Savara Inc

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 granulocyte-macrophage colony-stimulating factor in Phase 3 development for autoimmune pulmonary alveolar proteinosis (“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, MOLBREEVI, 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 substantially all of 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 December 31, 2023, we have raised net cash proceeds of approximately $476.7 million, primarily from public offerings of our common stock and pre-funded warrants to acquire our common stock, private placements of convertible preferred stock, and debt financings.

Current wording

Since inception, we have devoted substantially all of 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 December 31, 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 in each year since inception. Our net losses were $54.7 million and $38.2 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $393.4 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 in each year since inception. Our net losses were $95.9 million and $54.7 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $489.3 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 December 31, 2023, we had cash and cash equivalents of $26.6 million and short-term investments of $135.7 million. 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 December 31, 2024, we had cash and cash equivalents of $15.1 million and short-term investments of $181.2 million. 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

Continued Funding of Federal Government Operations

Current wording

Continued Funding of Federal Government Operations and Federal Debt Limit

Previous wording

On January 18, 2024, the U.S. Congress passed a third continuing resolution ("CR") for fiscal year 2024, H.R. 2872, the “Further Additional Continuing Appropriations and Other Extensions Act, 2024,” to avoid a partial government shutdown, which President Biden signed on January 19, 2024. The new CR extends the "laddered" approach from the current CR, with certain appropriations bills expiring on March 1, 2024 through March 8, 2024. Additionally, the U.S. Congress is currently trying to pass legislation consisting of a package of six spending bills to continue funding a broad portion of the federal government through the fiscal year and avoid interruptions to the operations of the government. The outcome and impact of a potential government shutdown to our operations is uncertain; however, we are actively assessing and monitoring the potential impacts and situation.

Current wording

On December 20, 2024, the U.S. Congress advanced the American Relief Act, 2025 (H.R. 10545), a continuing resolution ("CR") that funds the federal government until March 14, 2025. On March 14, 2025, the 119th U.S. Congress, voted to pass an additional stopgap CR, as subsequently executed by President Trump, which continues the funding of the federal government through September 2025 and avoids interruptions to the operations of the government. The U.S. Congress will also have to address the federal debt limit, as the Fiscal Responsibility Act ("FRA") suspended the debt limit on January 2, 2025. The outcome and impact of a potential future government shutdown and adequately addressing the federal debt limit to our operations is uncertain; however, we are actively assessing and monitoring the potential impacts and situation.

Previous wording

We record the costs associated with research, nonclinical and clinical trials, and manufacturing development as incurred. These costs are a significant component of our research and development expenses, with a substantial portion of our on-going research and development activities conducted by third party service providers, including contract research and manufacturing organizations.

Current wording

We record the costs associated with research, nonclinical and clinical trials, and manufacturing development as incurred. These costs are a significant component of our research and development expenses, with a substantial portion of our on-going research and development activities conducted by third party service providers, including contract research, regulatory support, and manufacturing organizations.

Previous wording

We accrue for expenses resulting from obligations under agreements with CROs, CMOs, and other outside service providers for which payment flows do not match the periods over which materials or services are provided to us. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. We make significant judgments and estimates in determining the accrual balance in each reporting period. In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset which will be amortized or expensed as the contracted services are performed. As actual costs become known, we adjust our prepaids and accruals. Inputs, such as the services performed, the number of patients enrolled, or the trial duration, may vary from our estimates, resulting in adjustments to research and development expense in future periods. Changes in these estimates that result in material changes to our accruals could materially affect our results of operations. To date, we have not experienced any material deviations between accrued and actual research and development expenses.

Current wording

We accrue for expenses resulting from obligations under agreements with CROs, CMOs, and other outside service providers for which payment flows do not match the periods over which materials or services are provided to us. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the activities performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. We make significant judgments and estimates in determining the accrual balance in each reporting period. In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset which will be amortized or expensed as the contracted services are performed. As actual costs become known, we adjust our prepaids and accruals and related expense. Inputs, such as the services performed, the number of patients enrolled, or the trial duration, may vary from our estimates, resulting in adjustments to research and development expense in future periods. Changes in these estimates that result in material changes to our accruals could materially affect our results of operations. To date, we have not experienced any material deviations between accrued and actual research and development expenses.

Previous wording

In accordance with ASC Topic 350, Intangibles – Goodwill and Other, our IPR&D and goodwill, when present, is determined to have indefinite lives and, therefore, is not amortized. Instead, it is tested for impairment annually and between annual tests if we become aware of an event or a change in circumstances that would indicate the carrying value may be impaired.

Current wording

In accordance with ASC Topic 350, Intangibles – Goodwill and Other, our IPR&D is determined to have an indefinite life and, therefore, is not amortized. Instead, it is tested for impairment annually and between annual tests if we become aware of an event or a change in circumstances that would indicate the carrying value may be impaired.

Previous wording

When we perform a quantitative assessment of acquired IPR&D, we compare its carrying value to its estimated fair value to determine whether an impairment exists. In previous years, due to a lack of Level 1 or Level 2 inputs, the Multi-Period Excess Earnings Method (“MPEEM”), which is a form of the income approach, was used to estimate the fair value of acquired IPR&D when performing a quantitative assessment. Under the MPEEM, the fair value of an intangible asset is equal to the present value of the asset’s projected incremental after-tax cash flows (excess earnings) remaining after deducting the market rates of return on the estimated value of contributory assets (contributory charge) over its remaining useful life. We evaluate potential impairment of our acquired IPR&D annually on September 30, utilizing a qualitative approach and determining if it was more-likely-than not that the fair value was impaired. We evaluate potential impairment of our acquired goodwill, if any, annually on June 30, performing the quantitative analysis based upon market capitalization.

Current wording

When we perform a quantitative assessment of acquired IPR&D, we compare its carrying value to its estimated fair value to determine whether an impairment exists. In previous years, due to a lack of Level 1 or Level 2 inputs, the Multi-Period Excess Earnings Method (“MPEEM”), which is a form of the income approach, was used to estimate the fair value of acquired IPR&D when performing a quantitative assessment. Under the MPEEM, the fair value of an intangible asset is equal to the present value of the asset’s projected incremental after-tax cash flows (excess earnings) remaining after deducting the market rates of return on the estimated value of contributory assets (contributory charge) over its remaining useful life. We evaluate potential impairment of our acquired IPR&D annually on September 30th, utilizing a qualitative approach and determining if it was more-likely-than not that the fair value was impaired.

Previous wording

Our determinations as to whether, and if so, the extent to which goodwill and acquired IPR&D become impaired are highly judgmental and, in the case of applying the MPEEM approach to estimate fair value, are based on significant assumptions regarding our projected future financial condition and operating results, changes in the manner of our use of the acquired assets, development of our acquired assets or our overall business strategy, and regulatory, market, and economic environment and trends.

Current wording

Our determinations as to whether, and if so, the extent to which acquired IPR&D become impaired are highly judgmental and, in the case of applying the MPEEM approach to estimate fair value, are based on significant assumptions regarding our projected future financial condition and operating results, changes in the manner of our use of the acquired assets, development of our acquired assets or our overall business strategy, and regulatory, market, and economic environment and trends.

Previous wording

If the associated research and development effort is abandoned, the related asset will be written-off, and we will record a non-cash impairment loss on our consolidated statements of operations and comprehensive loss. For those products that reach commercialization, the IPR&D asset will be amortized over its estimated useful life.

Current wording

If the associated research and development effort is abandoned, the related asset will be written-off, and we will record a non-cash impairment loss on our consolidated statements of operations and comprehensive loss. For those products that reach regulatory approval or commercialization, the IPR&D asset will be amortized over its estimated useful life.

Previous wording

We expect research and development expenses will remain significant in the future as we advance our molgramostim product candidate through clinical trials and pursue regulatory approvals, which will require a significant increased investment in regulatory support and contract manufacturing activities, including investing in the development of a second source manufacturer and clinical supplies.

Current wording

We expect research and development expenses will remain significant in the future as we advance our MOLBREEVI product candidate through clinical trials and pursue regulatory approvals, which will require a significant increased investment in regulatory support and contract manufacturing activities, including investing in the development of second source manufacturers and clinical supplies.

Previous wording

The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in timely developing and achieving regulatory approval for our product candidate. The probability of success of our product candidate may be affected by numerous factors, including clinical data, competition, intellectual property rights, manufacturing capability, and commercial viability. As a result, we are unable to accurately determine the duration and completion costs of our development projects or when and to what extent we will generate revenue from the commercialization and sale of molgramostim.

Current wording

The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in timely developing and achieving regulatory approval for our product candidate. The probability of success of our product candidate may be affected by numerous factors, including clinical data, competition, intellectual property rights, manufacturing capability, and commercial viability. As a result, we are unable to accurately determine the duration and completion costs of our development projects or when and to what extent we will generate revenue from the commercialization and sale of MOLBREEVI.

Previous wording

Research and development expenses increased $16.4 million, or 58.8%, to $44.3 million for the year ended December 31, 2023 from $27.9 million for the year ended December 31, 2022. This increase is primarily due to the performance of tasks related to our molgramostim program which includes approximately $6.8 million of costs related to our chemistry, manufacturing, and controls activities, $4.4 million of costs related to our IMPALA-2 pivotal trial, including CRO-related activities, $1.6 million of costs related to quality assurance, and $3.6 million due to an increase in personnel and related costs.

Current wording

Research and development expenses increased $33.8 million, or 76.3%, to $78.0 million for the year ended December 31, 2024 from $44.3 million for the year ended December 31, 2023. This increase is primarily due to the performance of tasks related to our MOLBREEVI program which includes approximately $19.9 million of costs related to our chemistry, manufacturing, and controls activities, primarily driven by initiatives to establish our second drug substance manufacturer, $2.8 million of costs related to our IMPALA-2 trial, IMPACT trial, and Savara EAP, including CRO-related activities, $4.1 million of costs related to regulatory affairs and quality assurance, and $7.0 million due to an increase in personnel and related costs and other departmental overhead.

Previous wording

Other income, net increased $4.6 million to $5.3 million for the year ended December 31, 2023 from $0.7 million for the year ended December 31, 2022. The change is primarily related to the increase in interest income during the year ended December 31, 2023 as a result of both an increase in our short-term investments following the registered direct offering of our common stock and pre-funded warrants in July 2023 (the “July 2023 Offering”) and an increase in market interest rates. Refer Note 9. Stockholders’ Equityof the consolidated financial statements in this annual report on Form 10-K for additional discussion of the July 2023 Offering..

Current wording

Other income, net increased $2.0 million to $7.3 million for the year ended December 31, 2024 from $5.3 million for the year ended December 31, 2023. The increase is primarily related to an increase in interest income as a result of higher balances and more favorable rates and returns on our short-term investments following various equity financings. Refer to Note 9. Stockholders’ Equity of the consolidated financial statements in this annual report on Form 10-K for additional discussion of the July 2024 Offering.

Previous wording

As of December 31, 2023, we had $26.6 million in cash, $135.7 million in short-term investments, and an accumulated deficit of $393.4 million. Since inception through December 31, 2023, our operations have been financed primarily by net cash proceeds of approximately $476.7 million, primarily from public offerings of common stock, registered direct offerings of common stock, private placements, and debt financings.

Current wording

As of December 31, 2024, we had $15.1 million in cash and cash equivalents, $181.2 million in short-term investments, and an accumulated deficit of $489.3 million. Since inception through December 31, 2024, our operations have been financed primarily by 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 used and intend to use the net proceeds from these offerings for working capital and general corporate purposes, which include, but are not limited to, the funding of clinical development of and pursuing regulatory approval for our product candidate and general and administrative expenses. As we continue to progress on the IMPALA-2 pivotal trial, we will continue to monitor our liquidity and capital requirements.

Current wording

We have used and intend to use the net proceeds from these offerings for working capital and general corporate purposes, which include, but are not limited to, the funding of clinical development of and pursuing regulatory approval for our product candidate and general and administrative expenses. As we continue to progress on the IMPALA-2 trial, pursue regulatory approval, and invest in pre-commercial activities, we will continue to monitor our liquidity and capital requirements.

Previous wording

On July 6, 2021, the Company entered into a Common Stock Sales Agreement with Evercore, as sales agent (the “Sales Agreement”), pursuant to which the Company may offer and sell, from time to time, through Evercore, shares of our common stock ("Shares"), having an aggregate offering price of not more than $60 million. The Agreement was effective on July 16, 2021, the date the Company’s shelf registration agreement on Form S-3, as filed with the SEC on July 6, 2021, was declared effective by the SEC (the “New Registration Statement”). The Shares will be offered and sold pursuant to the New Registration Statement. Subject to the terms and conditions of the Sales Agreement, Evercore will use commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. The Company has provided Evercore with customary indemnification rights, and Evercore will be entitled to a commission at a fixed commission rate equal to 3% of the gross proceeds per Share sold. Sales of the Shares, if any, under the Sales Agreement may be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended. The Company has no obligation to sell any of the Shares and may at any time suspend sales under the Sales Agreement or terminate the Sales Agreement.

Current wording

On July 6, 2021, the Company entered into a Common Stock Sales Agreement with Evercore Group L.L.C. (“Evercore”), as sales agent (the “Sales Agreement”), pursuant to which the Company may offer and sell, from time to time, through Evercore, shares of Savara’s common stock, par value $0.001 per share (the “Shares”), having an aggregate offering price of not more than $100.0 million. The Sales Agreement was effective on July 16, 2021, the date the Company’s Registration Statement on Form S-3 (File No. 333-257709) (the “2021 Registration Statement”), filed with the SEC on July 6, 2021, was declared effective by the SEC. From July 16, 2021 through May 20, 2024, Shares were sold pursuant to the 2021 Registration Statement. Since May 21, 2024, the Shares have been offered and sold pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-279274), filed with the SEC on May 9, 2024 (the “2024 Registration Statement”). Subject to the terms and conditions of the Sales Agreement, Evercore will use commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. The Company has provided Evercore with customary indemnification rights, and Evercore will be entitled to a commission at a fixed commission rate equal to 3% of the gross proceeds per Share sold. Sales of the Shares, if any, under the Sales Agreement may be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended. The Company has no obligation to sell any of the Shares and may at any time suspend sales under the Sales Agreement or terminate the Sales Agreement.

Previous wording

During the year ended December 31, 2023, we sold 2,071,511 shares of common stock under the Evercore Sales Agreement to a single institutional investor resulting in net proceeds of $8.8 million. During the year ended December 31, 2022, we did not sell any shares of common stock under the Evercore Sales Agreement.

Current wording

During the year ended December 31, 2024 and 2023, we sold 6,038,650 shares of the Company’s common stock resulting in net proceeds of $24.4 million and 2,071,511 shares of common stock resulting in net proceeds of $8.8 million, in each case, to a single institutional investor pursuant to the Sales Agreement, respectively.

Previous wording

On July 17, 2023, we completed a registered direct offering of our common stock and pre-funded warrants for gross proceeds of approximately $80 million and net proceeds, after deducting underwriting discounts, commissions and offering expenses, of approximately $74.9 million as discussed in Note 9. Stockholders’ Equity in the notes to the consolidated financial statements included in this annual report on Form 10-K.

Current wording

On July 17, 2023, we completed an underwritten offering of our common stock and pre-funded warrants (the "July 2023 Offering") resulting in net proceeds of approximately $74.9 million as discussed in Note 9. Stockholders’ Equity in the notes to the consolidated financial statements included in this annual report on Form 10-K.

Previous wording

Cash used in operating activities for the year ended December 31, 2022 was $34.6 million, consisting of a net loss of $38.2 million, which was partially offset by non-cash charges of $2.6 million, mainly comprised of amortization of right-of-use assets, depreciation, amortization of debt issuance costs, and stock-based compensation, and further offset by a net increase in assets and liabilities of $1.0 million. The change in our net operating assets and liabilities was primarily due to a decrease in accrued liabilities mostly related to research and development costs for molgramostim and a decrease related to a cessation of residual costs of the wind-down of a prior ancillary product trial.

Current wording

Cash used in operating activities for the year ended December 31, 2024 was $89.1 million, consisting of a net loss of $95.9 million offset by a net increase in operating assets and liabilities of $1.8 million and $5.0 million of net noncash charges. The change in our net operating assets and liabilities was primarily due to an increase in accrued liabilities, specifically, compensation and research and development costs for MOLBREEVI. Net noncash charges are mainly comprised of amortization of debt issuance costs, accretion on discount to short-term investments, and stock-based compensation.

Previous wording

Cash used in operating activities for the year ended December 31, 2023 was $51.1 million, consisting of a net loss of $54.7 million and a net increase in operating assets and liabilities of $4.1 million. The change in our net operating assets and liabilities was primarily due to an increase in accrued liabilities, specifically, compensation and research and development costs for molgramostim. This was partially offset by approximately $0.5 million of non-cash charges, mainly comprised of amortization of debt issuance costs, accretion on discount/amortization on premium to short-term investments, and stock-based compensation.

Current wording

Cash used in operating activities for the year ended December 31, 2023 was $51.1 million, consisting of a net loss of $54.7 million and a net increase in operating assets and liabilities of $4.1 million. The change in our net operating assets and liabilities was primarily due to an increase in accrued liabilities, specifically, compensation and research and development costs for MOLBREEVI. This was partially offset by approximately $0.5 million of non-cash charges, mainly comprised of amortization of debt issuance costs, accretion on discount/amortization on premium to short-term investments, and stock-based compensation.

Previous wording

As of December 31, 2023, we had cash, cash equivalents, and short-term investments of $162.3 million. Although we have sufficient capital to fund our planned activities, including those discussed in Note 10. Commitments – Manufacturing and Other of the consolidated financial statements in this annual report on Form 10-K, we may need 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 December 31, 2024, we had cash, cash equivalents, and short-term investments of $196.3 million. Although we have sufficient capital to fund our planned activities, including those discussed in Note 10. Commitments – Manufacturing and Other of the consolidated financial statements in this annual report on Form 10-K, we may need 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.

Previous wording

We are subject to various manufacturing royalties and payments and other commitments related to molgramostim.

Current wording

We are subject to various manufacturing royalties and payments and other commitments related to MOLBREEVI.