Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021March 31, 2022
or
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number
001-36697
 
 
DBV TECHNOLOGIES S.A.
(Exact name of registrant as specified in its charter)
 
 
 
France
  
Not applicable
State or other jurisdiction of
incorporation or organization
  
(I.R.S. Employer
Identification No.)
177-181
avenue Pierre Brossolette
Montrouge France
  
92120
(Address of principal executive offices)
  
(Zip Code)
Registrant’s telephone number, including area code +33 1 55 42 78 78
Securities registered pursuant to Section
 12(b) of the Act:
 
 
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
American Depositary Shares, each representing
one-half
of one ordinary share, nominal value €0.10 per share
 
DBVT
 
The Nasdaq Stock Market LLC
Ordinary shares, nominal value €0.10 per share*
 
n/a
 
The Nasdaq Stock Market LLC
 
*
Not for trading, but only in connection with the registration of the American Depositary Shares.
Securities registered pursuant to section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes
☒  Yes    ☐  No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes
☒  Yes    ☐  No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer ☐  Accelerated filer ☐
    
Non-accelerated filer ☒  Smaller reporting company ☒
    
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Act).    ☐  Yes    ☒  
No
As of October 26, 2021,April 29, 2022, the registrant had 55,011,687
 55,096,537 ordinary
shares, nominal value €0.10 per share, outstanding.outstanding including treasury shares
.
 
 
 
Table of Contents
Table of contents
 
  
Page 
Part I
 
Financial information
   41 
Item 1
 
Condensed Consolidated Statements of Financial Position (Unaudited) as of September 30, 2021March 31, 2022 and December 31, 20202021
   41 
 
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the Three and Nine Months Ended September 30,March 31, 2022 and 2021 and 2020
   52 
 
Condensed Consolidated Statements of Cash Flows (Unaudited) for the NineThree Months Ended September 30,March 31, 2022 and 2021 and 2020
   63 
 
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) for the NineThree Months Ended September 30,March 31, 2022 and 2021 and 2020
   74 
 
Notes to the Financial Statements (Unaudited)
  95 
Item 2
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
   2115 
Item 3
 
Quantitative and Qualitative Disclosures About Market Risk
   3120 
Item 4
 
Controls and Procedures
   3121 
Part II
 
Other informationInformation
   3222 
Item 1
 
Legal Proceedings
   3222 
Item 1A
 
Risk Factors
   3222 
Item 2
 
Unregistered Sales of Equity Securities and Use of Proceeds
   3222 
Item 3
 
Defaults Upon Senior Securities
   3222 
Item 4
 
Mine Safety Disclosures
   3222 
Item 5
 
Other Information
   3222 
Item 6
 
Exhibits
   3323 
Unless the context otherwise requires, we use the terms “DBV,” “DBV Technologies,” the “Company,” “we,” “us” and “our” in this Quarterly Report on
Form�� Form 10-Q
to refer to DBV Technologies S.A. and, where appropriate, its consolidated subsidiaries. “Viaskin
™
”,” “EPIT
™
” and our other registered and common law trade names, trademarks and service marks are the property of DBV Technologies S.A. or our subsidiaries. All other trademarks, trade names and service marks appearing in this Quarterly Report on Form
10-Q
prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Quarterly Report on Form
10-Q
may be referred to without the 
®
 and
™
symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.
Table of Contents
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS.
This Quarterly Report on Form
10-Q,
(“Form
10-Q”)
or Quarterly Report contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”).or the Exchange Act. These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or variations of these words or similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Any forward-looking statement involves known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statement. Forward-looking statements include statements, other than statements of historical fact, about, among other things:
 
the impact of the ongoing
COVID-19
pandemic, including the emergence of new variant strains of
COVID-19,
and its effects on our operations, research and development, clinical trials and ability to obtain financing and potential disruption in the operations and business of third-party manufacturers, contract research organizations, or CROs, other service providers and collaborators with whom we conduct business;
 
our ability to continue as a going concern;
our expectations regarding the timing or likelihood of regulatory filings and approvals, including with respect to our anticipated
re-submission
of a Biologics License Application, (“BLA”)or a BLA, for Viaskin
TM
Peanut to the U.S. Food and Drug Administration;Administration, or the FDA;
 
the initiation, timing, progress and results of our
pre-clinical
studies and clinical trials, and our research and development programs;
 
the sufficiency of existing capital resources;
 
our business model and our other strategic plans for our business, product candidates and technology;
 
our ability to manufacture clinical and commercial supplies of our product candidates and comply with regulatory requirements related to the manufacturing of our product candidates;
 
our ability to build our own sales and marketing capabilities, or seek collaborative partners, to commercialize Viaskin Peanut and/or our other product candidates, if approved;
 
the commercialization of our product candidates, if approved;
 
our expectations regarding the potential market size and the size of the patient populations for Viaskin Peanut and/or our other product candidates, if approved, and our ability to serve such markets;
 
the pricing and reimbursement of our product candidates, if approved;
 
the rate and degree of market acceptance of Viaskin Peanut and/or our other product candidates, if approved, by physicians, patients, third-party payors and others in the medical community;
 
our ability to advance product candidates into, and successfully complete, clinical trials;
 
the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;
 
estimates of our expenses, future revenues, capital requirements and our needs for additional financing;
 
the potential benefits of strategic collaboration agreements and our ability to enter into strategic arrangements;
 
our ability to maintain and establish collaborations or obtain additional grant funding;
 
our financial performance; and
developments relating to our competitors and our industry, including competing therapies; and
other risks and uncertainties, including those listed under the caption Risk Factors in our most recent Annual Report on Form
10-K“Risk Factors.”
and in any subsequent Quarterly Reports on Form
10-Q.
Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, on Form
10-Q,
these statements are based on our estimates or projections of the future that are subject to known and unknown risks and uncertainties and other important factors that may cause our actual results, level of activity, performance, experience or achievements to differ materially from those expressed or implied by any forward-looking statement. These risks, uncertainties and other factors are described in greater detail under the caption “Risk Factors” in Part I. Item 1A of our Annual Report on Form
10-K
for the year ended December 31, 2020,2021, filed with the Securities and Exchange Commission, (“SEC”)or the SEC, on March 17, 2021.9, 2022. As a result of the risks and uncertainties, the results or events indicated by the forward-looking statements may not occur. Undue reliance should not be placed on any
forward-looking
statement. We qualify all of our forward-looking statement.statements by these cautionary statements.
In addition, any forward-looking statement in this Quarterly Report, including statements that “we believe” and similar statements, reflect our beliefs and opinions on Form
10-Q
the relevant subject and represents our views only as of the date of this Quarterly Report on Form
10-Q
and should not be relied upon as representing our views as of any subsequent date. These statements are based upon information available to us as of the date of this Quarterly Report and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements. We anticipate that subsequent events and developments may cause our views to change. Although we may elect to update these forward-looking statements publicly at some point in the future, we specifically disclaim any obligation to do so, except as required by applicable law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
3
Table of Contents
Part I – Financial Information
Item 1. Financial Statements
DBV Technologies S.A.
Condensed Consolidated Statements of Financial Position (unaudited)
(amounts in thousands, except share and per share data)
 
     
September 30,
 
December 31,
      
March 31,
 
December 31,
 
  
Note
  
2021
 
2020
   
Note
  
2022
 
2021
 
Assets
                
Current assets:
                
Cash and cash equivalents
  
 
3
 $98,195  $196,352   
3
  $74,107  $77,301 
Trade receivables
      —     2,230 
Other current assets
       11,943   8,792   
4
   16,329  37,085 
     
 
  
 
      
 
  
 
 
Total current assets
     
 
110,138
 
 
 
207,375
 
     
 
90,437
 
 
 
114,386
 
Property, plant, and equipment, net
      19,273   24,792       17,196   18,146 
Right-of-use
assets related to operating leases
      7,876   10,104 
Right
of
use
assets related to operating leases
  
5
   3,356  7,336 
Intangible assets
      26   41       18   22 
Other non-current assets
      33,612   29,935       6,575   6,833 
     
 
  
 
      
 
  
 
 
Total non-current assets
     
 
60,786
 
 
 
64,871
 
     
 
27,144
 
 
 
32,338
 
     
 
  
 
      
 
  
 
 
Total Assets
     
$
170,924
 
 
$
272,246
 
     
$
117,581
 
 
$
146,723
 
     
 
  
 
      
 
  
 
 
Liabilities and shareholders’ equity
                
Current liabilities:
                
Trade payables
  
 
4
 $12,170  $20,338   
6
  $11,416  $11,429 
Short-term operating leases
      2,657   3,708   
5
   2,034  3,003 
Short-term financial debt
      695   724       333   510 
Current contingencies
  
 
7
  5,633   5,016   
8
   3,529  4,095 
Other current liabilities
  
 
4
  12,659   22,926   
6
   8,719  12,361 
     
 
  
 
      
 
  
 
 
Total current liabilities
     
 
33,814
 
 
 
52,713
 
     
 
26,031
 
 
 
31,397
 
     
 
  
 
      
 
  
 
 
Long-term operating leases
      8,298   10,496   
5
   2,268  7,147 
Long-term financial debt
      —     543 
Non-current contingencies
  
 
7
  7,629   2,527   
8
   5,758  6,758 
Other non-current liabilities
  
 
4
  4,292   475       1,461   2,147 
     
 
  
 
      
 
  
 
 
Total non-current liabilities
     
 
20,218
 
 
 
14,042
 
Total current liabilities
     
 
9,488
 
 
 
16,052
 
     
 
  
 
      
 
  
 
 
Total Liabilities
     
$
54,033
 
 
$
66,754
 
     
$
35,519
 
 
$
47,449
 
     
 
  
 
      
 
  
 
 
Shareholders’ equity:
                
Ordinary shares, €0.10 par value; 55,011,687 and 54,929,187 shares authorized, and issued as at September 30, 2021 and December 31, 2020, respectively, and 3,946,548 and 4,029,763 shares outstanding as at September 30, 2021 and December 31, 2020, respectively
     $6,529  $6,518 
Ordinary shares, €0.10 par value; 55,096,537 and 55,095,762
shares authorized, and issued as at March 31, 2022 and December 31, 2021, respectively
     $6,539  $6,538 
Additional paid-in capital
      359,081   1,152,042       359,478   358,115 
Treasury stock, 75,400 and 112,302 ordinary shares as of September 30, 2021 and December 31, 2020, respectively, at cost
      (810)   (1,169) 
Treasury stock, 144,501 and 153,631
ordinary shares as of March 31, 2022 and December 31, 2021, respectively, at cost
      (1,193)   (1,232) 
Accumulated deficit
      (244,856)   (958,543)       (275,219)   (258,528) 
Accumulated other comprehensive income
      474   484       543   519 
Accumulated currency translation effect
      (3,526)   6,158       (8,086)   (6,137) 
     
 
  
 
      
 
  
 
 
Total Shareholders’ equity
  
 
5
 
$
116,892
 
 
$
205,491
 
     
$
82,062
 
 
$
99,274
 
     
 
  
 
      
 
  
 
 
Total Liabilities and Shareholders’
E
quity
     
$
170,924
 
 
$
272,246
 
Total Liabilities and
s
hareholder’s equity
     
$
117,581
 
 
$
146,723
 
     
 
  
 
      
 
  
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
41
Table of Contents
DBV Technologies S.A.
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)
(amounts in thousands, except share and per share data)
 
      
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
       
Three months Ended

March 31,
 
  
Note
   
2021
 
2020
 
2021
 
2020
   
Note
   
2022
 
2021
 
Operating income
  
 
8
   
$
1,323
 
 
$
4,158
 
 
$
2,776
 
 
$
12,488
 
  
 
9
 
  
$
2,546
 
 
$
2,941
 
 
Operating expenses
                      
Research and development expenses
        (16,320)   (25,751)   (58,663)   (75,214)       (12,223)   (22,164) 
Sales and marketing expenses
        (1,072)   (1,595)   (2,999)   (8,114)       (464)   (729) 
General and administrative expenses
        (8,299)   (6,863)   (26,250)   (26,838)       (6,630)   (9,683) 
Restructuring expenses
        —     286   —     (21,003) 
       
 
  
 
  
 
  
 
      
 
  
 
 
Total Operating expenses
        (25,691)   (33,923)   (87,912)   (131,169)      
 
(19,317
) 
 
 
(32,575
) 
       
 
  
 
  
 
  
 
      
 
  
 
 
Loss from operations
       
 
(24,368
) 
 
 
(29,765
) 
 
 
(85,137
) 
 
 
(118,681
) 
     
 
(16,771
) 
 
 
(29,634
) 
       
 
  
 
  
 
  
 
      
 
  
 
 
Financial income (expense)
        336   (1,184)   597   (1,380) 
Financial income
      152   215 
       
 
  
 
  
 
  
 
      
 
  
 
 
Loss before taxes
       
 
(24,033
) 
 
 
(30,948
) 
 
 
(84,540
) 
 
 
(120,061
) 
     
 
(16,619
) 
 
 
(29,419
) 
       
 
  
 
  
 
  
 
      
 
  
 
 
Income tax
        —     (7)   404   (10)       (87)   (30) 
       
 
  
 
  
 
  
 
      
 
  
 
 
Net loss
       
$
(24,033
) 
 
$
(30,955
) 
 
$
(84,136
) 
 
$
(120,071
) 
     
$
(16,706)
 
 
$
(29,449)
 
       
 
  
 
  
 
  
 
      
 
  
 
 
Other comprehensive loss
              
Foreign currency translation differences, net of taxes
        (3,728)   13,196   (9,684)   13,495       (1,933)   (8,744) 
Actuarial gains (losses) on employee benefits, net of taxes
        28   (75)   (10)   (113) 
Actuarial gains (loss) on employee benefits, net of taxes
      24   (85) 
       
 
  
 
  
 
  
 
      
 
  
 
 
Comprehensive loss
       
$
(27,733
) 
 
$
(17,834
) 
 
$
(93,830
) 
 
$
(106,688
) 
Total comprehensive loss
     
$
(18,615
) 
 
$
(38,279
) 
       
 
  
 
  
 
  
 
      
 
  
 
 
Basic/diluted net loss per share attributable to shareholders
  
 
12
   
$
(0.44
) 
 
$
(0.56
) 
 
$
(1.53
) 
 
$
(2.23
) 
  
 
13
 
  
$
(0.30
) 
 
$
(0.54
) 
Weighted average shares outstanding used in computing per share amounts:
        54,947,354   54,843,843   54,911,278   53,852,176 
 
Weighted average number of shares outstanding used in computing per share amounts:
      54,932,192   54,880,776 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
52
Table of Contents
DBV Technologies S.A.
Condensed Consolidated Statements of Cash Flows (unaudited)
(amounts in thousands)
 
       
Nine Months Ended September 30,
 
   
Notes
   
2021
  
2020
 
Net loss for the period
       
$
(84,136
) 
 
$
(120,071
) 
Adjustments to reconcile net loss to net cash used in operating activities:
          
Depreciation, amortization and accrued contingencies
        9,705   18,360 
Retirement pension obligations
        127   (650) 
Expenses related to share-based payments
  
 
6
    4,078   (2,965) 
Other elements
        1,214   789 
Changes in operating assets and liabilities:
              
Decrease (increase) in inventories and work in progress
        —     2,292 
Decrease (increase) in trade receivables
        2,174   (1,974) 
Decrease (increase) in other current assets
        (9,036)   (9,591) 
(Decrease) increase in trade payables
        (7,135)   (6,760) 
(Decrease) increase in other current and
non-current
liabilities
        (5,497)   (11,372) 
Change in operating lease liabilities and right—of—use assets
        (946)   (136) 
Net cash flow used in operating activities
       
 
(89,452
) 
 
 
(132,076
) 
        
 
 
  
 
 
 
Cash flows provided by (used in) investing activities:
              
Acquisitions of property, plant, and equipment, net from proceeds
        46   (2,200) 
Acquisitions of intangible assets
        (8)   (20) 
Acquisitions of non-current financial assets
        3   (12) 
        
 
 
  
 
 
 
Net cash flows provided by (used in) investing activities       
 
41
 
 
 
(2,232
) 
        
 
 
  
 
 
 
Cash flows (used in) provided by financing activities:
              
(Decrease) increase in conditional advances
        (518)   (138) 
Treasury shares
        (359)   (766) 
Capital increases, net of transaction costs
        794   150,551 
Other cash flows related to financing activities
        (21)   (24) 
        
 
 
  
 
 
 
Net cash flows (used in) provided by financing activities
       
 
(103
) 
 
 
149,624
 
        
 
 
  
 
 
 
Effect of exchange rate changes on cash and cash equivalents
        (8,643)   12,834 
        
 
 
  
 
 
 
Net (decrease) increase in cash and cash equivalents
       
 
(98,157
) 
 
 
28,150
 
        
 
 
  
 
 
 
Net Cash and cash equivalents at the beginning of the period
        196,352   193,255 
        
 
 
  
 
 
 
Net cash and cash equivalents at the end of the period
  
 
3
   
$
98,195
 
 
$
221,404
 
        
 
 
  
 
 
 
      
Three months Ended March 31,
 
   
Notes
  
2022
  
2021
 
Net loss for the period
            
Adjustments to reconcile net loss to net cash used in operating activities:
     
$
(16,706
) 
 
$
(29,449
) 
Depreciation, amortization and accrued contingencies
      (599)   1,483 
Retirement pension obligations
      (9)   0   
Expenses related to share-based payments
      1,363   1,433 
Other elements
      (3)   (456) 
Changes in operating assets and liabilities:
            
Decrease (increase) in trade receivables
      0     2,101 
Decrease (increase) in other current assets
      20,458   (417) 
(Decrease) increase in trade payables
      (19)   (2,567) 
(Decrease) increase in other current and
non-current
liabilities
      (4,118)   (7,980) 
Change in operating lease liabilities and right of use assets
      (1,849)   (353) 
      
 
 
  
 
 
 
Net cash flow used in operating activities
     
 
(1,483
) 
 
 
(36,204
) 
      
 
 
  
 
 
 
Cash flows provided by (used in) investing activities:
            
Acquisitions of property, plant, and equipment
      (131)   (184) 
Proceeds from property, plant and equipment dispositions
      3   0   
Acquisitions of
non-current
financial assets
      (40)   (1) 
Proceeds from
non-current
financial assets
      179   0   
      
 
 
  
 
 
 
Net cash flows provided by (used in) investing activities
     
 
11
 
 
 
(185
) 
      
 
 
  
 
 
 
Cash flows (used in) provided by financing activities:
            
(Decrease) in conditional advances
      (168)   (164) 
Treasury shares
      40   578 
Capital increases, net of transaction costs
      0     42 
Other cash flows related to financing activities
      0     (17) 
      
 
 
  
 
 
 
Net cash flows (used in) provided by financing activities
     
 
(129
) 
 
 
440
 
      
 
 
  
 
 
 
Effect of exchange rate changes on cash and cash equivalents
      (1,594)   (7,944) 
      
 
 
  
 
 
 
Net decrease in cash and cash equivalents
     
 
(3,194
) 
 
 
(43,893
) 
      
 
 
  
 
 
 
Net cash and cash equivalents at the beginning of the period
      77,301   196,352 
      
 
 
  
 
 
 
Net cash and cash equivalents at the end of the period
  
3
  
$
74,107
 
 
$
152,459
 
      
 
 
  
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
6
3
Table of Contents
DBV Technologies S.A.
Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)
(amounts in thousands, except share and per share data)
 
  
Ordinary shares
                 
Ordinary shares
                 
  
Number of
Shares
   
Amount
   
Additional
paid-in
capital
 
Treasury
stock
 
Accumulated
deficit
 
Accumulated
other
comprehensive
income (loss)
 
Accumulated
currency
translation
effect
 
Total
Shareholders’
Equity
   
Number of

Shares
   
Amount
   
Additional

paid-in

capital
   
Treasury

stock
 
Accumulated

deficit
 
Accumulated

other

comprehensive

income (loss)
 
Accumulated

currency

translation

effect
 
Total

Shareholders’

Equity
 
Balance at January 1, 2020
  
 
47,028,510
 
  
$
5,645
 
  
$
1,003,595
 
 
$
(230
) 
 
$
(798,988
) 
 
$
108
 
 
$
(16,945
) 
 
$
193,186
 
Balance at January 1, 2021
  
 
54,929,187
 
  
$
6,518
 
  
$
1,152,042
 
  
$
(1,169
) 
 
$
(958,543
) 
 
$
484
 
 
$
6,158
 
 
$
205,491
 
Net (loss)
   —      —      —     —     (40,913)   —     —     (40,913)    —      —      —      —     (29,449)   —     —     (29,449) 
Other comprehensive income (loss)
   —      —      —     —     —     189   (6,064)   (5,875) 
Other comprehensive loss
   —      —      —      —     —     (85)   (8,744)   (8,829) 
Issuance of ordinary shares
   7,898,677    873    150,150   —     —     —     —     151,023    7,500    1    42    —     —     —     —     42 
Treasury shares
   —      —      —     (832)   —     —     —     (832)    —      —      —      488   —     —     —     488 
Share-based payments
   —      —      3,073     —     —     —     3,073    —      —      1,433    —     —     —     —     1,433 
  
 
   
 
   
 
  
 
  
 
  
 
  
 
  
 
   
 
   
 
   
 
   
 
  
 
  
 
  
 
  
 
 
Balance at March 31, 2020
  
 
54,927,187
 
  
$
6,518
 
  
$
1,156,818
 
 
$
(1,062
) 
 
$
(839,901
) 
 
$
297
 
 
$
(23,009
) 
 
$
299,662
 
Net (loss)
   —      —      —     —     (48,203)   —     —     (48,203) 
Other comprehensive income (loss)
   —      —      —     —     —     (227)
 
 		  6,363   6,136 
Treasury shares
   —      —      —     107   —     —     —     107 
Share-based payments
   —      —      (5,964)   —     —     —     —     (5,964) 
  
 
   
 
   
 
  
 
  
 
  
 
  
 
  
 
 
Balance at June 30, 2020
  
 
54,927,187
 
  
$
6,518
 
  
$
1,150,855
 
 
$
(955
) 
 
$
(888,103
) 
 
$
70
 
 
$
(16,646
) 
 
$
251,739
 
Net (loss)
   —      —      —     —     (30,955)   —     —     (30,955) 
Other comprehensive income (loss)
   —      —      —     —     —     (75)   13,196   13,121 
Issuance of ordinary shares
   —      —      (472)   —     —     —     —     (472) 
Treasury shares
   —      —      —     (260)   —     —     —     (260)
Share-based payments
   —      —      (74)   —     —     —     —     (74) 
  
 
   
 
   
 
  
 
  
 
  
 
  
 
  
 
 
Balance at September 30, 2020
  
 
54,927,187
 
  
$
6,518
 
  
$
1,150,309
 
 
$
(1,214
) 
 
$
(919,058
) 
 
$
(5
) 
$
(3,450
) 
 
$
233,099
 
Balance at March 31, 2021
  
 
54,936,687
 
  
$
6,519
 
  
$
1,153,516
 
  
$
(681
) 
 
$
(987,992
) 
 
$
399
 
 
$
(2,586
) 
 
$
169,176
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
Table of Contents
DBV Technologies S.A.
Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited) (continued)
(amounts in thousands, except share and per share data)
 
  
Ordinary shares
                 
Ordinary shares
                 
  
Number of
Shares
   
Amount
   
Additional
paid-in
capital
 
Treasury
stock
 
Accumulated
deficit
 
Accumulated
other
comprehensive
income (loss)
 
Accumulated
currency
translation
effect
 
Total
Shareholders’
Equity
   
Number of

Shares
   
Amount
   
Additional

paid-in

capital
   
Treasury

stock
 
Accumulated

deficit
 
Accumulated

other

comprehensive

income (loss)
 
Accumulated

currency

translation

effect
 
Total

Shareholders’

Equity
 
                      
Balance at January 1, 2021
  
 
54,929,187
 
  
$
6,518
 
  
$
1,152,042
 
 
$
(1,169
) 
 
$
(958,543
) 
 
$
484
 
 
$
6,158
 
 
$
205,491
 
Balance at January 1, 2022
  
 
55,095,762
 
  
$
6,538
 
  
$
358,115
 
  
$
(1,232
) 
 
$
(258,528
) 
 
$
519
 
 
$
(6,137
) 
 
$
99,274
 
Net (loss)
   —      —      —     —     (29,449)   —     —     (29,449)    —      —      —      —     (16,706)   —     —     (16,706) 
Other comprehensive loss
   —      —      —     —     —     (85)   (8,744)   (8,829)    —      —      —      —     —     24   (1,933)   (1,909) 
Issuance of ordinary shares
   7,500    1    42   —     —     —     —     42    775    1    0      —     —     —     —     1 
Treasury shares
   —      —      —     488   —     —     —     488    —      —      —      40   —     —     —     40 
Share-based payments
   —      —      1,433   —     —     —     —     1,433    —      —      1,363    —     —     —     —     1,363 
Other changes
   —      —      —      —     15     (15)   —   
  
 
   
 
   
 
  
 
  
 
  
 
  
 
  
 
   
 
   
 
   
 
   
 
  
 
  
 
  
 
  
 
 
Balance at March 31, 2021
  
 
54,936,687
 
  
$
6,519
 
  
$
1,153,516
 
 
$
(681
) 
 
$
(987,992
) 
 
$
399
 
 
$
(2,586
) 
 
$
169,176
 
Net (loss)
   —      —      —     —     (30,654)   —     —     (30,654) 
Other comprehensive income
   —      —      —     0     —     48   2,788   2,836 
Issuance of ordinary shares
   75,000    9    464   —     —     —     —     473 
Issuance of warrants
   —      —      279   —     —     —     —     279 
Treasury shares
   —      —      —     (185)   —     —     —     (185) 
Share-based payments
   —      —      1,094   —     —     —     —     1,094 
Allocation of accumulated net losses
   —      —      (797,823)   —     797,823   —     —     —   
  
 
   
 
   
 
  
 
  
 
  
 
  
 
  
 
 
Balance at June 30, 2021
  
 
55,011,687
 
  
$
6,529
 
  
$
357,530
 
 
$
(866
) 
 
$
(220,823
) 
 
$
446
 
 
$
203
 
 
$
143,019
 
Net (loss)
   —      —      —     —     (24,033)   —     —     (24,033) 
Other comprehensive income (loss)
   —      —      —     —     —     28   (3,728)   (3,701) 
Treasury shares
   —      —      —     56   —     —     —     56 
Share-based payments
   —      —      1,551   —     —     —     —     1,551 
Balance at September 30, 2021
  
 
55,011,687
 
  
$
6,529
 
  
$
359,081
 
 
$
(810
) 
 
$
(244,856
) 
 
$
474
 
 
$
(3,526
) 
 
$
116,892
 
Balance at March 31, 2022
  
 
55,096,537
 
  
$
6,539
 
  
   $
359,478
 
  
$
(1,193
) 
 
$
(275,219
) 
 
$
543
  
 
$
(8,086
) 
 
$
82,062
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
84
Table of Contents
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
Note 1: The Company
Incorporated in 2002 under the laws of France, DBV Technologies S.A. (“DBV Technologies,” or the “Company”, or the “group”) is a
clinical-stage
specialty biopharmaceutical company focused on changing the field of immunotherapy by developing a novel technology platform called Viaskin
™
. The Company’s therapeutic approach is based on epicutaneous immunotherapy, or EPIT
™
, a proprietary method of delivering biologically active compounds to the immune system through intact skin using Viaskin
™
.
Basis of Presentation
The condensed consolidated financial statements of the Company and its
wholly-owned
subsidiaries are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and are presented in U.S. dollars. The amounts are presented in thousands unlessof U.S. Dollars, except for share and per share data and as otherwise indicated.noted. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated on consolidation.
The unaudited condensed consolidated financial statements presented in this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form
10-K
filed with the SEC on March 17, 20219, 2022 (the “Annual Report”). The condensed consolidated statement of financial position at December 31, 20202021 was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. The Company’s critical accounting policies are detailed in the Annual Report. The Company’s critical accounting policies have not changed materially since December 31, 2020.2021.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. However, these condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period. These interim financial results are not necessarily indicative of results to be expected for the full fiscal year ending December 31, 2021,2022, or any other future period.
Use of estimates
The preparation of the Company’s condensed consolidated financial statements requires the use of estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of income and expenses during the period. The Company bases its estimates and assumptions on historical experience and other factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. The actual results may differ from these estimates.
On an
on-going
basis, management evaluates it
s
its estimates, primarily those related to: (1) evaluation of costs and measure of progress of the development activities conducted as part of the collaboration agreement with Nestlé Health Science, (2) research tax credits, (3) assumptions used in the valuation of right-of-use assets—right of use assets - operating lease, (4) impairment of
right-of-useright
of
use
assets related to leases and property, plant and equipment, (5) recoverability of the Company’s net deferred tax assets and related valuation allowance, (6) assumptions used in the valuation model to determine the fair value and vesting conditions of share-based compensation plan and, (7) estimate of contingencies.
Going concern
These condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company’s ability to continue as a going concern exists.
Since its inception, the Company has primarily funded its operations with equity financings, and, to a lesser extent, public assistance aimed at supporting innovation and payments associated with research tax credits (
(
Crédit d’Impôt Recherche
).
The Company does not generate product revenue and continues to prepare for the potential launch of its first product in the United States and in the European Union, if approved.
Following receipt of a Complete Response Letter (“CRL”) from the U.S. Food and Drug Administration (“FDA”) in connection with its BLABiologics License Application (“BLA”) for Viaskin
™
Peanut, beginning in August 2020, the Company scaled down its other clinical programs and
pre-clinical
spend to focus on Viaskin
™
Peanut. TheIn response, the Company also initiatedimplemented a global restructuring plan in June 2020 to provide operational latitude to progress the clinical development and regulatory review of Viaskin
™
Peanut in the United States and European Union. This restructuring plan was completed in the second half of 2021.
Based onIn January 2021, the Company’s plansCompany received written responses from the FDA to addressquestions provided in the guidanceType A meeting request the Company submitted in October 2020 following the CRL. In order to respond to the FDA’s requests and recommendations, the Company defined parallel workstreams primarily in order to generate the
6-month
safety and adhesion clinical data to assess a modified Viaskin Peanut patch and demonstrate the equivalence in allergen uptake between the current and modified patches in the intended patient population.
Following the submission of the adhesion study’s protocol to the FDA, the Company received an Advice/Information Request letter from the FDA in January 2021 and additional feedback received in October 2021, regardingrequesting a stepwise approach to the modified Viaskin patch development program and provided partial feedback on this protocol. In December 2021, the Company decided not to pursue the stepwise approach to the development plans for Viaskin Peanut as requested by the FDA in the October 2021 feedback and announced its plan to initiate a pivotal Phase 3 clinical study for a modified Viaskin Peanut patch (mVP) in children ages 4-11. The Company considers this trial as the most straightforward approach to demonstrate effectiveness, safety, and improved adhesion of the modified Viaskin Peanut system. After receiving agreement from the FDA for its change in strategy, the protocol for STAMP (Safety, Tolerability and Adhesion of Modified Patches), and its expected cost savings from implementationthe new Phase 3 pivotal study of the global restructuring plan,modified Viaskin Peanut (“mVP”) patch was completed at the Company expects that its balanceend of cash February 2022 
and cash equivalents ofwas submitted to the FDA in April 2022.
The
$98.2 C
ompany has been granted a Type C meeting by the FDA
million as of September 30, 2021 will, which is expected to be sufficient to fund its operations intoheld
in the thirdsecond quarter of 2022.2022
,
to align on the new Phase
3
study protocol.
The Company has incurred operating losses and negative cash flows from operations since inception. As of the date of the filing, the Company’s available cash isand cash equivalents are not projected to be sufficient to support its operating plan for at least the next 12 months. As such, there is substantial doubt regarding the Company’s ability to continue as a going concern.
5
Based on its current operations, as well as its plans and assumptions as revised pursuant to its change of strategy, announced in December 2021, the Company expects that its balance of cash and cash equivalents of $74.1 million as of March 31, 2022 will be sufficient to fund its operations into the first quarter of 2023.
The Company intends to seek additional capital as it prepares for the new pivotal study and launch of Viaskin Peanut, if approved, and continues other research and development efforts. The Company may seek to finance its future cash needs through a combination of public or private equity or debt financings, collaborations, license and development agreements and other forms of
non-dilutive
financings.
9
Table of Contents
The Company cannot guarantee that it will be able to obtain the necessary financing to meet its needs or to obtain funds at attractive terms and conditions, including as a result of disruptions to the global financial markets due to the ongoing
COVID-19
pandemic.conditions. The ongoing
COVID-19
pandemic has already caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to the Company, including reduced ability to raise additional capital when needed or on acceptable terms, if at all.
If the Company is not successful in its financing objectives, the Company could have to scale back its operations, notably by delaying or reducing the scope of its research and development efforts or obtain financing through arrangements with collaborators or others that may require the Company to relinquish rights to its product candidates that the Company might otherwise seek to develop or commercialize independently.
These interim financial statements have been prepared assumingConsolidated Financial Statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company’s abilitywere unable to continue as a going concern exists.
Accounting Pronouncements adopted in 20212022
Effective January 1, 2021, the
The Company adopted ASU
2019-12, Incomehas
Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which is intended not adopt any new accounting pronouncements in 2022
to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. The adoption of ASU
2019-12date.
did not have a material impact on the Company’s financial position or results of operations.
Accounting Pronouncements issued not yet adopted
In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU
2016-13— 2016-13 - Financial
Instruments— Instruments - Credit losses, which replaces the incurred loss impairment methodology for financial instruments in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The FASB has issued ASU
2019-10
which has resulted in the postponement of the effective date of the new guidance for eligible smaller reporting companies to the fiscal year beginning January 1, 2023. The guidance must be adopted using a modified-retrospective approach and a prospective transition approach is required for debt securities for which an
other-than-temporary
impairment had been recognized before the effective date. The Company is currently evaluating the impact of the guidance on its Consolidated Financial Statements. The Company does not expect this new standard will have a material impact on its consolidated financial statements.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s Consolidated Financial Statements upon adoption.
Note 2: Significant Events and Transactions
Clinical programs
Viaskin
TM
Peanut for children ages
4-11
in the - United States Regulatory History and Current Status
In January 2020, the Company announced positive topline results of the three-year, open-label extension of its Phase III PEPITES
trial (the “PEOPLE trial”) evaluating the long-term efficacy and safety of investigational Viaskin Peanut in peanut-allergic children ages 4 to 11 years. The results demonstrated long-term clinical benefit as shown by an increase in eliciting dose (“ED”), which may decrease the chance of reacting to an accidental peanut exposure. After three years, the Company observed
that 75.9% (107/141) of patients had increased their ED from baseline, and 51.8% (73/141) of patients reached an ED of at least 1,000 mg peanut protein by year three. The safety profile of Viaskin Peanut was consistent with that observed in the clinical program to date in over 1,000 patients. During the PEOPLE trial, the most common adverse events were mild to moderate skin reactions localized to the administration site, and there was no epinephrine use deemed related to treatment. No treatment related serious adverse events were reported. One patient experienced one case of mild anaphylaxis that was determined by the investigator to be possibly related to treatment and resolved without anti-anaphylactic treatment. Treatment compliance remained high throughout the study at a mean of 98% over three years of treatment. Low discontinuations due to adverse events were observed.
In February 2020, the FDA announced an Allergenic Products Advisory Committee meeting to be held on May 15, 2020 to discuss the BLA for Viaskin Peanut. On March 16, 2020, the Company announced that the FDA had informed the Company that during its ongoing review of the Company’s BLA for Viaskin Peanut, it had identified questions regarding efficacy, including the impact of patch-site adhesion. Therefore, the Advisory Committee meeting to discuss the BLA originally scheduled on May 15, 2020 was cancelled.
10
Table of Contents
In August 2020, the Company announced that the FDA has issued a Complete Response Letter (“CRL”) in which the FDA indicated it could not approve the Viaskin Peanut BLA in its current form. The FDA identified concerns regarding the impact of patch-site adhesion on efficacy and indicated the need for patch modifications, and subsequently a new human factor study. The FDA also indicated that supplementary clinical data would need to be generated to support the modified patch. In addition, the FDA requested additional Chemistry, Manufacturing and Controls (“CMC”) data. The FDA did not raise any safety concerns related to Viaskin Peanut.
In January 2021,
the Company received written responses from the FDA to questions provided in the Type A meeting request the Company submitted in October 2020 following the CRL. In exchanges with the FDA, the Company proposed potential resolutions to two main concerns identified by the FDA in the CRL: the impact of patch adhesion and the need for patch modifications. The FDA agreed with the Company’sits position that a modified Viaskin Peanut patch should not be considered as a new product entity provided the occlusion chamber of the current Viaskin Peanut patch and the peanut protein dose of 250 µg (approximately
µg
(approximately 1/1000 of one peanut) remains unchanged and performs in the same way it has performed previously. In order to confirm the consistency of efficacy data between the existing and a modified patches, thepatch, FDA has requested an assessment comparing the uptake of allergen (peanut protein) between the patches in peanut allergic children ages 4 to 11 years.
4-11.
The Company named that assessment EQUAL, which stands for Equivalence in Uptake of ALlergen. The FDA also recommended conducting a
6-month,
well-controlled safety and adhesion trial to assess thea modified Viaskin Peanut patch in the intended patient population. The Company later named this study STAMP, which stands for Safety, Tolerability, and Adhesion of Modified Patches
Based on the January 2021 FDA feedback, the Company defined three parallel workstreams:
1. Identify a modified Viaskin patch (which the Company calls mVP).
6
2. Generate the
6-month
safety and adhesion clinical data FDA requested via STAMP, which the Company expected to be the longest component of the mVP clinical plan. The Company prioritized the STAMP protocol submission so the Company could begin the study as soon as possible.
3. Demonstrate the equivalence in allergen uptake between the current and modified patches in the intended patient population via EQUAL. The complexity of EQUAL hinged on the lack of established clinical and regulatory criteria to characterize allergen uptake via an epicutaneous patch. To support those exchanges, the Company outlined its proposed approach to demonstrate allergen uptake equivalence between the two patches, and allotted time to generate informative data through two additional studies:
a.
PREQUAL, a Phase I study with adult healthy volunteers to optimize the allergen sample collection methodologies and validate the assays we intend to use in EQUAL
b.
‘EQUAL in adults’—a second Phase I study with adult healthy volunteers to compare the allergen uptake of cVP and Mvp;
In the second quarter ofMarch 2021, the Company completedcommenced CHAMP (Comparison of adHesion Among Modified Patches), a trial in healthy adult volunteers to evaluate the adhesion of five modified Viaskin Peanut patches, in order to identify the top performers.one or two best-performing patches, which the Company completed in the second quarter of 2021. Based on the adhesion parameters studied, the Company was pleasedselected the modified patch to learn that alladvance to further clinical testing in the intended patient population. All modified Viaskin Peanut patches demonstrated better adhesion performance as compared to the currentthen-current Viaskin Peanut patch. Thepatch, and the Company then selected two modified patches that performed best out of the five modified patches studied for further development.
The difference betweenCompany then selected the two selected patchescircular patch for further development, which is their shape—one is circular and the other is rectangular with rounded corners. They are both approximately 50% larger thanin size relative to the current patch but maintain the same structure of the occlusion chamber (i.e., foam ring and backing). The Company also conducted advisory boards with patient caregivers and key opinion leaders to obtain qualitative feedback on the consumer experience with both patches.circular in shape.
I
n the second quarter ofIn May 2021, the Company initiated PREQUAL, a Phase 1 study in healthy adult volunteers to optimize the allergen sample collection methodologies and validate the assays DBV intends to use in EQUAL (EQuivalence in Uptake of ALergen) to demonstrate the protein uptake comparability of the modified patch (mVP) to the reference or current patch (cVP).
The Company submitted theits proposed STAMP protocol for STAMP, the
6-month
adhesion and safety study of the modified patch, to the FDA, on May 6,and
in
October 2021, andthe Company received feedbackan Advice/Information Request letter from the FDA. In this letter, the FDA on October 14, 2021. The FDA has requested a stepwise approach to DBV’sthe modified Viaskin patch development program and provided partial feedback on the STAMP protocol. Specifically, the FDA requested that the Company conduct allergen uptake comparison studies (i.e., ‘EQUAL in Adults’, EQUAL), and submit the allergen uptake comparison data for FDA review and feedback prior to starting the STAMP study. The FDA’s explanation was that the results from the allergen uptake studies might affect the design of the STAMP study.
After careful review of the FDA’s information requests and consideration of all other options, in December 2021, the Company decided not to pursue the stepwise approach to the development plans for Viaskin Peanut as requested by the FDA in the October 2021 feedback. The Company estimated that the FDA’s newly proposed sequential approach would require at least five rounds of exchanges that necessitate FDA alignment prior to initiating STAMP, the
6-month
safety and adhesion study. The Company does not believe this approach to be in the best interest of patients due to the significant time delays associated with FDA review of a resource dependent
(non-PDUFA)
product. As such, in December 2021, the Company announced it plans to initiate a pivotal Phase
3
—placebo-controlled efficacy trial for a modified Viaskin Peanut patch (mVP) development program.in children ages 4-11. The study will also include updates to the Instructions for Use (IFU). The Company considers this trial the most straightforward to demonstrate effectiveness, safety, and improved adhesion of the modified Viaskin Peanut system. The FDA would likehas confirmed the Company’s change in strategy is agreeable via oral and written exchanges. The protocol for the new Phase 3 pivotal study of the modified Viaskin Peanut (“mVP”) patch was completed at the end of February 2022
 and was submitted to review the data from DBV’s protein uptake release study priorFDA in April 2022. The Company
has been granted a Type C meeting by the FDA in the second quarter of 2022 to providing additional commentsalign on the STAMP protocol design. Inew Phase
3
n its communication, the FDA st
ated that guidance is forthcoming on how best to demonstrate the protein uptake comparability of the mVP to the reference or current patch (cVP). The STAMP trial will not be initiated until DBV receives complete feedback from the FDA.study protocol.
Viaskin
TM
Peanut for children ages
4-11
in Europe - European Union Regulatory History and Current Status
In November 2020,August 2021, the Company announced that its Marketing Authorization Application (“MAA”) for Viaskin Peanut had been validated by the European Medicines Agency (“EMA”). The validation of the MAA confirmed that the submission was sufficiently complete to begin the formal review process for Viaskin Peanut to treat peanut allergies in children
ages 4 to 11
years. The Company received the first set of questions from the EMA, during the first quarter of 2021, which were consistent with the Company’s expectations and prefiling conversations with the EMA. The Company did not receive questions about the impact of adhesion on efficacy. The EMA’s Committee for Medicinal Products for Human Use will provide a recommendation to the European Commission (“EC”) on whether to grant a marketing authorization when its review of the Viaskin Peanut MAA is complete.
In July 2021, the Companyit has received from the EMA athe Day 180 list of outstanding issues. The reviewissues, which is an established part of the Viaskin Peanut MAAprescribed EMA review process. It is progressing accordinga letter that is meant to establishedinclude any remaining questions or objections at that stage in the process. The EMA processesindicated many of their objections and ongoing conversations withmajor objections from the EMA. ManyDay 120 list of EMA’s Objections and Major Objections havequestions had been answered; oneanswered. One major objection remained at Day 180. The Major Objection remained.
DBV is preparing its responses to the Day 180 letter and evaluating how to best address the Objections, including the remaining Major Objection which questionsquestioned the limitations of the data, for example, the clinical relevance and effect size supported by a single pivotal study. Further exchanges with EMA are anticipated. DBV estimates
In December 2021, the Company announced it has withdrawn the Marketing Authorization Application for Viaskin Peanut and formally notified the EMA could issue itsof our decision. The initial filing was supported by positive data from a single, placebo-controlled Phase 3 pivotal trial known as PEPITES
(V712-301).
The decision to withdraw was based on potential marketing authorizationthe view of EMA Committee for Medicinal Products for Human Use (CHMP) that the data available to date from a single pivotal study were not sufficient to preclude a Major Objection at Day 180 in the review cycle. The Company believes data from a second Viaskin Peanut pivotal study will support a more robust path for licensure of Viaskin Peanut in the first quarter of 2022.EU. The Company intends to resubmit the MAA when that data set is available.
11
Table of Contents
Viaskin Peanut for children ages
1-3
I
nOn June 26, 2020, the Company announced that in Part A, patients in both treatment arms showed consistent treatment effects after 12 months of therapy, as assessed by a double-blind placebo-controlled food challenge and biomarker results. Part A subjects were not included in Part B and the efficacy analyses from Part A were not statistically powered to demonstrate superiority of either dose versus placebo. These results validate the ongoing investigation of the 250 µgPg dose in this age group, which is the dose being studied in Part B of the study. Enrollment for Part B of EPITOPE was completed in the first quarter of 2022021 and
top-line
1.
Financing
In February 2020,
results are expected by the Company announced the closing of an underwritten global offering of an aggregate of 7,500,000 ordinary shares in (i) a public offering of 4,535,581 ordinary shares in the form of 9,071,162 American Depositary Shares (“ADSs”) in the United States, Canada and certain countries outside Europe at a public offering price of $10.25 per ADS (on the basis of an exchange rate of $1.0999 = €1.00), and (ii) an offering exclusively addressed to qualified investors in Europe (including France) of 2,964,419 ordinary shares at an offering price of €18.63 per ordinary share (together, the “Global Offering”).
In March 2020,
the Company announced that the underwriters partially exercised their option to purchase 338,687 additional ordinary shares in the form of 677,374 ADSs at an offering price of $10.25 per ADS, before deducting commissions and estimated offering expenses (the “Option”). The Option closed on March 4, 2020.
Consequently, following partial exerciseend of the Option, the total numbersecond quarter of ordinary shares sold in the global offering was 7,838,687 ordinary shares, including 4,874,268 ordinary shares in the form of 9,748,536 ADSs, bringing the total gross proceeds from the global offering to $160.7 million and net proceeds of $150.0 million.
Restructuring
The Company initiated a global restructuring plan in June 2020 to provide operational latitude to progress in the clinical development and regulatory review of investigational Viaskin Peanut in the United States and European Union. The Company expects full implementation of the organization-wide costs reduction measures to be completed in the second half of 2021.
The following table summarizes restructuring activities as of September 30, 2021 included in current contingencies and other current liabilities in the statement of financial position:2022.
 
7
Restructuring
liabilities
Restructuring liability—January 1, 2021
9,387
Amounts paid
(7,024) 
Other effect including currency translation effect
(238) 
Restructuring liability – September 30, 2021
2,125
of which current contingencies
950
of which other current liabilities
1,175
COVID-19
Pandemic
On March 11, 2020, the World Health Organization declared
COVID-19
a pandemic. This global health crisis led many countries to impose national containment measures and travel bans. In view of this exceptional situation, the Company decided to take all measures aimed primarily at guaranteeing the safety of its employees and the continuation of ongoing clinical trials, in compliance with the directives of the authorities in each country. The Company has experienced a decrease in new patients enrolling in the ongoing clinical studies and it has had to adapt the protocols of its clinical trials because patients remain subject to travel restrictions.
The Company has assessed the impact of the uncertainties created by the pandemic, such as the duration of the outbreak, the efficacy of vaccines and the evolution of variations strains of
COVID-19,
travel restrictions, social distancing requirements and business restrictions in the United States, France and other countries.pandemic. As of September 30, 2021,March 31, 2022, those uncertainties were taken into account in the assumptions underlying the estimates and judgments used by the Company. The Company continues to update these estimates and assumptions as the situation evolves. The effects of the
COVID-19
pandemic are presented in the relevant line items of the condensed consolidated statement of financial position and the condensed consolidated statement of operations and comprehensive loss according to the function or nature of the income or expense.
1
2
Table of Contents
Legal Proceedings
A class action complaint was filed on January 15, 2019 in the United States District Court for the District of New Jersey, entitled Travis
Ito-Stone
v. DBV Technologies, et al., Case No.
2:19-cv-00525.
The complaint as amended, alleged that the Company and its former Chief Executive Officer, its current Chief Executive Officer, and its former Deputy Chief Executive Officer and its former Chief Business officer violated certain federal securities laws, specifically under Sections 10(b) and 20(a) of the Exchange Act, and Rule
10b-5
promulgated thereunder. The plaintiffs seek unspecified damages on behalf of a purported class of persons that purchasedpurchasers of the Company’s securities between February 14, 2018 and August 4, 2020 and also held the Company’s securities on December 20, 2018 and/or March 16, 2020 and/or August 4, 2020.
A hearing was held on July 29, 2021 in the U.S. District Court for the District of New Jersey where the Court entered an order granting the Company’s Motion to Dismiss the Second Amended Class Action Complaint without prejudice. As the dismissal was without prejudice, the Plaintiffs repledreplead their case by filing a Third Amended Class Action Complaint on September 30, 2021 in the same Court. The company moved to dismiss third amended complaint on December 10, 2021.
The Company believes that the allegations contained in the amended complaint are without merit and will continue to defend the case vigorously. The Company believes this complaint will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.
Note 3:3 Cash and Cash Equivalents
The following tables summarizetable presents for each reported period, the breakdown of cash and cash equivalents as of September 30, 2021 and December 31, 2020:equivalents:
 
  
September 30,
   
December 31,
   
March 31,
   
December 31,
 
  
2021
   
2020
   
2022
   
2021
 
Cash
   33,928    42,341    29,145    31,427 
Cash equivalents
   64,267    154,011    44,963    45,874 
  
 
   
 
   
 
   
 
 
Total cash and cash equivalents as reported in the statements of financial position
  
 
98,195
 
  
 
196,352
 
  
 
74,107
 
  
 
77,301
 
  
 
   
 
   
 
   
 
 
Bank overdrafts
   0      0   
  
 
   
 
 
Total net cash and cash equivalents as reported in the statements of cash flows
  
 
74,107
 
  
 
77,301
 
  
 
   
 
 
Cash equivalents are immediately convertible into cash at no or insignificant cost, on demand. They are measured using level 1 fair value measurements.
8
Note 4 Other Current Assets
Other current assets consisted of the following:
   
March 31,
   
December 31,
 
   
2022
   
2021
 
Research tax credit
   8,430    28,092 
Other tax claims
   3,696    3,561 
Prepaid expenses
   3,386    4,149 
Other receivables
   817    1,283 
   
 
 
   
 
 
 
Total
  
 
16,329
 
  
 
37,085
 
   
 
 
   
 
 
 
Research tax credit
In the fiscal year ended December 31, 2021, the Company recovered its Small and
Medium-sized
Enterprises, or SMEs, status under EU law, and became therefore eligible again for the immediate reimbursement of the Research Tax Credit.
During the three months period ended March 31, 2022, the Company received the reimbursement of the 2019 and 2020 fiscal year research tax credit.
The variance in Research Tax Credit is presented as follow:
Amount in

thousands of US

Dollars
Opening research tax credit receivable as of January 1, 2022
28,092
+ Operating revenue
1,569
- Payment received
(20,874) 
- Adjustment and currency translation effect(358) 
Closing research tax credit receivable as of March 31, 2022
8,430
Of which -
Non-current
portion
0  
Of which - Current portion
8,430
The other tax claims are primarily related to the VAT as well as the reimbursement of VAT that has been requested. Prepaid expenses are comprised primarily of rental and insurance expenses, as well as legal and scientific consulting fees. Prepaid expenses also include upfront payments which are recognized over the term of the ongoing clinical studies.
9
Note 5 Lease contracts
Future minimum lease payments under the Company’s operating leases’ right of use as of March 31, 2022 and December 31, 2021, are as follows:
   
March 31, 2022
  
December 31, 2021
 
   
Real estate
  
Other

assets
  
Total
  
Real estate
  
Other

assets
  
Total
 
Current portion
   2,159   66   2,225   3,361   77   3,438 
Year 2
   1,803   18   1,821   3,124   23   3,147 
Year 3
   605   15   620   2,299   18   2,317 
Year 4
   —     —     —     771   1   773 
Year 5
   —     —     —     790   —     790 
Thereafter
   —     —     —     1,220   —     1,220 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total minimum lease payments
  
 
4,567
 
 
 
99
 
 
 
4,666
 
 
 
11,565
 
 
 
119
 
 
 
11,684
 
Less: Effects of discounting
   (358)   (7)   (365)   (1,526)   (8)   (1,534) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Present value of operating lease
  
 
4,209
 
 
 
92
 
 
 
4,302
 
 
 
10,039
 
 
 
111
 
 
 
10,150
 
Less: current portion
   (1,973)   (61)   (2,034)   (2,929)   (74)   (3,003) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Long-term operating lease
  
 
2,236
 
 
 
31
 
 
 
2,268
 
 
 
7,110
 
 
 
37
 
 
 
7,147
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average remaining lease term (years)
   2.21   1.87       4.14   2.01     
Weighted average discount rate
   3.51%   3.32%       4.84%   3.32%     
The Company recognizes rent expense, calculated as the remaining cost of the lease allocated over the remaining lease term on a straight-line basis.
Rent expense presented in the consolidated statement of operations and comprehensive loss was:
   
March 31,
 
   
2022
   
2021
 
Operating lease expense / (income)
   (1,150)    847 
In January 2022, the company entered into a termination agreement for its U.S. office in Summit, NJ, following the resizing of its facility use. The Company recognized an income
of $1.2 
million
as of March 31, 2022 due to the early termination of its Summit, NJ lease, offset by the payment of a one-time lump sum early termination fee of $1.5 million. 
Supplemental cash flow information related to operating leases is as follows for the period March 31, 2022 and 2021:
   
March 31,
 
   
2022
   
2021
 
Cash paid for amounts included in the measurement of lease liabilities
          
Operating cash flows from operating leases
   583    1,025 
Note 4:6 Trade Payables and Other Current Liabilities
4.16.1 Trade Payables
No discounting was performed on the trade payables to the extent that the amounts did not present payment terms longer than one year at the end of each fiscal period presented.
4.210
6.2 Other Current Liabilities
The following tables summarizeOther current liabilities consisted of the other liabilities as of September 30, 2021 and December 31, 2020:following:
 
   
September 30,
   
December
31,
 
   
2021
   
2020
 
Other current liabilities
   12,659    22,926 
Other non-current liabilities
   4,292    475 
   
 
 
   
 
 
 
Total
  
 
16,951
 
  
 
23,402
 
   
 
 
   
 
 
 
1
3
Table of Contents
The following table summarizes the other liabilities by nature as of September 30, 2021 and December 31, 2020:
  
September 30,
   
December
31,
   
March 31,
   
December 31,
 
  
2021
   
2020
   
2022
   
2021
 
  
Other current
liabilities
   
Other non-current

liabilities
   Total   Total 
Employee related liabilities
  
 
6,748
 
  
 
1,674
 
   8,422    17,136 
Social security
   3,995    6,708 
Deferred income
  
 
4,291
 
  
 
2,618
 
   6,909    4,687    3,794    4,146 
Tax liabilities
  
 
149
 
  
 
—  
 
   149    580    137    182 
Other debts
  
 
1,471
 
  
 
—  
 
   1,471    999    793    1,325 
  
 
   
 
   
 
   
 
   
 
   
 
 
Total
  
 
12,659
 
  
 
4,292
 
  
 
16,951
 
  
 
23,402
 
  
 
8,719
 
  
 
12,361
 
  
 
   
 
   
 
   
 
   
 
   
 
 
The other current liabilities include short-term debt to employees including employee termination allowance and benefits as part of the restructuring (refer to Note 2, “Significant Events and Transactions of the Period – Restructuring”), bonus accruals, and social welfare and tax agency obligations.
Deferred income primarily includes deferred income from the collaboration agreement with Nestlé Health Science, which amounted to $6.9$3.8 million as of September 30, 2021.March 31, 2022.
Note 5: Shareholders’ equity
The share capital as of September 30, 2021 is set at the sum of €5,501,168.70 ($6,528,543 converted at historical rates). It is divided into 55,011,687 fully authorized, subscribed and
paid-up
shares with a par value of €0.10.
During the nine months ended September 30, 2021, the capital increase of approximately $10,000 is linked to the issuance of an aggregate of 82,500 shares pursuant to the exercise of warrants.
Pursuant to the authorization granted by the General Meeting of the Shareholders held on May 19, 2021, the accumulated net losses of DBV Technologies S.A. after appropriation of the net result for the year ended December 31, 2020 have been allocated to additional
paid-in
capital in the amount of €695,575,130.36 ($797,822,881 converted at historical rates).
Note 6:7 Share-Based Payments
The Board of Directors has been authorized by the General Meeting of the Shareholders to grant restricted stock units (“RSU”), stock options
(“SO”), employee warrants (
Bons and (Bons de Souscription de Parts de Créateur d’Entreprise
or “BSPCE”) and
non-employee
warrants (
Bons de Souscription d’Actions
or “BSA”).
During the ninethree months ended September 30, 2021,March 31, 2022, the Company granted 75,600did not grant any stock options and 44,900 restricted stock units to employees. stock.
There have been no changes in the vesting conditions and method of valuation of the SO and RSURSUs from that disclosed in Note 14 1
3
to the consolidated financial statements included in the Annual Report.
Stock option fair value assumptions during the nine months ended September 30, 2021
Weighted average share price at grant date in €
9.3
Weighted average expected volatility
90.9%
Weighted average risk-free interest rate
(0.36)%
Weighted average expected term (in years)
6
Dividend yield
0—  
Weighted average fair value of stock options in €
6.9
During the nine months ended September 30, 2021, pursuant to the authorization granted by the General MeetingChange in Number of the Shareholders held on May 19, 2021, the Company offered the directors the opportunity to subscribe for warrants to purchase ordinary shares on May 19, 2021, and on
JuneBSA/SO/RSU:
 3, 2021, the directors subscribed for warrants to purchase an aggregate of 39,185 ordinary shares. These warrants have a contractual life of 4 years from their date of issuance and are not subject to a performance condition. Unless otherwise decided by the Board of Directors, these warrants may be exercised at any time prior to their expiration, provided that the beneficiary still holds a seat on the Board of Directors at the time of exercise, and subject to applicable French laws and regulations applicable to companies whose securities are listed on a regulated stock market. The fair value of the warrants has been estimated unsing the
Cox-Ross
Rubinstein binomial option pricing model.

 
   
Number of outstanding
   
BSA
   
SO
   
RSUs
 
Balance as of December 31, 2021
  
 
256,693
   
 
3,631,210
 
  
 
1,240,520
 
Granted during the period
   —      —      —   
Forfeited during the period
   —      (159,403)    (56,113) 
Exercised/released during the period
   0      —      (775) 
Expired during the period
   —      —      0   
   
 
 
   
 
 
   
 
 
 
Balance as of March 31, 2022
  
 
256,693
 
  
 
3,471,808
 
  
 
1,183,633
 
   
 
 
   
 
 
   
 
 
 
1
4Reconciliation of the share-based payments expenses with the consolidated statements of operations
   
Three months Ended March 31,
 
   
2022
   
2021
 
Research and development
  SO   (375)    (376) 
   RSU   (208)    (251) 
    
Sales and marketing
  SO   5    (49) 
   RSU   1    (22) 
    
General and administrative
  SO   (698)    (644) 
   RSU   (87)    (91) 
      
 
 
   
 
 
 
Total share-based compensation (expense)
     
 
(1,363
) 
  
 
(1,433
) 
      
 
 
   
 
 
 
11
Table of Contents
Note 8 Contingencies
Current contingencies and
non-current
contingencies break down as follows:
Warrant fair value assumptions during the nine months ended September 30, 2021
Weighted average share price at grant date in €
10.75
Weighted average expected volatility
90.0%
Weighted average risk-free interest rate
(0.53)%
Weighted average expected term (in years)
3.21
Dividend yield
0—  
Weighted average fair value of warrants in €
0  
   
March 31,
   
December 31,
 
   
2022
   
2021
 
Current contingencies
   3,529    4,095 
Non-current
contingencies
   5,758    6,758 
 �� 
 
 
   
 
 
 
Total contingencies
  
 
9,288
 
  
 
10,853
 
   
 
 
   
 
 
 
The changestable below shows movements in number of BSA/BSPCE/SO/RSU are as follows:contingencies:
 
   
Number of outstanding
 
   
BSA
   
BSPCE
   
SO
   
RSU
 
Balance as of December 31, 2020
  
 
218,008
 
  
 
5,500
 
  
 
2,610,510
 
  
 
1,118,745
 
Granted during the period
   39,185    —      75,600    44,900 
Forfeited during the period
   —      —      (100,400)    (59,500) 
Exercised/released during the period
   0      (5,500)    —      —   
Expired during the period
   (500)    —      —      —   
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance as of September 30, 2021
  
 
256,693
 
  
 
0  
 
  
 
2,585,710
 
  
 
1,104,145
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Share-based payments expenses reflected in the condensed consolidated statements of operations is as follows:
       
Three Months Ended
September 30,
  
Nine Months Ended
September 30,
 
       
2021
  
2020
  
2021
  
2020
 
Research & development
   SO    (273)   (6)   (952)   1,144 
    RSU    (660)   (102)   (795)   (628) 
Sales & marketing
   SO    (60)   186   (172)   2,063 
    RSU    (27)   (4)   (75)   (12) 
General & administrative
   SO    (439)   25   (1,791)   609 
    RSU    (92)   (24)   (293)   (211) 
        
 
 
  
 
 
  
 
 
  
 
 
 
Total share-based compensation (expense)
       
 
(1,551
) 
 
 
74
 
 
 
(4,078
) 
 
 
2,965
 
        
 
 
  
 
 
  
 
 
  
 
 
 
1
5
Table of Contents
Note 7: Contingencies
The following tables summarize the contingencies as of September 30, 2021 and December 31, 2020:
   
September 30,
   
December 31,
 
   
2021
   
2020
 
Current contingencies
   5,633    5,016 
Non-current contingencies
   7,629    2,527 
   
 
 
   
 
 
 
Total contingencies
  
 
13,262
 
  
 
7,542
 
   
 
 
   
 
 
 
The changes in contingencies are as follows:
  
Pension
retirement
obligations
   
Collaboration
agreement—

Loss at
completion
   
Other
contingencies
   
Total
   
Pension retirement

obligations
   
Collaboration

agreement -

Loss at

completion
   
Other

contingencies
   
Total
 
At January 1, 2021
  
 
937
 
  
 
3,956
 
  
 
2,649
 
  
 
7,542
 
At January 1, 2022
  
 
1,008
 
  
 
9,800
 
  
 
45
 
  
 
10,853
 
Increases in liabilities
   127    7,334    478    7,940    0      0      0      0   
Used liabilities
   —      0      (1,601)    (1,601)    —      (1,286)    (45)    (1,331) 
Reversals of unused liabilities
   —      —      —      0      (9)    —      —      (9) 
Net interest related to employee benefits, and unwinding of discount
   —      —      —      0      —      —      —      0   
Actuarial gains and losses on defined-benefit plans
   10    —      —      10    (24)    —      —      (24) 
Other effects including currency translation effect
   (57)    (458)    (113)    (629) 
Currency translation effect
   (20)    (181)    —      (202) 
  
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
At September 30, 2021
  
 
1,016
 
  
 
10,832
 
  
 
1,413
 
  
 
13,262
 
At March 31, 2022
  
 
955
 
  
 
8,332
 
  
 
0  
 
  
 
9,288
 
  
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
Of which current
  
 
—  
 
  
 
4,220
 
  
 
1,413
 
  
 
5,633
 
Of which
non-current
  
 
1,016
 
  
 
6,612
 
  
 
—  
 
  
 
7,629
 
Of which Current
  
 
—  
 
  
 
3,529
 
  
 
0  
 
  
 
3,529
 
Of which
Non-current
  
 
955
 
  
 
4,803
 
  
 
—  
 
  
 
5,758
 
In 20202021 and during the first ninethree months of 2021,2022, the ongoing
COVID-19
pandemic impacted the Company’s current clinical trials, includingCompany updated its measurement of progress of the Phase II2 clinical trial (“PII”) conducted as part of the development activities pursuant to the collaboration and license agreement with Nestlé Health Science.and updated the cumulative income recognized. The Company experienced difficulties in enrolling new patients in this Phase II clinical trial (“PII”) and modified the protocols of the clinical trial. As a result of the accumulation of recruitment delays, the Company expects to incur additional clinical and production costs related to the Phase II clinical trial.
As of September 30, 2021, the Companyhas recorded its collaboration agreement’s revenue based on its updated measurement of progress of the Phase II clinical trial conducted as part of the agreement. Thean accrual recorded in the amount of the differenceexcess between the Company’s current best estimates of costs yet to be incurred and revenuesincomes yet to be recognized for the completion of the Phase II clinical trial has been updated accordingly.
Other contingencies are primarily composed of the estimated expenses to be incurred as part of the employee-related costs related to restructuring, as well as estimated cost of refurbishing lease premises (Refer to Note 2, “Significant Events and Transactions—Restructuring”).PII.
There have been no significant changes in assumptions for the estimation of the retirement commitments from those disclosed in Note 1514 to the consolidated financial statements included in the Annual Report.
1
6
Table of Contents
Note 8:9 Operating income
The following table summarizes the operating income duringis broken down in the three and nine months ended September 30, 2021 and 2020:following manner:
 
  
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
   
Three months Ended March 31,
 
  
2021
   
2020
   
2021
   
2020
   
2022
   
2021
 
Research tax credit
   1,647    1,815    5,324    7,615    1,569    1,807 
Other operating
(
loss
)
income
   (324)    2,344    (2,549)    4,873 
Other operating income
   976    1,133 
  
 
   
 
   
 
   
 
   
 
   
 
 
Total
  
 
1,323
 
  
 
4,158
 
  
 
2,776
 
  
 
12,488
 
  
 
2,546
 
  
 
2,941
 
  
 
   
 
   
 
   
 
   
 
   
 
 
In 2020 and during the first nine months of 2021, the ongoing
COVID-19
pandemic i
m
12
pacted the Company’s current clinical trials, including the Phase II clinical trial conducted as part of the development activities pursuant to the collaboration and license agreement with Nestlé Health Science. The Company experienced difficulties in enrolling new patients in this Phase II clinical trial and modified the protocols of the clinical trial. As a result of the accumulation of recruitment delays, the Company expects to incur additional clinical and production costs related to the Phase II clinical trial.
As of September 30, 2021,March 31, 2022, the Company recorded its collaboration agreement’s revenuecontract’s income based on its updated measurement of progress of the Phase II clinical trial conducted as part of the agreement.collaboration and license agreement with Nestlé Health Science. The accrual recorded in the amount of the difference between the Company’s current best estimates of costs yet to be incurred and revenues income
yet
to be recognized for the completion of the Phase II clinical trial has been updated accordingly.
Note 9:10 Allocation of Personnel Expenses
The Company had an average of 10588 employees during the ninethree months ended September 30, 2021,March 31, 2022, in comparison with an average of 291121 employees during the ninethree months ended September 30, 2020.March 31, 2021.
The following table summarizes the allocationAllocation of personnel expensesPersonnel Expenses by function during the three and nine months ended September 30, 2021 and 2020:Function:
 
   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2021
   
2020
   
2021
   
2020
 
Research and development expenses
   4,161    5,984    12,272    18,294 
Sales and marketing expenses
   492    2,154    1,528    4,987 
General and administrative expenses
   2,583    1,570    9,347    6,628 
Restructuring expenses
   0      (231)    0      6,792 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total personnel expenses
  
 
7,236
 
  
 
9,477
 
  
 
23,148
 
  
 
36,701
 
   
 
 
   
 
 
   
 
 
   
 
 
 
   
Three months Ended March 31,
 
   
2022
   
2021
 
Research and Development expenses
   3,075    4,718 
Sales and Marketing expenses
   245    518 
General and Administrative expenses
   2,595    3,766 
   
 
 
   
 
 
 
Total personnel expenses
  
 
5,915
 
  
 
9,002
 
   
 
 
   
 
 
 
1
7
TableAllocation of Contents
The following table summarizes the allocation of personnel expensesPersonnel Expenses by nature during the three nine months ended September 30, 2021 and 2020:Nature:
 
  
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
   
Three months Ended March 31,
 
  
2021
   
2020
   
2021
   
2020
   
2022
   
2021
 
Wages and salaries
   3,793    7,021    12,629    33,121    3,987    4,454 
Social security contributions
   1,110    933    3,505    5,669    251    1,332 
Expenses for pension commitments
   286    617    981    1,116    297    402 
Employer contribution to bonus shares
   497    981    1,955    (241)    16    1,381 
Share-based payments
   1,551    (74)    4,078    (2,965)    1,363    1,433 
  
 
   
 
   
 
   
 
   
 
   
 
 
Total
  
 
7,236
 
  
 
9,477
 
  
 
23,148
 
  
 
36,701
 
  
 
5,915
 
  
 
9,002
 
  
 
   
 
   
 
   
 
   
 
   
 
 
The decrease in personnel expenses is mainly due to a decreased headcount asfollowing the implementation of a result of the 2020 global restructuring plan.new organization.
Note 10:11 Commitments
There have been 0significant0 significant changes in other commitments from those disclosed in Note 1918 to the consolidated financial statements included in the Annual Report.
Note 11:12 Relationships with Related Parties
The Company’s related parties consist of executive officers, directors and beneficial owners of five percent (5%) or more of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons. As of September 30, 2021, the total amount of remuneration granted to the members of the Board of Directors and Executive Committee has not changed significantly since December 31, 2020.
Pursuant to the authorization granted by the General Meeting of the Shareholders held on May 19, 2021, the Company offered its directors the opportunity to subscribe for warrants to purchase ordinary shares on May 19, 2021, and on June 3, 2021, the directors subscribed for warrants to purchase an aggregate
of 39,185 ordinary shares. The fair value assumptions used and the valuation method of these warrants are described in Note 6—
Share-Based Payments
.
There were 0other0 new significant
related-party
transactions during the period nor any change in the nature of the transactions from those described in Note 2019 to the consolidated financial statements included in the Annual Report.
13
Note 12:13 Loss Per Share
Basic loss per share is calculated by dividing the net loss attributable to the shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. As the Company was in a loss position for each of the three months ended March 31, 2022 and nine month periods ended September 30, 2021, and 2020, the diluted loss per share is equal to basic loss per share because the effects of potentially dilutive shares were
anti-dilutive
as a result of the Company’s net loss.
The following is a summary of the ordinary share equivalents at September 30, 2021 and 2020that were excluded from the calculation of diluted net loss per share for each of the three months ended March 31, 2022 and nine months ended September 30, 2021 and 2020 (inindicated in number of potential shares) are set forth here below:
shares:
 
  
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
                
  
2021
   
2020
   
2021
   
2020
   
Three months
Ended
March 31,
 
                  
2022
   
2021
 
Non-employee warrants
   256,693    225,008    256,693    225,008    256,693    225,008 
Employee warrants
   0      82,500    0      82,500    0      75,000 
Stock options
   2,585,710    1,596,512    2,585,710    1,596,512 
Stock-options
   3,471,808    2,670,710 
Restricted stock units
   1,104,145    713,345    1,104,145    713,345    1,183,633    1,129,945 
1
8
Table of Contents
Note 13:14 Events after the Close of the Period
The Company evaluated subsequent events that occurred after September 30, 2021,March 31, 2022, through the date the condensed consolidated financial statements were issued after their approval by the Board of Directors on October 26, 2021April 29, 2022.
On March 28, 2022, the Company entered into a binding office lease agreement in New Jersey for a lease term of 3 years and determined that there are no significant events that require adjustments or disclosure in such condensed consolidated financial statements.2 months. The lease commencement was based upon delivery of possession of the premises by the
l
andlord and occurred on April 1, 2022. Right of use and related lease debt will be recorded starting April 1, 2022.
 
19
14
Table of Contents
Item 2.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part 1, Item 1 of this Report and with our audited financial statements and related notes thereto for the year ended December 31, 2020,2021, included in our Annual Report on Form
10-K
for the year ended December 31, 2020,2021, filed with the Securities and Exchange Commission on March 17, 2021,9, 2022, or the Annual Report. This discussion and other parts of this Report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause such differences are discussed in the section of this Report titled “Special Note Regarding Forward-Looking Statements” and under “Item 1A. Risk Factors” in the Annual Report.
Overview
We are a clinical-stage specialty biopharmaceutical company focused on changing the field of immunotherapy by developing a novel technology platform called Viaskin. Our therapeutic approach is based on epicutaneous immunotherapy, or EPIT
TM
,EPITTM, our proprietary method of delivering biologically active compounds to the immune system through intact skin using Viaskin. We have generated significant data demonstrating that Viaskin’s mechanism of action is novel and differentiated, as it targets specific
antigen-presenting
immune cells in the skin, called Langerhans cells, that capture the antigen and migrate to the lymph node in order to activate the immune system without passage of the antigen into the bloodstream, minimizing systemic exposure in the body. We are advancing this unique technology to treat patients, including infants and children, suffering from food allergies, for whom safety is paramount, since the introduction of the offending allergen into their bloodstream can cause severe or
life-threatening
allergic reactions, such as anaphylactic shock. We believe Viaskin may offer convenient, self-administered,
non-invasive
immunotherapy to patients.
Following receipt of a CRL from the FDA in connection with our BLA for Viaskin Peanut, beginning in August 2020, we scaled down our other clinical programs and pre-clinical spend to focus on Viaskin Peanut. We also initiated a global restructuring plan in June 2020 to provide operational latitude to progress the clinical development and regulatory review of Viaskin Peanut in the United States and European Union.
In January 2021, we received written responses from the FDA to questions provided in the Type A meeting request we submitted in October 2020 following the CRL. In exchanges with the FDA, we proposed potential resolutions to two main concerns identified by the FDA in the CRL: the impact of patch adhesion and the need for patch modifications. The FDA agreed with our position that a modified Viaskin Peanut patch should not be considered as a new product entity provided the occlusion chamber of the current Viaskin Peanut patch and the peanut protein dose of 250 µg (approximately 1/10001,000 of aone peanut) remains unchanged and performs in the same way it has performed previously. In order to confirm the consistency of efficacy data between the existing and a modified patches, thepatch, FDA has requested an assessment comparing the uptake of allergen (peanut protein) between the patches in peanut allergic children ages 4 to 11 years.
4-11.
We named that assessment EQUAL, which stands for Equivalence in Uptake of Allergen. The FDA also recommended conducting a
6-month,
well-controlled safety and adhesion trial to assess thea modified Viaskin Peanut patch in the intended patient population. We later named this clinical trial STAMP, which stands for Safety, Tolerability, and Adhesion of Modified Patches.
Based on the January 2021 FDA feedback, we defined three parallel workstreams:
1.
Identify a modified Viaskin patch (which we call mVP).
2.
Generate the
6-month
safety and adhesion clinical data FDA requested via STAMP, which we expected to be the longest component of the mVP clinical plan. We prioritized the STAMP protocol submission so we could begin the clinical trial as soon as possible.
3.
Demonstrate the equivalence in allergen uptake between the current and modified patches in the intended patient population via EQUAL. The complexity of EQUAL hinged on the lack of established clinical and regulatory criteria to characterize allergen uptake via an epicutaneous patch. To support those exchanges, we outlined our proposed approach to demonstrate allergen uptake equivalence between the two patches, and allotted time to generate informative data through two additional Phase I clinical trials in healthy adult volunteers:
a.
PREQUAL, a Phase I trial with adult healthy volunteers to optimize the allergen sample collection methodologies and validate the assays we intend to use in EQUAL. The data collection phase of the trial is complete, and the data analysis phase is ongoing.
b.
‘EQUAL in adults,’ a second Phase I trial with adult healthy volunteers to compare the allergen uptake of cVP and mVP.
In the second quarter ofMarch 2021, we completedcommenced CHAMP (Comparison of adHesion Among Modified Patches), a Phase I trial in healthy adult volunteers to evaluate the adhesion of five modified Viaskin Peanut patchespatches. We completed CHAMP in order to identify the top performers. Based on the adhesion parameters studied, we were pleased to learn that allsecond quarter of 2021. All modified Viaskin Peanut patches demonstrated better adhesion performance as compared to the currentthen-current Viaskin Peanut patch. Wepatch, and based on the results of CHAMP, we then selected two modified patches that performed best out of the five modified patches studied for further development.
The difference between We then selected the two selected patchescircular patch for further development, which is their shape—one is circular and the other is rectangular with rounded corners. They are both approximately 50% larger thanin size relative to the current patch but maintainand circular in shape.
In May 2021, we submitted our proposed STAMP protocol to the same structure ofFDA, and on October 14, 2021, we received an Advice/Information Request letter from the occlusion chamber (i.e., foam ringFDA. In this letter, the FDA requested a stepwise approach to the modified Viaskin patch development program and backing). We also conducted advisory boards with patient caregivers and key opinion leaders to obtain qualitativeprovided partial feedback on the consumer experience with both patches.STAMP protocol. Specifically, the FDA requested that we conduct allergen uptake comparison trials (i.e., ‘EQUAL in Adults,’ EQUAL), and submit the allergen uptake comparison data for FDA review and feedback prior to starting the STAMP study. The FDA’s explanation was that the results from the allergen uptake trials might affect the design of the STAMP study.
After careful review of the FDA’s information requests, in December 2021, we decided not to pursue the sequential approach to the development plans for Viaskin Peanut as requested by the FDA in the October 2021 feedback. We estimated that the FDA’s newly proposed sequential approach would require at least five rounds of exchanges that necessitate FDA alignment prior to initiating STAMP, the
I6-month
nsafety and adhesion study. As such, in December 2021, we announced we plan to initiate a pivotal Phase 3 placebo-controlled efficacy trial for a modified Viaskin Peanut patch (mVP) in children in the intended patient population. The clinical trial will also include updates to the Instructions for Use (IFU). We consider this approach the most straightforward to potentially demonstrate effectiveness, safety, and improved in vivo adhesion of the modified Viaskin Peanut system. The FDA has confirmed (“mVP”) change in strategy is agreeable via oral and written exchanges. The protocol for the new Phase 3 pivotal study of the modified Viaskin Peanut (mVP) patch was completed at the end of February 2022 and was submitted to the FDA in April 2022. The Company has been granted a Type C meeting by the FDA , which is expected to be held in the second quarter of 2021, we initiated PREQUAL, a2022, to align on the new Phase 13 study in healthy adult volunteers to optimize the allergen sample collection methodologiesprotocol.
15
Business trends and validate the assays we intend to use in EQUAL (EQuivalence in UptakeResults of ALergen) to demonstrate the protein uptake comparability of the modified patch (mVP) to the reference or current patc
h (cVP).Operations
We submittedThe following table summarizes our results of operations, derived from our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and presented in thousands of U.S. Dollars for the protocol for STAMP (Safety, Tolerabilitythree months ended March 31, 2022 and Adhesion of Modified Patches), the2021:
 
   
Three months ended
 
   
2022
   
2021
 
Operating income
  
$
2,546
 
  
$
2,941
 
Operating expenses
          
Research and development expenses
   (12,223)    (22,164) 
Sales and marketing expenses
   (464)    (729) 
General and administrative expenses
   (6,630)    (9,683) 
   
 
 
   
 
 
 
Total Operating expenses
  
 
(19,317
) 
  
 
(32,575
) 
   
 
 
   
 
 
 
Financial income
   152    215 
   
 
 
   
 
 
 
Income tax
   (87)    (30) 
   
 
 
   
 
 
 
Net loss
  
$
(16,706
) 
  
$
(29,449
) 
   
 
 
   
 
 
 
Basic/diluted Net loss per share attributable to shareholders
  
$
(0.30
) 
  
$
(0.54
) 
6-month
adhesion and safety study
Comparison of the modified patch,three months ended March 31, 2022 to the FDA on May 6, and received feedbackthree months ended March 31, 2021
Operating Income
We generated operating income of $2.5 million during the three months ended March 31, 2022 compared to $2.9 million during the three months ended March 31, 2021, a decrease of 13.4%. This income was mainly generated from the FDAFrench research tax credit (
crédit d’impôt recherche)
, or CIR, and by revenue recognized under our collaboration agreement with Nestlé Health Science.
   
Three months Ended March

31
   
% change
 
   
2022
   
2021
     
Sales
   —      —     
Other income
   2,546    2,941    (13%) 
Research tax credit
  
 
1,569
 
  
 
1,807
 
   (13%) 
Other operating (loss) income
  
 
976
 
  
 
1,133
 
   (14%) 
  
 
 
   
 
 
   
 
 
 
Total operating income
  
 
2,546
 
  
 
2,941
 
  
 
(13
%) 
  
 
 
   
 
 
   
 
 
 
The decrease in operating income is primarily attributable to the decrease of the CIR, as eligible expenses have declined in correlation with Research and Development costs.
As of March 31, 2022, we recorded our collaboration contract income based on October 14,our updated measurement of progress of the Phase II clinical trial conducted as part of the collaboration and license agreement with Nestlé Health Science. The accrual recorded in the amount of the difference between our current best estimates of costs yet to be incurred and income yet to be recognized for the completion of the Phase II clinical has been updated accordingly.
16
Operating Expense
Research and Development Expenses
The following table summarizes our research and development expenses incurred during the three months ended March 31, 2022 and 2021
:
   
Three months ended March 31,
   
$ change
   
% change
 
Research and Development expenses
  
2022
   
2021
         
External clinical-related expenses
   7,350    12,878    (5,528)    (43%) 
Employee-related costs
   2,492    4,091    (1,599)    (39%) 
Share-based payment expenses
   583    627    (45)    (7%) 
Depreciation, amortization and other costs
   1,799    4,568    (2,769)    (61%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Research and Development expenses
  
 
12,223
 
  
 
22,164
 
  
 
(9,941
) 
  
 
(45
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Research and development expenses decreased by $9.9 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to a decrease of $5.5 million in external clinical-related expenses as main component of the work on clinical studies such as REALISE and EPITOPE has been finalized during the year 2021. We have also continued to practice financial diligence and implemented further cost containment strategies.
Employee-related costs, excluding share-based payment expenses, decreased by $1.6 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, due to the workforce reduction following full implementation of the new organization.
The FDA has requested usdecrease in depreciation, amortization and other costs was primarily due to the reversal of loss at completion recorded on the Phase II clinical trial conducted as part of the Nestlé agreement.
Sales and Marketing expenses
The following table summarizes our sales and marketing expenses incurred during the three months ended March 31, 2022 and 2021:
   
Three months ended March

31,
   
$ change
   
% change
 
Sales & Marketing expenses
  
2022
   
2021
         
Employee-related costs
   245    518    (273)    (53%) 
External professional services
   122    84    38    45% 
Share-based payment expenses
   (5)    71    (76)    (108%) 
Depreciation, amortization and other costs
   102    56    46    82% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Sales & Marketing expenses
  
 
464
 
  
 
729
 
  
 
(265
) 
  
 
(36
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Sales and marketing expenses decreased by $0.3 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to a stepwise approachdecrease in employee-related costs, partially offset by depreciation and amortization costs.
Employee-related costs, excluding share-based payments expenses, decreased by $0.3 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021 due to the workforce reduction following full implementation of the new organization.
17
General and Administrative expenses
The following table summarizes our general and administrative expenses incurred during the three months ended March 31, 2022 and 2021:
   
Three months ended March 31,
   
$ change
   
% change
 
General & Administrative expenses
  
2022
   
2021
         
External professional services
   1,108    2,287    (1,179)    (52%) 
Employee-related costs
   1,810    3,031    (1,221)    (40%) 
Share-based payment expenses
   786    735    51    7% 
Depreciation, amortization and other costs
   2,927    3,630    (702)    (19%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total General & Administrative expenses
  
 
6,630
 
  
 
9,683
 
  
 
(3,052
) 
  
 
(32
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
General and administrative expenses decreased by $3.1 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to a decrease in employee-related costs and external professional services as we continued to practice financial diligence and implemented further cost containment strategies.
Employee-related costs, excluding share-based payments expenses, decreased by $1.2 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021 due to the workforce reduction following full implementation of the new organization.
Financial income
Our financial income was $0.2 million for the three months ended March 31, 2022 and 2021. This item mainly includes foreign exchange income.
Net loss
Net loss was $16.7 million for the three months ended March 31, 2022, compared to $29.4 million for the three months ended March 31, 2021. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.30 and $0.54 for three months ended March 31, 2022 and 2021, respectively.
Liquidity and Capital Resources
Financial Condition
On March 31, 2022, we had $74.1 million in cash and cash equivalents compared to $77.3 million of cash and cash equivalents on December 31, 2021. We have incurred operating losses and negative cash flows from operations since our inception. Net cash used for operating activities was $1.5 and $36.2 million for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, we recorded a net loss of $16.7 million.
Based on our current operations, as well as our plans and assumptions as revised pursuant to our modified Viaskin Peanut (mVP) development program. The FDA would like uschange of strategy announced in December 2021, we expect that our balance of cash and cash equivalents of $74.1 million as of March 31, 2022 will be sufficient to review the data fromfund our protein uptake release study prior to providing additional comments on the STAMP protocol design. In its communication, the FDA stated that guidance is forthcoming on how best to demonstrate the protein uptake comparability of the mVP to the reference or current patch (cVP). The STAMP trial will not be initiated until we receive complete feedback from the FDA.
Viaskin
Peanut in Europe
Duringoperations into the first quarter of 2023. As of the date of the filing, our available cash is not projected to be sufficient to support our operating plan for at least the next 12 months. As such, there is substantial doubt regarding our ability to continue as a going concern.
We intend to seek additional capital as we prepare for the launch of Viaskin Peanut, if approved, and continue other research and development efforts. We may seek to finance our future cash needs through a combination of public or private equity or debt financings, collaborations, license and development agreements and other forms of non-dilutive financings. We cannot guarantee that we will be able to obtain the necessary financing to meet our needs or to obtain funds at attractive terms and conditions, including as a result of disruptions to the global financial markets due to the ongoing COVID-19 pandemic. The ongoing COVID-19 pandemic has already caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to us, including reduced ability to raise additional capital when needed or on acceptable terms, if at all.
If we are not successful in our financing objectives, we could have to scale back our operations, notably by delaying or reducing the scope of our research and development efforts or obtain financing through arrangements with collaborators or others that may require us to relinquish rights to our product candidates that we might otherwise seek to develop or commercialize independently.
Our financial statements have been prepared on a going concern basis assuming that we will be successful in our financing objectives. As such, no adjustments have been made to the financial statements relating to the recoverability and classification of the asset carrying amounts or classification of liabilities that might be necessary should we not be able to continue as a going concern.
Sources and Material Cash Requirements
Based on our current operations, as well as our plans and assumptions as revised pursuant to our change of strategy announced in December 2021, we receivedexpect that our balance of cash and cash equivalents of $74.1 million as of March 31, 2022 will be sufficient to fund our operations into the first setquarter of questions from the European Medicines Agency, or EMA, regarding the Marketing Authorization Application, or MAA, for Viaskin Peanut as a treatment for peanut allergy in children ages
4-11.2023.
The questions were consistent with our expectations and prefiling conversations with the EMA. We did not receive questions about the impact of adhesion on efficacy. The EMA’s Committee for Medicinal Products for Human Use will provide a recommendation to the European Commission, or EC, on whether to grant a marketing authorization when its review of the Viaskin Peanut MAA is complete.
 
2
0
18
Table
We fund short-term cash requirements primarily from payments associated with research tax credits (
Crédit d’Impôt Recherche
).
We have incurred net losses each year since our inception. Substantially all of Contentsour net losses resulted from costs incurred in connection with our development programs and from general and administrative expenses associated with our operations. We have not incurred any bank debt.
As of the date of the filing, our available cash is not projected to be sufficient to support our operating plan for at least the next 12 months. As such, there is substantial doubt regarding our ability to continue as a going concern. We intend to seek additional capital as we prepare for the launch of Viaskin Peanut, if approved, and continue other research and development efforts. We may seek to finance our future cash needs through a combination of public or private equity or debt financings, collaborations, license and development agreements and other forms of
non-dilutive
financings.
We cannot guarantee that we will be able to obtain the necessary financing to meet our needs or to obtain funds at attractive terms and conditions, including as a result of disruptions to the global financial markets due to the ongoing
COVID-19
pandemic. The ongoing
COVID-19
pandemic has already caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to us, including reduced ability to raise additional capital when needed or on acceptable terms, if at all.
If we are not successful in our financing objectives, we could have to scale back our operations, notably by delaying or reducing the scope of our research and development efforts or obtain financing through arrangements with collaborators or others that may require us to relinquish rights to our product candidates that we might otherwise seek to develop or commercialize independently.
The following table presents our material cash requirements for future periods:
   
Material Cash Requirements Due by the period Ended
March 31,
 
   
2023
   
2024-2025
   
2026-2027
   
Thereafter
   
Total
 
   
(Amounts in thousands)
 
Conditional advances
   333    —      —      —      333 
Operating leases
   2,034    2,268    —      —      4,302 
Purchase obligations - Obligations Under the Terms of CRO Agreements
   20,785    8,825    3,457    —      33,067 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
   23,152    11,094    3,457    —      37,703 
The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including interest on long-term debt, fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty.
Future events could cause actual payments to differ from these estimates.
Conditional advances
In July 2021, we2014, BpiFrance Financement granted an interest-free Innovation loan to DBV Technologies to help financing the pharmaceutical development of Viaskin
™
Milk. This amount was received fromin a single disbursement on November 27, 2014. In 2020, due to the EMA
COVID-19
pandemic, Bpifrance postponed the repayments for a Day 180 list
6-month
period. Repayment will end during the third quarter of outstanding issues. The review2022.
Operating leases
Our corporate headquarters are located in Montrouge, France. Our principal offices occupy a 4,470 square meter facility, pursuant to a lease agreement dated March 3, 2015 and represents a $3.9 million cash requirement as of March 31, 2022 which expires March 8, 2024.
We also have facilities in North America that were initially intended to support our U.S. subsidiary as well as future commercialization needs. We lease 3,780 square feet of office space in Tower 49, New York, New York. This lease is for a period of 65 months and expires on February 25, 2023. In light of our global restructuring, the current stage of regulatory interactions regarding Viaskin Peanut, MAA is progressing according to established EMA processes and ongoing conversations with the EMA.ongoing
COVID-19
M
anypandemic, we entered into a sublease agreement of EMA’s Objections and Major Objections have been answered; one Major Objection remained.
We are preparing our responses to the Day 180 letter and evaluating how to best address the Objections, including the remaining Major Objection which questions the limitationsthis office space in June 2021. The NYC office represents a $0.3 million cash requirement as of the data, for example, the clinical relevance and effect size supported by a single pivotal study. Further exchanges with EMA are anticipated. We estimate the EMA could issue its decision on potential marketing authorization for Viaskin Peanut inMarch 31, 2022 until the first quarter of 2023.
On March 28, 2022, the Company entered into a binding office lease agreement in New Jersey for a lease term of 3 years and 2 months. The lease commencement was based upon delivery of possession of the premises by the Landlord and occurred on April 1, 2022. Right of use and related lease debt will be recorded starting April 1, 2022.
Purchase obligations - Obligations Under the Terms of CRO Agreements
In connection with the launch of our clinical trials for Viaskin Peanut and Viaskin Milk, we signed agreements with several contract research organizations. Expenses associated with the ongoing trials amounted globally to $105.5 million. As of March 31, 2022, the amount we are still obligated to pay in connection with these contracts through 2024 is $33.1 million.
19
Cash flows
The table below summarizes our sources and uses of cash for the three months ended March 21, 2022 and 2021:
   
Three months ended March

31,
   
% change
 
(Amounts in thousands of U.S. Dollars)
  
2022
   
2021
     
Net cash flow used in operating activities
   (1,483)    (36,204)    (96%) 
Net cash flow provided by (used in) investing activities
   11    (185)    (106%) 
Net cash flow (used in) provided by financing activities
   (129)    440    
(129
%)
 
Effect of exchange rate changes on cash and cash equivalents
   (1,594)    (7,944)    
(80
%)
 
  
 
 
   
 
 
   
 
 
 
Net (decrease) increase in cash and cash equivalents
  
 
(3,194
) 
  
 
(43,893
) 
  
 
(93
%) 
  
 
 
   
 
 
   
 
 
 
Operating
Activities
Our net cash flows used in operating activities were $1.4 million and $36.2 million during the three months ended March 31, 2022 and 2021, respectively. Our net cash flows used in operating activities decreased by $34.7 million, or 95.9%, mainly due to the budget discipline measures we took, in particular the decrease in personnel expenses, which was directly related to the workforce reduction we implemented as part of our global restructuring plan. Cash flows used in operating activities for the three months ended March 31, 2022 also included $20.9 million of reimbursement of the Research Tax Credit.
Based on our current assumptions, we expect that our current cash and cash equivalents will support our operations into the first quarter of 2023.
Off-Balance
Sheet Arrangements
We have not entered into any
off-balance
sheet arrangements and do not have variable interests in variable interest entities.    
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the revenue, costs and expenses recognized during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no new policies or significant changes to our critical accounting policies as disclosed in the critical accounting policies described in the Annual Report. Our significant accounting policies are more fully described in Note 1 of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of our Annual Report.
Results of Operations
Comparison of the Three Months Ended September 30, 2021 and 2020
The following table summarizes our results of operations, derived from our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and presented in thousands of U.S. Dollars,Report on Form 10-K for the three monthsyear ended September 30, 2021 and 2020.
   
Three months ended
September 30,
   
$ change
   
% change
 
   
2021
   
2020
 
Operating income
  
$
1,323
 
  
$
4,158
 
  
$
(2,836
)
 		   
(68
%)
 
Operating expenses
                    
Research and development expenses
   (16,320)    (25,751)    9,430    (37%) 
Sales and marketing expenses
   (1,072)    (1,595)    524    (33%) 
General and administrative expenses
   (8,299)    (6,863)    (1,437)    21% 
Restructuring expenses
   —      286    (286)    100% 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total Operating expenses
  
 
(25,691)
 
  
 
(33,923)
 
  
 
8,232
 
  
 
(24%)
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Financial income (expense)
   336    (1,184)    1,519    (128%) 
   
 
 
   
 
 
   
 
 
   
 
 
 
Income tax
   —      (7)    7    (100%) 
   
 
 
   
 
 
   
 
 
   
 
 
 
Net loss
  
$
(24,033
) 
  
$
(30,955
) 
  
$
6,922
 
  
 
(22
%) 
   
 
 
   
 
 
   
 
 
   
 
 
 
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Operating Income
The following table summarizes our operating income during the three months ended September 30, 2021 and 2020:
   
Three months ended
September 30,
   
$ change
   
% change
 
   
2021
   
2020
 
Sales
   —      —      —      —   
Other income
   1,323    4,158    (2,836)    (68%) 
Research tax credit
  
 
1,647
 
  
 
1,815
 
  
 
(168
) 
  
 
(9
%) 
Other operating (loss) income
  
 
(324
) 
  
 
2,344
 
  
 
(2,668
) 
  
 
(114
%) 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total operating income
  
 
1,323
 
  
 
4,158
 
  
 
(2,836
) 
  
 
(68
%) 
   
 
 
   
 
 
   
 
 
   
 
 
 
Our operating income is primarily generated from the French research tax credit (
Cr
é
dit
d
’
Iimp
ô
t
Recherche
, or
CIR
), and by the revenue recognized under our collaboration agreement with Nestlé Health Science. We generated operating income of $1.3 million during the three months ended September 30, 2021 compared to $4.2 million during the three months ended September 30, 2020. The decrease in operating income is primarily attributable to the change in the revenue recognized under the Nestlé’s collaboration agreement, as we updated the measurement of progress of the Phase II clinical trial conducted as part of the agreement due to delays in new patient enrollment. The decrease in research tax credit is attributable to the decline of eligible expenses in connection with the decrease in Research and development expenses.
Research and Development Expenses
The following table summarizes our research and development expenses incurred during the three months ended September 30, 2021 and 2020:
   
Three Months Ended
September 30,
   
$ change
   
% change
 
Research and development expenses
  
 
2021
 
  
 
2020
 
External clinical-related expenses
   8,633    5,175    3,458    67% 
Employee-related costs
   3,228    5,876    (2,648)    (45%) 
Share-based payment expenses
   933    108    825    * 
Depreciation, amortization and other costs
   3,526    14,592    (11,066)    (76%) 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total Research and development expenses
  
 
16,320
 
  
 
25,751
 
  
 
(9,430
) 
  
 
(37
%) 
   
 
 
   
 
 
   
 
 
   
 
 
 
*Percentage not meaningful
Research and development expenses decreased by $9.4 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to a decrease in depreciation, amortization and other costs, as well as in employee-related costs, partially offset by an increase in external clinical-related expenses.
The decrease in depreciation, amortization and other costs was primarily due to the decrease in inventory depreciation, as we wrote down any inventories and work in progress to zero pending regulatory approval in the third quarter of 2020 following the CRL received from the FDA.This variation was partially offset by the accrual recorded in the amount of the difference between our current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase II clinical trial conducted as part of the Nestlé agreement.
Employee-related costs, excluding share-based payment expenses, decreased by $2.6 million for the three months ended September 30, 2021, compared to the three months ended September 30, 2020, due to the workforce reduction we implemented as part of our 2020 global restructuring plan.
External clinical-related expenses increased by $3.5 million for the three months ended September 30, 2021, compared to the three months ended September 30, 2020, primarily due to the completion of CHAMP, the initiation of PREQUAL and the preparation of the clinical protocol for STAMP.
The share-based payment expenses recognized for the three months ended September 30, 2020 was triggered by the reversal of share-based payment expenses due to employees’ departures in the context of our restructuring plan.
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Sales and Marketing expenses
The following table summarizes our sales and marketing expenses incurred during the three months ended September 30, 2021 and 2020:
   
Three Months Ended
September 30,
   
$ change
   
% change
 
Sales and Marketing expenses
  
2021
   
2020
 
External professional services
   379    (239)    619    (258%) 
Employee-related costs
   405    2,336    (1,931)    (83%) 
Share-based payment expenses (income)
   87    (182)    269    (148%) 
Depreciation, amortization and other costs
   200    (320)    520    (163%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Sales and Marketing expenses
  
 
1,072
 
  
 
1,595
 
  
 
(524
) 
  
 
(33
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Sales and marketing expenses amounted to $1.1 million for the three months ended September 30, 2021, compared to $1.6 million for the three months ended September 30, 2020. This decrease was primarily related to a decrease in employee-related costs of $1.9 million due related to the workforce reduction implemented as part of our restructuring plan.
General and Administrative expenses
The following table summarizes our general and administrative expenses incurred during the three months ended September 30, 2021 and 2020:
   
Three Months Ended
September 30,
   
$ change
   
% change
 
General and Administrative expenses
  
2021
   
2020
 
External professional services
   2,216    1,663    552    33% 
Employee-related costs
   2,052    1,571    482    31% 
Share-based payment expenses
   530    —      531    * 
Depreciation, amortization and other costs
   3,501    3,629    (128)    (4%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total General and Administrative expenses
  
 
8,299
 
  
 
6,863
 
  
 
1,437
 
  
 
21
% 
  
 
 
   
 
 
   
 
 
   
 
 
 
*Percentage
not meaningful
General and administrative expenses increased by $1.4 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 primarily due to the effect of exchange rates on external professional fees and employee-related costs.
The share-based payment expense was nil for the three months ended September 30, 2020 mostly due to employees’ departures in the context of our 2020 global restructuring plan.
Restructuring expenses
We initiated a global restructuring plan in June 2020 to provide operational latitude to progress in the clinical development and regulatory review of investigational Viaskin
™
Peanut in the United States and European Union. For the three months ended September 30, 2021, our average headcount was 94, compared to 248 for the three months ended September 30, 2020.
As of September 30, 2021, we had 92 employees. We expect full implementation of the organization-wide cost reduction measures to be completed in the fourth quarter of 2021.
The restructuring costs were mainly comprised of payroll expenses, restructuring-related consulting and legal fees, as well as impairment of facilities and right-of-use assets following resizing of facilities.
There were no restructuring costs for three months ended September 30, 2021.
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Table of Contents
Financial income (expense)
Our financial income was $0.3 million for the three months ended September 30, 2021 compared to a financial expense of $1.2 million for the three months ended September 30, 2020. This item mainly includes foreign exchange income and expenses.
Income tax
We did not have any income tax profit for the three months ended September 30, 2021 or 2020.
Net loss
Net loss was $24.0 million for the three months ended September 30, 2021, compared to $31.0 million for the three months ended September 30, 2020. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.44 and $0.56 for the three months ended September 30, 2021 and 2020, respectively.
Results of Operations
Comparison of the Nine Months Ended September 30, 2021 and 2020
The following table summarizes our results of operations, derived from our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and presented in thousands of U.S. Dollars, for the nine months ended September 30, 2021 and 2020.
   
Nine months ended
September 30,
   
$ change
   
% change
 
   
2021
   
2020
 
Operating income
  
$
2,776
 
  
$
12,488
 
  
$
(9,713
) 
  
 
(78
%) 
Operating expenses
        
Research and development expenses
   (58,663)    (75,214)    16,551    (22%) 
Sales and marketing expenses
   (2,999)    (8,114)    5,115    (63%) 
General and administrative expenses
   (26,250)    (26,838)    587    (2%) 
Restructuring expenses
   —      (21,003)    21,003    (100%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Operating expenses
  
 
(87,912
) 
  
 
(131,169
) 
  
 
43,257
 
   (
33
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Financial income (expense)
   597    (1,380)    1,977    (143%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Income tax
   404    (10)    414    * 
  
 
 
   
 
 
   
 
 
   
 
 
 
Net loss
  
$
(84,136
) 
  
$
(120,071
) 
  
$
35,935
 
  
 
(30
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
*
Percentage not meaningful
Operating Income
The following table summarizes our operating income during the nine months ended September 30, 2021 and 2020:
   
Nine Months ended September 30,
   
$ change
   
% change
 
   
2021
   
2020
 
Sales
   —      —       
Other income
   2,776    12,488    (9,713)    (78%) 
Research tax credit
  
 
5,324
 
  
 
7,615
 
  
 
(2,291
) 
  
 
(30
%) 
Other operating (loss) income
  
 
(2,549
) 
  
 
4,873
 
  
 
(7,422
) 
  
 
(152
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total operating income
  
 
2,776
 
  
 
12,488
 
  
 
(9,713
) 
  
 
(78
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
24
Table of Contents
Our operating income was primarily generated from the French research tax credit (
CIR
) and from revenue recognized under our collaboration agreement with Nestlé Health Science. We generated operating income of $2.8 million during the nine months ended September 30, 2021, compared to $12.5 million during the nine months ended September 30, 2020. The decrease in operating income is primarily attributable to the change in the revenue recognized under the Nestlé’s collaboration agreement, as we updated the measurement of progress of the Phase II clinical trial conducted as part of the agreement due to delays in new patient enrollment. The decrease in research tax credit is attributable to the decline in eligible expenses in connection with research and development expenses.
Research and Development Expenses
The following table summarizes our research and development expenses incurred during the nine months ended September 30, 2021 and 2020:
   
Nine Months Ended
September 30,
   
$ change
   
% change
 
Research and development expenses
  
2021
   
2020
 
External clinical-related expenses
   31,319    34,494    (3,175)    (9%) 
Employee-related costs
   10,525    18,810    (8,284)    (44%) 
Share-based payment expenses (income)
   1,747    (516)    2,263    (439%) 
Depreciation, amortization and other costs
   15,072    22,427    (7,355)    (33%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Research and development expenses
  
 
58,663
 
  
 
75,214
 
  
 
(16,551
) 
  
 
(22
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Research and development expenses decreased by $16.6 million for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, primarily due to a decrease in employee-related costs and depreciation, amortization and other costs, as well as in external clinical-related expenses, offset by an increase in share-based payment expenses.
External clinical-related expenses decreased by $3.2 million for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, primarily due to cost containment measures following our 2020 global restructuring plan.
Employee-related costs, excluding share-based payment expenses, decreased by $8.3 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 due to the workforce reduction we implemented as part of our 2020 global restructuring plan.
The decrease in depreciation, amortization and other costs was primarily due to the decrease in inventory depreciation, as we wrote down any inventories and work in progress to zero pending regulatory approval in the third quarter of 2020 following the CRL received from the FDA.This variation was partially offset by the accrual recorded in the amount of the difference between our current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase II clinical trial conducted as part of the Nestlé agreement.
The share-based payment income recognized for the nine months ended September 30, 2020 was triggered by the reversal of share-based payment expenses due to employees’ departures in the context of our restructuring plan.
Sales and Marketing expenses
The following table summarizes our sales and marketing expenses incurred during the nine months ended September 30, 2021 and 2020:
   
Nine Months Ended
September 30,
   
$ change
   
% change
 
Sales and Marketing expenses
  
2021
   
2020
 
External professional services
   771    2,881    (2,111)    (73%) 
Employee-related costs
   1,282    7,038    (5,757)    (82%) 
Share-based payment expenses (income)
   246    (2,052)    2,298    (112%) 
Depreciation, amortization and other costs
   700    246    454    185% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Sales and Marketing expenses
  
 
2,999
 
  
 
8,114
 
  
 
(5,115
) 
  
 
(63
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
25
Table of Contents
Sales and marketing expenses decreased by $5.1 million for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, primarily due to a decrease in employee-related costs and external professional services, partially offset by share-based payment expenses.
Employee-related costs, excluding share-based payments expenses, decreased by $5.8 million for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020 due to the workforce reduction we implemented as part of our 2020 global restructuring plan.
External professional services decreased by $2.1 million for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, primarily as a result of budget discipline measures. The share-based payment expense recognized for the nine months ended September 30, 2021 and the income recognized for the nine months ended September 30, 2020 was triggered by the reversal of share-based payment expenses due to employees’ departures in the context of our restructuring plan.
26
Table of Contents
General and Administrative expenses
The following table summarizes our general and administrative expenses incurred during the nine months ended September 30, 2021 and 2020:
   
Nine Months Ended
September 30,
   
$ change
   
% change
 
General and Administrative expenses
  
2021
   
2020
 
External professional services
   6,425    10,517    (4,092)    (39%) 
Employee-related costs
   7,263    7,026    237    3% 
Share-based payment expenses (income)
   2,084    (397)    2,482    625% 
Depreciation, amortization and other costs
   10,478    9,693    785    8% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total General and Administrative expenses
  
 
26,250
 
  
 
26,838
 
  
 
(587
) 
  
 
(2
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
*
Percentage not meaningful
General and administrative expenses decreased by $0.6 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to cost containment measures and decreased external professional fees, partially offset by an increase in share-based payment expenses.
The share-based payment expense recognized for the nine months ended September 30, 2021 and the income recognized for the nine months ended September 30, 2020 was triggered by the reversal of share-based payment expense due to employees’ departures in the context of our 2020 global restructuring plan.
Restructuring expenses
We initiated a global restructuring plan in June 2020 to provide operational latitude to progress the clinical development and regulatory review of investigational Viaskin
™
Peanut in the United States and European Union. For the nine months ended September 30, 2021, our average headcount was 105 compared to 291 for the nine months ended September 30, 2020.
As of September 30, 2021, we had 92 employees. We expect full implementation of the organization-wide costs reduction measures to be completed in the fourth quarter of 2021.
The restructuring costs were mainly comprised of payroll expenses, restructuring-related consulting and legal fees, as well as impairment of facilities and right-of-use assets following resizing of facilities.
There were no restructuring costs for nine months ended September 30, 2021.
Financial income (expense)
Our financial income was $0.6 million for the nine months ended September 30, 2021 compared to a financial expense of $1.4 million for the nine months ended September 30, 2020. This item mainly includes foreign exchange income and expenses.
Income tax
Our income tax profit was $0.4 million for the nine months ended September 30, 2021. This income tax profit mainly resulted from US tax refunds. We did not have any income tax profit for the nine months ended September 30, 2020.
Net loss
Net loss was $84.1 million for the nine months ended September 30, 2021, compared to $120.1 million for the nine months ended September 30, 2020. Net loss per share (based on the weighted average number of shares outstanding over the period) was $1.53 and $2.23 for the nine months ended September 30, 2021 and 2020, respectively.
27
Table of Contents
Liquidity and Capital Resources
The table below summarizes our sources and uses of cash for the nine months ended September 30, 2021 and 2020.
   
Nine Months ended September
30,
   
$ change
   
% of change
 
(Amounts in thousands of U.S. Dollars)
  
2021
   
2020
 
Net cash flow used in operating activities
   (89,452)    (132,076)    42,624    (32%) 
Net cash flow provided by (used in) investing activities
   41    (2,232)    2,273    (102%) 
Net cash flow (used in) provided by financing activities
   (103)    149,624    (149,726)    (100%) 
Effect of exchange rate changes on cash and cash equivalents
   (8,643)    12,834    (21,477)    (167%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Net (decrease) increase in cash and cash equivalents
  
 
(98,157
) 
  
 
28,150
 
  
 
(126,307
) 
  
 
(449
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Operating Activities
Our net cash flows used in operating activities were $89.5 million and $132.1 million during the nine months ended September 30, 2021 and 2020, respectively. Our net cash flows used in operating activities decreased by $42.6 million, or 32%, mainly due to cost containment measures and the decrease in personnel expenses related to the workforce reduction as part of our global restructuring plan. Cash flows used in operating activities for the nine months ended September 30, 2021 includes restructuring costs paid for $7.0 million.
Investing Activities
Our net cash flows provided by investing activities were $41,000 during the nine months ended September 30, 2021 and net cash flows used in investing activities were $2.2 million during the nine months ended September 30, 2020, respectively. Those investments were mainly for our industrial machinery and equipment, which are commissioned in order to support the commercialization of Viaskin Peanut, if approved.
Financing Activities
Our net cash flows used in financing activities were $103,000 during the nine months ended September 30, 2021 and net cash flows provided by financing activities were $149.6 million during the nine months ended September 30, 2020. Financing activities consisted mainly of our underwritten global offering in the first quarter of 2020.
Cash and Funding Sources
On September 30, 2021, we had $98.2 million in cash and cash equivalents compared to $221.4 million and $196.4 million of cash and cash equivalents on September 30, 2020 and December 31, 2020, respectively. We have incurred net losses and negative cash flows from operations in each year since our inception. Substantially all of our net losses resulted from costs incurred in connection2021, filed with our development programs and from general and administrative expenses associated with our operations. Net cash used for operating activities was $89.5 million and $132.1 million, respectively, for the nine months ended September 30, 2021 and 2020. For the nine months ended September 30, 2021, we recorded a net loss of $84.1 million.
Since our inception, we have primarily funded our operations with equity financings, and, to a lesser extent, public assistance aimed at supporting innovation and payments associated with French administration on research tax credits (Credit Impot Recherche). We do not generate product revenue and continue to prepare for the potential launch of our first product in the United States and in the European Union, if approved.
During the nine months ended September 2021 and 2020, we obtained the following financing on the public markets by issuance of securities, net of commissions and estimated offering expenses:
   
Equity
 
  
capital
 
(Amounts in thousands of U.S. Dollars)
  
Nine months ended September 30, 2020
  $150,010 
Nine months ended September 30, 2021
   —   
  
 
 
 
Total
  $
150,010

 
  
 
 
 
28
Table of Contents
We have not incurred any bank debt.
Based on our current assumptions, we expect that our current cash and cash equivalents will support our operations into the third quarter of 2022.
Capital Expenditures
As all the clinical research and development expenditures are expensed until marketing authorizations are obtained, the principal investments made over the nine months ended September 30, 2021 and 2020 have been related primarily to the industrial machinery and equipment, which are expected to be commissioned in order to support the commercialization of Viaskin Peanut, if approved and, secondarily, to the acquisition of computer and office equipment.
Funding Requirements
Following receipt of a CRL from the FDA in connection with our BLA for Viaskin Peanut, beginning in August 2020, we scaled down our other clinical programs and
pre-clinical
spend to focus on Viaskin Peanut. We also initiated a global restructuring plan in June 2020 to provide operational latitude to progress the clinical development and regulatory review of Viaskin Peanut in the United States and European Union.
Based on our plans to address the guidance received from the FDA in January 2021 and additional feedback received in October 2021 regarding the protocol for STAMP, and our expected cost savings from implementation of the global restructuring plan, we expect that our current balance of cash and cash equivalents of $98.2 million as of September 30, 2021 will be sufficient to fund our operations into the third quarter of 2022. As of the date of the filing, our available cash is not projected to be sufficient to support our operating plan for the next 12 months. As such, there is substantial doubt regarding the Company’s ability to continue as a going concern.
We intend to seek additional capital as we prepare for the launch of Viaskin Peanut, if approved, and continue other research and development efforts. We may seek to finance our future cash needs through a combination of public or private equity or debt financings, collaborations, license and development agreements and other forms of
non-dilutive
financings. On June 30, 2021, we filed a registration statement on
Form S-3 with
the U.S. Securities and Exchange Commission or SEC, utilizing a shelf registration process. Under this shelf registration process, we may offer our ordinary shares, ordinary shares in the form of ADSs or any combination thereof from time to time in one or more offerings up to a total aggregate offering price of $250,000,000.
We cannot guarantee that we will be able to obtain the necessary financing to meet our needs or to obtain funds at attractive terms and conditions, including as a result of disruptions to the global financial markets due to the ongoing
COVID-19
pandemic. The ongoing
COVID-19
pandemic has already caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks for us, including reduced ability to raise additional capital when needed and(“SEC”) on acceptable terms, if at all.March 9, 2022.
Contractual Obligations and Other Commitments
There have been no material changes in our contractual obligations and commitments from those disclosed in the Annual Report.
Off-Balance
Sheet Arrangements
We have not entered into any
off-balance
sheet arrangements and do not have variable interests in variable interest entities.
Smaller Reporting Company Status
We are a smaller reporting company as defined in the Securities Exchange Act.Act of 1934, as amended. We may, and intend to, take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as we are a smaller reporting company. We may be a smaller reporting company in any year in which (i) the market value of our
voting and
non-voting
ordinary shares held by
non-affiliates
held
by non-affiliates is
less than $250.0 million measured on the last business day of our second fiscal quarter or (ii) (a) our annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of our
voting and
non-voting
ordinary shares
held by non-affiliates is less
than $700.0 million measured on the last business day of our second fiscal quarter.
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
29As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this item.
20
Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our market risks have not changed materially from those disclosed in Item 7A of the Annual Report.
Item 4.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Based on itstheir evaluation as of September 30, 2021,March 31, 2022, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures (as defined in Rule
13a-15(e)
and 15d-15(e) under the Exchange Act) were effective to provide reasonable assurance that (i) the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules
13a-15(d)
or
15d-15(d)
of the Exchange Act during the period covered by this Quarterly Report on Form
10-Q
that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitation on Effectiveness of Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and
procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies and procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error of fraud may occur and not be detected.
 
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PART II – Other informationInformation
Item 1.
Item 1. Legal Proceedings
See “Note 2: Significant Events and Transactions – Legal Proceedings” in the notes to the condensed consolidated financial statements included elsewhere in this Report.
Item 1A.
Risk Factors
Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and trading price of our securities. In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors described in Part I, Item 1A. “ Risk Factors
Factors” of our Annual Report. There have been no material changes in our risk factors from those disclosed in the Annual Report.
Item 2.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2022, we did not grant any stock options and restricted stock units to employees in France and in the United States.
During the three months ended March 31, 2022, we issued an aggregate of 775 ordinary shares to a non-U.S. employee upon settlement of RSUs.
None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe these transactions were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Regulation S promulgated under Section 5 of the Securities Act, as transactions by an issuer not involving any public offering or as offerings made to
non-U.S.
resident employees pursuant to an employee benefit plan established and administered in accordance with the law of a country other than the United States (namely, the Republic of France) and in accordance with that country’s practices and documentation. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising.
Item 3.
Defaults Upon Senior Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Mine Safety Disclosures
Not applicable.
 
Item 5.
Other Information
31None
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Table of Contents
Item 6. Exhibits.
Exhibit Index
 
Exhibit
  
Description
  
Incorporated by Reference
      
Schedule
/ Form
  
File
Number
  
Exhibit
  
File
Date
    3.1  By-laws (statuts) of the registrant (English translation)    
  31.1  Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amendedAmended        
  31.2  Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended        
  32.1*  Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, as amended        
101.INS  Inline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document        
101.SCH  Inline XBRL Taxonomy Extension Schema Document        
101.CAL  Inline XBRL Taxonomy Extension Calculation Linkbase Document        
101.DEF  Inline XBRL Taxonomy Extension Definition Linkbase Document        
101.LAB  Inline XBRL Taxonomy Extension Labels Linkbase Document        
101.PRE  Inline XBRL Taxonomy Extension Presentation Linkbase Document        
104  Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101.        
 
*
Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, (whether made before or after the date of the
Form
10-Q),
irrespective of any general incorporationincorporate language contained in such filing.
 
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrantregistration has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
  
DBV Technologies S.A.
(Registrant)
Date: October 26, 2021May     , 2022  By: /s/
/s/ Daniel Tassé
   Daniel Tassé
   
Chief Executive Officer
   
(Principal Executive Officer)
Date: October 26, 2021May     , 2022  By: /s/
/s/ Sébastien Robitaille
   Sébastien Robitaille
   
Chief Financial Officer
   
(Principal Financial and Accounting Officer)
24