for the nine months ended September 30, 2024 was primarily associated with purchases of short-term investments partially offset by proceeds from the maturities of short-term investments.

Previous wording

As of June 30, 2024, we had cash, cash equivalents, and short-term investments of approximately $121.5 million. Although we have sufficient capital to fund our planned activities, including those discussed in Note 9. Commitments – Manufacturing and Other Commitments and Contingencies, in the notes to the condensed consolidated financial statements included in this Quarterly Report, we may need to continue to raise additional capital to further fund the development of, and seek regulatory approvals for, our product candidate and to begin commercialization of any approved product. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial condition and our ability to develop our product candidate.

Current wording

As of September 30, 2024, we had cash, cash equivalents, and short-term investments of approximately $219.4 million. Although we have sufficient capital to fund our planned activities, including those discussed in Note 9. Commitments – Manufacturing and Other Commitments and Contingencies, in the notes to the condensed consolidated financial statements included in this Quarterly Report, we may need to continue to raise additional capital to further fund the development of, and seek regulatory approvals for, our product candidate and to begin commercialization of any approved product. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development, chemistry, manufacturing, controls, regulatory and commercialization efforts. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial condition and our ability to develop our product candidate.

Previous wording

On July 1, 2024, the Company sold an aggregate of 26,246,720 shares of the Company’s common stock, par value $0.001 per share, pursuant to the July 2024 Offering at an offering price of $3.81 per share. The July 2024 Offering resulted in gross proceeds of approximately $100.0 million. The Company estimates approximately $93.7 million of net proceeds from the July 2024 Offering after taking into consideration underwriter commissions, legal fees, and other customary closing costs. The July 2024 Offering was made pursuant to the Company’s 2024 Registration Statement.

Current wording

On July 1, 2024, the Company sold an aggregate of 26,246,720 shares of the Company’s common stock, par value $0.001 per share, pursuant to the July 2024 Offering at an offering price of $3.81 per share. The July 2024 Offering resulted in net proceeds of $93.8 million after taking into consideration underwriter commissions, legal fees, and other customary closing costs. The July 2024 Offering was made pursuant to the Company’s 2024 Registration Statement.