MetaVia Inc.

Previous wording

We are a clinical-stage biotechnology company focused primarily ondeveloping and commercializing novel pharmaceuticals to treat cardiometabolic diseases. NeuroBo has two programs focused primarily on treatment of metabolic dysfunction-associated steatohepatitis (“MASH”) and obesity. MASH was formerly known as non-alcoholic steatohepatitis (“NASH”). The American Association for the Study of Liver Diseases (“AASLD”) and its European and Latin American counterparts changed the name to metabolic dysfunction-associated steatohepatitis to reflect the complexity of the disease.

Current wording

We are a clinical-stage biotechnology company focused primarily ondeveloping novel pharmaceuticals to treat cardiometabolic diseases. MetaVia has two programs focused primarily on the treatment of MASH and obesity.

Previous wording

Our operations have consisted principally of performing research and development (“R&D”) activities, clinical development and raising capital. Our activities are subject to significant risks and uncertainties, such as failing to secure additional funding before sustainable revenues and profit from operations are achieved. For more information on our business and product candidates, see Part I, Item 1. Business of this Annual Report.

Current wording

Our operations have consisted principally of performing R&D activities, which include preclinical developments and clinical trials, and raising capital. Our activities are subject to significant risks and uncertainties, such as failing to secure additional funding before sustainable revenues and profit from operations are achieved. For more information on our business and product candidates, see Part I, Item 1. Business of this Annual Report.

Previous wording

Our R&D expenses were $9.2 million and $2.8 million for 2023 and 2022, respectively. R&D expenses consist primarily of costs incurred in connection with the development of our product candidates. These expenses include:

Current wording

R&D expenses consist primarily of costs incurred in connection with the development of our product candidates. These expenses include:

Previous wording

We recognize external development costs based on an evaluation of the progress toward completion of specific tasks using information provided to us by our service providers. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense when the goods have been delivered or the services have been performed, or when it is no longer expected that the goods will be delivered, or the services rendered.

Current wording

We recognize external development costs based on an evaluation of the progress toward completion of specific tasks using information provided to us by our service providers. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf, and estimating the level of service provided and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense when the goods have been delivered or the services have been performed, or when it is no longer expected that the goods will be delivered, or the services rendered.

Previous wording

We had no acquired in-process research and development (“IPR&D”) expenses for 2023, compared to $8.2 million of acquired IPR&D expenses for 2022. We include costs to acquire or in-license product candidates in acquired IPR&D. When we acquire the right to develop and commercialize a new product candidate, any up-front payments, or any future milestone payments that relate to the acquisition or licensing of such a right are immediately expensed as acquired in-process research and development in the period in which they are incurred. These costs are immediately expensed provided that the payments do not also represent processes or activities that would constitute a “business,” or provided that the product candidate has not achieved regulatory approval for marketing and, absent obtaining such approval, has no alternative future use. Royalties owed on future sales of any licensed product will be expensed in the period the related revenues are recognized.

Current wording

We include costs to acquire or in-license product candidates in-process research and development (“IPR&D”). When we acquire the right to develop and commercialize a new product candidate, any up-front payments, or any future milestone payments that relate to the acquisition or licensing of such a right are immediately expensed as acquired in-process research and development in the period in which they are incurred. These costs are immediately expensed provided that the payments do not also represent processes or activities that would constitute a “business,” or provided that the product candidate has not achieved regulatory approval for marketing and, absent obtaining such approval, has no alternative future use. Royalties owed on future sales of any licensed product will be expensed in the period the related revenues are recognized.

Previous wording

Our general and administrative expenses were $6.7 million and $8.6 million for 2023 and 2022, respectively. General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting, and audit services.

Current wording

G&A expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. G&A expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting, and audit services.

Previous wording

We anticipate that our general and administrative expenses will increase in the future as a result of accounting, audit, legal, regulatory, compliance, and director and officer insurance costs as we pursue the development of our product pipeline, as well as investor and public relations expenses associated with being a public company.

Current wording

We anticipate that our G&A expenses will increase in the future as a result of accounting, audit, legal, regulatory, compliance, and director and officer insurance costs as we pursue the development of our product pipeline, as well as investor and public relations expenses associated with being a public company.

Previous wording

Our provision for income taxes was zero for 2023 and 2022. We have had significant pre-tax losses since our inception, and we have not yet generated revenues and face significant challenges to becoming profitable. Accordingly, we recorded a valuation allowance on the deferred tax assets attributable to the NOL we have incurred in each year or for our earned R&D credits. We will continue to monitor all positive and negative evidence until we believe it is more likely than not that the valuation allowance is no longer necessary, resulting in an income tax benefit in the period such determination is made.

Current wording

We have had significant pre-tax losses since our inception, and we have not yet generated revenues and face significant challenges to becoming profitable. Accordingly, we recorded a valuation allowance on the deferred tax assets attributable to the NOL we have incurred in each year or for our earned R&D credits. We will continue to monitor all positive and negative evidence until we believe it is more likely than not that the valuation allowance is no longer necessary, resulting in an income tax benefit in the period such determination is made.

Previous wording

As of December 31, 2023 and 2022, our U.S. federal NOL carryforwards were $8.8 million and $1.5 million, respectively. We had U.S. federal R&D credit carryforwards of $24 thousand as of December 31, 2023 and 2022. Since our U.S. federal net operating losses were incurred after December 31, 2017, U.S NOL and R&D credit carryforwards will not expire. As of December 31, 2023 and 2022, we had state NOL carryforwards of $4.4 million and $0.9 million, respectively. We had state R&D credit carryforwards of $2 thousand as of December 31, 2023 and 2022, respectively. Our state NOL and R&D credit carryforwards will begin to expire in 2042, if not utilized. Lastly, since the foreign subsidiary that generated the foreign losses

Current wording

We have U.S. federal NOL carryforwards and U.S. federal R&D credit carryforwards, and these carryforwards will not expire. We also have state NOL carryforwards and state R&D credit carryforwards. Our state NOL and R&D credit carryforwards will begin to expire in 2042, if not utilized.

Previous wording

We have incurred significant operating losses since our inception. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future product candidates. Our net loss was $12.5 million and $14.0 million for 2023 and 2022, respectively. To date, we have not generated any revenue from product sales, collaborations with other companies, government grants or any other source, and do not expect to generate any revenue in the foreseeable future.

Current wording

We have incurred significant operating losses since our inception. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future product candidates. To date, we have not generated any revenue from product sales, collaborations with other companies, government grants or any other source, and do not expect to generate any revenue in the foreseeable future.

Previous wording

As of December 31, 2023 and 2022, we had an accumulated deficit of $108.3 million and $95.8 million, respectively. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. We expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we:

Current wording

We have an accumulated deficit, and we expect to continue to incur significant expenses and increasing operating losses for at least the next several years. We expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we:

Previous wording

Our total operating expenses and loss from operations for 2023 were $15.9 million, a decrease of $3.7 million, or 19.1%, compared to 2022. This decrease was attributable to (i) $8.2 million in lower acquired IPR&D expenses and (ii) $1.9 million in lower general and administrative expenses, partially offset by $6.4 million in higher R&D expenses.

Current wording

Our total operating expenses and loss from operations for 2024 were $28.8 million, an increase of $12.9 million, or 81.3%, compared to 2023. This increase was attributable to higher R&D and G&A expenses.

Previous wording

Our R&D expenses were $9.2 million for 2023, an increase of $6.4 million, or 229.7%, compared to 2022. This increase was primarily related to increased development activities for DA-1241 and DA-1726. Specifically, the $6.4 million increase in R&D expenses was primarily attributable to (i) $6.3 million in higher expenditures for investigational drug manufacturing costs, non-clinical and preclinical services, clinical trials and consulting, (ii) $0.1 million in higher stock-based compensation, and (iii) $0.1 million in higher employee compensation and benefits. Included in R&D expenses for 2023 was $2.4 million of investigational drug manufacturing costs, non-clinical and preclinical expenses incurred under the Shared Services Agreement with Dong-A as compared to none in 2022.

Current wording

Our R&D expenses were $21.6 million for 2024, an increase of $12.4 million, or 135.3%, compared to 2023. This increase was primarily related to increased R&D activities related to Phase 2a clinical trial for DA-1241 and Phase 1 trial for DA-1726 for 2024 as compared to 2023 when R&D activities began to ramp up following the acquisition of DA-1241 and DA-1726 in the fourth quarter of 2022. Specifically, the increase in R&D expenses was primarily attributable to (i) $9.3 million in higher clinical trial expenditures, (ii) $2.5 million in higher expenditures for investigational drug manufacturing, non-clinical and preclinical costs related to expenses incurred under the Shared Services Agreement with Dong-A, and (iii) $1.2 million in higher employee compensation and benefits. These increases were partially offset by (i) $0.2 million in lower consulting expenditures and (ii) $0.4 million in lower other R&D costs.

Previous wording

Our other income for 2023 was $3.4 million, a decrease of $2.2 million, or 39.7%, compared to 2022. This decrease was attributable to a decrease of $5.0 million in gain related to the change in fair value of warrant liabilities as compared to 2022. This decrease was partially offset by $0.5 million of interest income recorded in 2023, of which there was none in 2022, and $2.3 million of financing and other expenses incurred in 2022.

Current wording

Our other income for 2024 was $1.2 million, a decrease of $2.2 million, or 64.4%, compared to 2023. This decrease was attributable to $2.7 million in lower gain related to the change in fair value of warrant liabilities due to warrant exercises in 2023 and the impact of our common stock’s declining stock price during the last few years, partially offset by $0.5 million in higher interest income due primarily to higher average invested amount in 2024.

Previous wording

For 2023, we had a netloss of $12.5 million, or$2.46 per share of basic and diluted common stock, compared to a net loss of $14.0 million, or $43.42 per share of basic and diluted common stock for 2022.

Current wording

For 2024, we had a netloss of $27.6 million, or$3.56 per share of basic and diluted common stock, compared to a net loss of $12.5 million, or $2.46 per share of basic and diluted common stock for 2023.

Previous wording

As reflected in the consolidated financial statements, we had $22.4 million in cash as of December 31, 2023. We have experienced net losses and negative cash flows from operating activities since our inception and had an accumulated deficit of $108.3 million as of December 31, 2023. We have incurred a net loss of $12.5 million and used cash of $10.8 million for operating activities for the year ended December 31, 2023. Due in large part to the ongoing Phase 2a clinical trial for DA-1241 and Phase 1 clinical trial for DA-1726, we expect to continue to incur net losses and negative cash flows from operating activities for the foreseeable future. These conditions raise substantial doubt about our ability to continue as a going concern.

Current wording

As reflected in the consolidated financial statements, we had $16.0 million in cash as of December 31, 2024. We have experienced net losses and negative cash flows from operating activities since our inception and had an accumulated deficit of $135.9 million as of December 31, 2024. We have incurred a net loss of $27.6 million and net cash used in operating activities of $24.7 million for the year ended December 31, 2024. Due in large part to the ongoing Phase 2a clinical trial for DA-1241 and Phase 1 clinical trial for DA-1726, we expect to continue to incur net losses and negative cash flows from operating activities for the foreseeable future. These conditions raise substantial doubt about our ability to continue as a going concern within one year from the issuance of our consolidated financial statements in Part II, Item 8. Financial Statements and Supplementary Data.

Previous wording

We believe that our existing cash will be sufficient to fund our operations into the fourth quarter of 2024. We plan to continue to fund our operations through a combination of equity offerings, debt financings, or other sources, potentially including collaborations, out-licensing and other similar arrangements. There can be no assurance that we will be able to obtain any sources of financing on acceptable terms, or at all. To the extent that we can raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct our business. If we are unable to raise additional capital, we may slow down or stop our ongoing and planned clinical trials until such time as additional capital is raised and this may have a material adverse effect on us.

Current wording

We believe that our existing cash will be sufficient to fund our operations into the third quarter of 2025. We plan to continue to fund our operations from equity offerings, debt financing, or other sources, potentially including collaborations, out-licensing and other similar arrangements. However, there can be no assurance that we will be able to obtain any sources of financing on acceptable terms, or at all, or that the Series A Warrants will be exercised. To the extent that we can raise additional funds by issuing equity securities or in the event our existing warrants are exercised, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct our business. If we are unable to raise additional capital, we may slow down or stop our ongoing and planned clinical trials until such time as additional capital is raised and this may have a material adverse effect on us.

Previous wording

The determination as to whether we can continue as a going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our consolidated financial statements, included elsewhere in this Annual Report, have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of our assets and the satisfaction of our liabilities in the normal course of business.

Current wording

The determination as to whether we can continue as a going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our consolidated financial statements have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of our assets and the satisfaction of our liabilities in the normal course of business.

Previous wording

Our primary use of cash is to fund our R&D activities and clinical development activities. We have funded our operations primarily through public offerings of our common stock and private placements of equity. As of December 31, 2023, we had cash totaling $22.4 million. We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limits of $250 thousand per bank. Our cash balance includes liquid insured deposits, which are obligations of the program banks in which the deposits are held and qualify for FDIC insurance protection per depositor in each recognized legal category of account ownership in accordance with the rules of the FDIC. To date, we have not experienced any losses related to these funds.

Current wording

Our primary use of cash is to fund our R&D activities. We have funded our operations primarily through public offerings of our common stock and private placements of equity and convertible securities. As of December 31, 2024, we had cash totaling $16.0 million. We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limits of $0.25 million per bank. Our cash balance includes liquid insured deposits, which are obligations of the banks in which the deposits are held and qualify for FDIC insurance protection per depositor in each recognized legal category of account ownership in accordance with the rules of the FDIC. To date, we have not experienced any losses related to these funds.

Previous wording

Net cash used in operating activities was $10.8 million for 2023, a decrease of $0.9 million, or 7.8%, compared to $11.7 million for 2022. Net cash used in operating activities of $10.8 million for 2023 consisted of (i) net loss of $12.5 million and (ii) net non-cash income of $2.7 million, partially offset by net cash provided operating assets and liabilities of $4.4 million. Net cash used in operating activities of $11.7 million for 2022 consisted of (i) net loss of $14.0 million and (ii) net cash used by operating assets and liabilities of $1.2 million, partially offset by net non-cash expenses of $3.4 million.

Current wording

Net cash used in operating activities was $24.7 million for 2024 and consisted of net loss of $27.6 million, partially offset by net cash provided by change in operating assets and liabilities of $2.6 million and non-cash charges totaling $0.3 million, which was primarily related to stock-based compensation and change in fair value of warrant liabilities. Net cash used in operating activities was $10.8 million for 2023 and consisted of net loss of $12.5 million and non-cash credits totaling $2.8 million, which was primarily related to change in fair value of warrant liabilities, partially offset by net cash provided by changes in operating assets and liabilities of $4.4 million.

Previous wording

Net cash used in financing activities was $80 thousand, compared to net cash provided by financing activities of $28.7 million for 2022. Net cash used in financing activities for 2023 was related to payment of certain issuance costs related to the 2022 Public Offering. Net cash provided by financing activities for 2022 consisted of proceeds of $32.3 million from the issuance of common stock, preferred stock and warrants in connection with the 2022 Public Offering, partially offset by the payment of certain issuance costs of $3.6 million related to the 2022 Public Offering.

Current wording

Net cash provided by financing activities was $18.3 million for 2024 compared to net cash used in financing activities of less than $0.1 million for 2023. Net cash provided by financing activities for 2024 primarily consisted of gross proceeds from the Offering of $20.0 million, net of payment of issuance cost of $1.7 million. Net cash used in financing activities of less than $0.1 million for 2023 was attributable to payment of financing costs related to a prior financing transaction in 2022.

Previous wording

In August 2023, we entered into a non-cancelable operating lease for our new corporate headquarters in Cambridge, Massachusetts (the “Cambridge Headquarters Lease”). The initial lease term is for three years with an option to renew for an additional two-year term. The lease commenced in September 2023 and expires in August 2026. The following table sets forth our contractual obligations under our operating lease as of December 31, 2023:

Current wording

We entered into a non-cancelable operating lease for our corporate headquarters in Cambridge, Massachusetts. For additional information, see "Note 6. Commitments and contingencies" to the consolidated financial statements included in this Annual Report.

Previous wording

In the ordinary course of business, we enter into agreements with third parties that include indemnification provisions, which, in our judgment, are normal and customary for companies in our industry sector. These agreements are typically with business partners, clinical sites, and suppliers. Pursuant to these agreements, we generally agree to indemnify, hold harmless, and reimburse indemnified parties for losses suffered or incurred by the indemnified parties with respect to our products or product candidates, use of such products or product candidates, or other actions taken or omitted by us. The maximum potential amount of future payments we could be required to make under these indemnification provisions is sometimes unlimited. We have not

Current wording

In the ordinary course of business, we enter into agreements with third parties that include indemnification provisions, which, in our judgment, are normal and customary for companies in our industry sector. These agreements are typically with business partners, clinical sites, and suppliers. Pursuant to these agreements, we generally agree to indemnify, hold harmless, and reimburse indemnified parties for losses suffered or incurred by the indemnified parties with respect to our products or product candidates, use of such products or product candidates, or other actions taken or omitted by us. The maximum potential amount of future payments we could be required to make under these indemnification provisions is sometimes unlimited. We have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of liabilities relating to these provisions is minimal. Accordingly, we have no liabilities recorded for these provisions as of December 31, 2024 and 2023.

Previous wording

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses, and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. The most significant estimates in our consolidated financial statements relate to accrued expenses and the fair value of stock-based compensation and warrants. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known.

Current wording

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses, and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. The most significant estimates in our consolidated financial statements relate to clinical trial costs and accruals, classification of warrants as derivative liability or equity, and the fair value of stock-based compensation and warrants. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known.

Previous wording

Our critical accounting estimates and judgements relate to the following items: (i) clinical trial costs and accruals, (ii) fair value of stock-based compensation, (iii) fair value of warrants, and (iv) cash forecast for conclusion about NeuroBo’s ability to continue as a going concern. For information on our estimates and judgements used in clinical trial costs and accruals, fair value of stock-based compensation and fair value of warrants, see “J. Research and development costs” in “Note 1. Business, basis of presentation, new accounting standards and summary of significant accounting policies,” “Note 8. Stock-based compensation,” and “11. Fair value measurements,” respectively, to the consolidated financial statements included elsewhere in this Annual Report. Our cash forecast for the 12-month period from the filing date of this Annual Report utilize current cash balance less estimated payments for future clinical trials and G&A costs plus forecasted cash inflows

Current wording

Our critical accounting estimates and judgements relate to the following items: (i) cash forecast for conclusion about MetaVia’s ability to continue as a going concern, (ii) conclusion on the classification of warrants based on the underlying warrant and transaction agreements, and (iii) clinical trial costs and accruals. Our cash forecast for the 12-month period from the filing date of this Annual Report utilizes current cash balance less estimated payments for future clinical trials and G&A costs plus forecasted cash inflows. Our estimates and judgements used in clinical trial costs and accruals are described below.

Previous wording

Accrual for R&D costs related to clinical trial activities

Current wording

Accrual for research and development costs related to clinical trial activities

Previous wording

As part of the process of preparing our consolidated financial statements, we are required to record an accrual for R&D costs related to clinical trial activities. We recorded an accrual for external R&D costs of $3.8 million and $0.1 million as of December 31, 2023 and 2022, respectively. This process involves reviewing open contracts and purchase orders, communicating with applicable personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Certain of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some service providers require advance payments. We make estimates of our accrued and prepaid expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of these estimates with the service providers and make adjustments, if necessary. Examples of estimated accrued R&D expenses include fees paid to:

Current wording

As part of the process of preparing our consolidated financial statements, we are required to record an accrual for R&D costs related to clinical trial activities. This process involves reviewing open contracts and purchase orders, communicating with applicable personnel to identify services that have been performed on our behalf and estimating the level of service provided and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Certain of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some service providers require advance payments. We make estimates of our accrued and prepaid expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of these estimates with the service providers and make adjustments, if necessary. Examples of estimated accrued R&D expenses include fees paid to: