SEC Form 10-Q filed by HOOKIPA Pharma Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________________ to ________________.
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Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
The |
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 | ☐ |
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| Accelerated filer | ☐ |
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| Smaller reporting company | |||
Emerging growth Company |
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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
As of August 5, 2024, the registrant had
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:
● | the success, cost and timing of our product development activities and clinical trials; |
● | there is substantial doubt regarding our ability to continue as a going concern; |
● | the timing, scope or likelihood of regulatory filings and approvals, including timing of Investigational New Drug Application and Biological Licensing Application filings for our current and future product candidates, and final U.S. Food and Drug Administration, European Medicines Agency or other foreign regulatory authority approval of our current and future product candidates; |
● | our ability to develop and advance our current product candidates and programs into, and successfully complete, clinical studies; |
● | our manufacturing, commercialization and marketing capabilities and strategy; |
● | the potential benefits of and our ability to maintain our collaboration with Gilead Sciences, Inc. and establish or maintain future collaborations or strategic relationships or obtain additional funding; |
● | the rate and degree of market acceptance and clinical utility of our current and future product candidates; |
● | our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering our non-replicating and replicating technologies and the product candidates based on these technologies, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights; |
● | future agreements with third parties in connection with the commercialization of our product candidates and any other approved product; |
● | regulatory developments in the United States and foreign countries; |
● | competitive companies and technologies in our industry and the success of competing therapies that are or may become available; |
● | our ability to attract and retain key scientific or management personnel; |
● | our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates; |
● | the accuracy of our estimates of our annual total addressable market, future revenue, expenses, capital requirements and needs for additional financing; |
● | our expectations about market trends; |
● | our ability to comply with Nasdaq listing rules; and |
● | our expectations regarding the period during which we qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012, as amended. |
All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the Securities and Exchange Commission could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.
Investors and others should note that we announce material financial information to our investors using our investor relations website (https://ir.hookipapharma.com/), Securities and Exchange Commission filings, press releases, public conference calls and webcasts. We use these channels, as well as social media, to communicate with our members and the public about our company, our services and other issues. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the U.S. social media channels listed on our investor relations website.
Table of Contents
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
HOOKIPA PHARMA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share amounts)
June 30, |
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2024 | 2023 | |||||
Assets |
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Current assets: |
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Cash and cash equivalents | $ | | $ | | ||
Accounts receivable |
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Receivable research incentives | | | ||||
Prepaid expenses and other current assets |
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Total current assets |
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Non-current assets: |
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Restricted cash | | | ||||
Property, plant and equipment, net |
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Operating lease right of use assets |
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Prepaid expenses and other non-current assets |
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Total non-current assets |
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Total assets | $ | | $ | | ||
Liabilities and Stockholders’ Equity |
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Current liabilities |
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Accounts payable | $ | | $ | | ||
Deferred revenues |
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Operating lease liabilities, current | | | ||||
Accrued expenses and other current liabilities |
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Loans payable, current | — | | ||||
Total current liabilities |
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Non-current liabilities |
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Operating lease liabilities, non-current |
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Deferred revenues, non-current |
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Other non-current liabilities |
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Total non-current liabilities |
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Total liabilities |
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Commitments and contingencies (Note 13) |
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Stockholders’ equity: |
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Preferred stock, $ | | | ||||
Common stock, $ |
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Class A common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
HOOKIPA PHARMA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
(In thousands, except share and per share amounts)
| Three months ended June 30, |
| Six months ended June 30, | |||||||||
2024 |
| 2023 | 2024 |
| 2023 | |||||||
$ | | $ | | $ | | $ | | |||||
Operating expenses: |
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Research and development |
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General and administrative |
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Restructuring | ( | — | ( | — | ||||||||
Total operating expenses |
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Loss from operations |
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Other (expense) income: |
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Grant income | $ | | $ | | $ | | $ | | ||||
Interest income |
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Interest expense |
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Other (expense) income, net |
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Total other income, net |
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Net loss before tax |
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Income tax expense |
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Net loss |
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Other comprehensive loss: |
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Foreign currency translation gain (loss), net of tax |
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Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Net loss per share — basic and diluted(1) | ( | ( | $ | ( |
(1) Share and per share amounts have been restated to reflect the one-for-ten reverse stock split effected in July 2024 on a retroactive basis for all periods presented.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
HOOKIPA PHARMA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (UNAUDITED)
(In thousands, except share amounts)
Accumulated | |||||||||||||||||||||||||||
Convertible | Common Stock | Additional | Other | Total | |||||||||||||||||||||||
Preferred Stock | Common Stock(1) | Class A Common Stock | Paid-In | Comprehensive | Accumulated | Stockholders’ | |||||||||||||||||||||
| Shares |
| Amount | Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Loss |
| Deficit |
| Equity | |||||||||
Balances as of December 31, 2023 | | | | | | | | ( | ( | | |||||||||||||||||
Foreign currency translation adjustment, net of tax | — | — | — | — | — | — | — | | — | | |||||||||||||||||
Stock-based compensation income | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||
Net income | — | — | — | — | — | — | — | — | | | |||||||||||||||||
Balances as of March 31, 2024 | | $ | | | $ | |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||||||
Foreign currency translation adjustment, net of tax | — | — | — | — | — | — | — | | — | | |||||||||||||||||
Stock-based compensation income | — | — | — | — | — | — | | — | — | | |||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||
Balances as of June 30, 2024 | | $ | | | $ | |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||||||
Balances as of December 31, 2022 | | | | | | | | ( | ( | | |||||||||||||||||
Issuance of common stock upon exercise of stock options | — | — | | | — | — | | — | — | | |||||||||||||||||
Foreign currency translation adjustment, net of tax | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | | — | — | | |||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||
Balances as of March 31, 2023 | | $ | | | $ | |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||||||
Conversion of Series A convertible preferred stock to common stock | ( | ( | | | — | — | ( | — | — | — | |||||||||||||||||
Conversion of Series A-1 convertible preferred stock to common stock | ( | ( | | | — | — | ( | — | — | — | |||||||||||||||||
Issuance of Series A-2 convertible preferred stock upon public offering at per share for cash, net of issuance costs of $ | | | — | — | — | — | | — | — | | |||||||||||||||||
Issuance of common stock upon public offering at $ | — | — | | | — | — | | — | — | | |||||||||||||||||
ATM costs | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||
Foreign currency translation adjustment, net of tax | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | | — | — | | |||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||
Balances as of June 30, 2023 | | $ | | | $ | |
| | $ | | $ | | $ | ( | $ | ( | $ | |
(1) All share amounts in this column, including appropriate reclassifications between common stock and additional paid-in capital, have been restated to reflect the
-for-ten reverse stock split effected in July 2024 on a retroactive basis for all periods presented.The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
HOOKIPA PHARMA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Six months ended June 30, | ||||||
| 2024 |
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Operating activities: | ||||||
Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Stock-based compensation expense |
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Depreciation and amortization expense |
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Other non-cash items |
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Changes in operating assets and liabilities: | ||||||
Accounts receivable |
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Receivable research incentives | ( | ( | ||||
Prepaid expenses and other current assets |
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Prepaid expenses and other non-current assets |
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Accounts payable |
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Deferred revenues |
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Operating lease liabilities | ( | ( | ||||
Accrued expenses and other liabilities | ( | | ||||
Other non-current liabilities |
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Net cash used in operating activities |
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Investing activities: | ||||||
Purchases of property and equipment |
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Net cash used in investing activities |
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Financing activities: | ||||||
Proceeds from issuance of convertible preferred stock, net of issuance costs | — | | ||||
Proceeds from issuance of common stock, net of issuance costs |
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Payments for deferred offering costs | ( | ( | ||||
Repayments of borrowings | ( | ( | ||||
Net cash (used in) provided by financing activities |
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Net (decrease) increase in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash at beginning of period |
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Effect of exchange rate changes on cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash at end of period | $ | | $ | | ||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest | $ | ( | $ | ( | ||
Cash paid for income taxes | $ | ( | $ | ( | ||
Supplemental disclosure of non-cash financing activities: | ||||||
Property and equipment additions in accounts payable and accrued expenses | $ | ( | $ | ( | ||
Lease assets obtained in exchange for new operating lease liabilities | $ | | $ | — |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Nature of the business and organization
HOOKIPA Pharma Inc. (“HOOKIPA” or the “Company”) is a clinical stage biopharmaceutical company developing a new class of immunotherapeutics based on its proprietary arenavirus platform that is designed to reprogram the body’s immune system.
The Company was incorporated under the name of Hookipa Biotech, Inc. under the laws of the State of Delaware in February 2017 as a fully-owned subsidiary of Hookipa Biotech AG. In June 2018, the Company changed its name from Hookipa Biotech, Inc. to HOOKIPA Pharma Inc. and in order to effectuate the change of the jurisdiction of incorporation, the Company acquired all of the shares of Hookipa Biotech AG, now HOOKIPA Biotech GmbH. HOOKIPA is headquartered in New York, with European research and preclinical development operations headquartered in Vienna, Austria. In April 2019, the Company closed its initial public offering (“IPO”) and its common stock is currently traded on the Nasdaq Capital Market under the ticker symbol “HOOK”.
The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the ability to establish clinical- and commercial-scale manufacturing processes and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities and may not ultimately lead to a marketing approval and commercialization of a product. Even if the Company’s drug development efforts are successful, it is uncertain if and when the Company will realize significant revenue from product sales.
2. Summary of significant accounting policies
Basis of presentation
The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.
The consolidated balance sheet as of December 31, 2023 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying condensed consolidated balance sheet as of June 30, 2024, the condensed consolidated statements of operations, and comprehensive loss for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statement of convertible preferred stock and stockholders’ equity for the three and six months ended June 30, 2024 and 2023 and the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023 are unaudited.
The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement for interim reporting. Certain information and footnote disclosures typically included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”). The results for any interim period are not necessarily indicative of results for any future period.
5
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Going concern
At each reporting period, in accordance with Accounting Standards Codification ("ASC") 205-40, Going Concern, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company’s evaluation entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs and comparing those needs to the current cash and cash equivalent balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern.
This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the condensed consolidated financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the condensed consolidated financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. In performing its analysis, management excluded certain elements of its operating plan that cannot be considered probable. Under ASC 205-40, the future receipt of potential funding from future partnerships, equity or debt issuances, the potential milestones from the Gilead Collaboration Agreement and potential reductions in force cannot be considered probable at this time because these plans are not entirely within the Company’s control and/or have not been approved by the Board of Directors as of the date of these condensed consolidated financial statements.
Since inception, the Company’s activities have consisted primarily of performing research and development to advance its technologies. The Company is still in the development phase and has not been marketing its technologies to date. Through June 30, 2024, the Company has funded its operations with proceeds from sales of common stock, sales of convertible preferred stock, sales of redeemable convertible preferred stock, collaboration and licensing agreements, grants and borrowings under various agreements with foreign public funding agencies. Since inception, the Company has incurred recurring losses, including a net loss of $
These condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The condensed consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.
6
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Reverse stock split
On July 9, 2024, the Company effected a reverse stock split of the outstanding shares of its common stock on a one-for-ten (
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue, income and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the recognition of revenue and income, the accrual of research and development expenses and general and administrative expenses, the present value of lease right of use assets and corresponding liabilities, the valuation of stock-based awards, the valuation of current loans payable, the impairment of long-lived assets and going concern. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts and experience.
As of the date of issuance of these unaudited condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update estimates, judgments or revise the carrying value of any assets or liabilities. Actual results may differ from those estimates or assumptions.
Deferred offering costs
The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of an equity financing, these costs are recorded in stockholders’ equity as a reduction of the additional paid-in capital on a pro-rata basis generated as a result of the offering. Should the in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the condensed consolidated statements of operations and comprehensive loss.
Concentrations of credit risk and of significant suppliers
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents and short-term bank deposits held with banks in excess of publicly insured limits. For the three
7
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
and six months ended June 30, 2024 and June 30, 2023 the net proceeds from the Company’s offerings have been deposited in interest-bearing bank accounts with two of the largest investment grade U.S. financial institutions and have been partially invested in money market funds. The money market funds, held in U.S. dollars, are primarily invested in U.S. and foreign short-term debt obligations. As of June 30, 2024 and December 31, 2023, the Company’s cash and cash equivalents included smaller amounts of cash balances held in accounts with regional European banks at the Company’s Austrian subsidiary, partially in euros. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.
The Company relies, and expects to continue to rely, on a small number of vendors to manufacture supplies and raw materials for its development programs. These programs could be adversely affected by a significant interruption in these manufacturing services or the availability of raw materials.
As of June 30, 2024 Gilead Sciences, Inc. (“Gilead”) accounted for the majority of the accounts receivable balance. As of December 31, 2023, Gilead and F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc. (together “Roche”) accounted for the majority of the accounts receivable balance. For the three months ended June 30, 2024 Gilead and Roche accounted for the majority of the Company’s revenues. For the six months ended June 30, 2024 Roche accounted for the majority of the Company’s revenues as a result of a contract modification and the recognition of upfront and milestone payments previously recorded as deferred revenues. For the three and six months ended June 30, 2023 Gilead and Roche accounted for the majority of the Company’s revenues. Other customers accounted for less than 10.0% of accounts receivable or net revenues. The Company monitors the financial performance of its customers so that it can appropriately respond to changes in their credit-worthiness. To date, the Company has not experienced any significant losses with respect to collection of its accounts receivable.
Cash equivalents
The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. As of June 30, 2024 and December 31, 2023, cash equivalents consisted of money market funds and short-term deposits.
Fair value measurements
Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
● | Level 1 - Quoted prices in active markets for identical assets or liabilities. |
● | Level 2 - Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. |
● | Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
The Company’s cash equivalents are carried at fair value, determined according to the fair value hierarchy described above (see Note 5).
8
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Property and equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset as follows:
| Estimated useful life | |
Leasehold improvements |
| shorter of useful life or term of lease |
Laboratory equipment |
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Furniture and fixtures |
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Computer equipment and software |
|
Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated once placed into service. Expenditures for repairs and maintenance are charged to expense as incurred. When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations.
Leases
The determination whether an arrangement qualifies as a lease is made at contract inception. A lease qualifies as a finance lease if any of the following criteria are met at the inception of the lease: (i) there is a transfer of ownership of the leased asset to the Company by the end of the lease term, (ii) the Company holds an option to purchase the leased asset that it is reasonably certain to exercise, (iii) the lease term is for a major part of the remaining economic life of the leased asset, (iv) the present value of the sum of lease payments equals or exceeds substantially all of the fair value of the leased asset, or (v) the nature of the leased asset is specialized to the point that it is expected to provide the lessor no alternative use at the end of the lease term. All other leases are recorded as operating leases and are included in right of use (“ROU”) assets and lease liabilities in the consolidated balance sheets. For leases with an initial term of 12 months or less, the Company does not recognize a right of use asset or lease liability. These short-term leases are expensed on a straight-line basis over the lease term.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The Company uses the implicit rate when readily determinable and uses its incremental borrowing rate when the implicit rate is not readily determinable based upon the information available at the commencement date in determining the present value of the lease payments. The incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease. The lease payments used to determine ROU assets may include lease incentives, stated rent increases and escalation clauses linked to rates of inflation when determinable and are recognized as ROU asset on the consolidated balance sheet. In addition, certain of the Company’s arrangements contain lease and non-lease components. The Company generally separates lease payments from non-lease payments. Operating leases are reflected in operating lease assets, in current operating lease liabilities and non-current operating lease liabilities in the consolidated balance sheets. Finance leases are reflected in finance lease assets, in accrued expenses and other current liabilities and in other non-current operating lease liabilities in the consolidated balance sheets. The ROU asset is tested for impairment in accordance with ASC 360.
Capitalized Software Development Cost
The Company capitalizes certain implementation costs for internal-use software incurred in a cloud computing agreement that is a service contract. Eligible costs associated with cloud computing arrangements, such as software
9
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
business applications used in the normal course of business, are capitalized in accordance with ASC 350. These costs are recognized on a straight-line basis in the same line item in the statement of operations and comprehensive loss as the expense for fees for the associated cloud computing arrangement, over the term of the arrangement, plus reasonably certain renewals.
Restructuring
Costs and liabilities associated with restructuring activities are recognized when the actions are probable and estimable, which is when management approves the associated actions. Employee-related severance charges are recognized at the time of communication to employees.
Revenue recognition from collaboration and licensing
The Company recognized revenue from collaboration and license agreements with Gilead and Roche.
Under the collaboration and license agreement with Gilead (as amended and restated, the “Gilead Collaboration Agreement”), the parties agreed to collaborate with respect to
Under the research collaboration and license agreement with Roche (the “Roche Collaboration Agreement”), the Company agreed to conduct research and early clinical development through Phase 1b for HB-700, a novel investigational arenaviral immunotherapy for the treatment of KRAS-mutated cancers. The Roche Collaboration Agreement also included an obligation of the Company to deliver a specified package of preclinical data and results with respect to a second program, targeting undisclosed cancer antigens (collectively “UCAs”) and an option for Roche to license the UCA program. The Company’s performance obligations under the terms of the Roche Collaboration Agreement included
10
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
The Company evaluates its collaboration and licensing arrangements pursuant to ASC 606 Revenue from Contracts with Customers. To determine the recognition of revenue from arrangements that fall within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.
Under ASC 606, the Company applies significant judgement to evaluate whether the promises under the collaboration and licensing arrangements represent separate or one or more combined performance obligations, the allocation of the transaction price to identified performance obligations, the timing of revenue recognition, whether the UCA Option constitutes a material right, and the determination of when milestone payments are probable of being received.
Upfront payment and program initiation fee
The non-refundable upfront-payment received by the Company upon signing of the Gilead Collaboration Agreement, and milestone payments that were linked to future performance obligations, were initially recorded as deferred revenue and allocated between the
The non-refundable program initiation payment received from Gilead upon signing of the Restated Collaboration Agreement was also initially recorded as deferred revenue and is recognized on a percent of completion basis using total estimated research and development costs (input method) for the performance of the obligations. The percent of completion basis using research and development costs was considered the best measure of progress in which control of the performance obligations transfers to the customer, due to the immediate benefit that it adds to the value of the customer’s rights on the program, the short time intervals in which development results are shared and the nature of the work being performed.
The non-refundable upfront-payment received by the Company upon signing of the Roche Collaboration Agreement was initially recorded as deferred revenue and allocated between the HB-700 program and the UCA program. Such amounts were recognized as revenue over the performance period of the respective services on a percent of completion basis using total estimated research and development costs (input method) for each of the obligations during the initial term of the contract. The percent of completion basis using research and development costs was considered the best measure of progress in which control of the performance obligations transfers to the customer.
Reimbursement for services
Under the Gilead Collaboration Agreement and historically under the Roche Collaboration Agreement prior to termination, the Company incurs employee expenses as well as external costs for research, manufacturing and clinical trial activities presented as operating expenses or prepaid expenses. Based on the nature of the Company's responsibilities under the collaboration arrangements, reimbursement of those costs are presented as revenue and not deducted from expenses, as the Company controls the research activities. Amounts of consideration allocated to the performance of research or manufacturing services are recognized over the period in which services are performed. Reimbursements for external costs are recognized as revenues as progress is achieved. Unpaid reimbursement amounts are presented as Accounts Receivable.
11
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Research and development milestones
The Gilead Collaboration Agreement includes, and the Roche Collaboration Agreement included, contingent milestone payments related to specified preclinical and clinical development milestones. These milestone payments represent variable consideration that are not initially recognized within the transaction price as they are fully constrained under the guidance in ASC 606, due to the scientific uncertainties and the required commitment from Gilead and Roche. While no further milestone payments are expected under the terminated Roche Collaboration Agreement, the Company will continue to assess the probability of significant reversals for any amounts that become likely to be realized under the Gilead Collaboration Agreement prior to including the variable consideration associated with these payments within the transaction price.
Sales-based milestones and royalty payments
The Gilead Collaboration Agreement also includes, and the Roche Collaboration Agreement included, certain sales-based milestone and royalty payments upon successful commercialization of a licensed product. In accordance with ASC 606-10-55-65 Sales Based or Usage Based Royalties, the Company recognizes revenues from sales-based milestone and royalty payments at the later of (i) the occurrence of the subsequent sale; or (ii) the performance obligation to which some or all of the sales-based milestone or royalty payments has been allocated has been satisfied. The Company anticipates recognizing these milestones and royalty payments if and when subsequent sales are generated from a licensed product by the collaboration partner.
Cost to fulfill contracts
The Company incurs costs for personnel, supplies and other costs related to its laboratory operations as well as fees from third parties and license expenses in connection with its research and development obligations under collaboration and licensing agreements. These costs are recognized as research and development expenses over the period in which services are performed. Sublicense fees triggered by the receipt of payments are capitalized as an asset when the obligation to pay the fee arises. The capitalized asset is amortized over the period in which the revenue from the triggering payment is recognized.
Recent accounting pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued final guidance in ASU No. 2023-09, Income Taxes (ASC 740): Improvements to Income Tax Disclosures requiring entities to provide additional information in the rate reconciliation and disclosures about income taxes paid. For public business entities, the guidance is effective for annual periods beginning after December 15, 2024. The Company does not expect this ASU to have a material impact on the consolidated financial statements.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which requires public entities to disclose significant segment expenses regularly provided to the chief operating decision-maker. Public entities with a single reporting segment have to provide all disclosures required by ASC 280, including the significant segment expense disclosures. For public business entities, the guidance is effective for annual periods beginning after December 15, 2024. The Company does not expect this ASU to have a material impact on the consolidated financial statements.
12
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
3. Collaboration and Licensing Agreements
Gilead Collaboration and License Agreement
In June 2018, the Company entered into the Gilead Collaboration Agreement whereby the Company and Gilead agreed to collaborate with respect to
Under the Gilead Collaboration Agreement, the Company granted Gilead an exclusive, royalty-bearing license to the Company’s technology platforms. Upon entering into the agreement in June 2018, the Company received a non-refundable $
The $
In the three months ended June 30, 2024, the Company recognized $
In the six months ended June 30, 2024, the Company recognized $
Sublicense fees payable to certain licensors of technologies upon the receipt of the deferred upfront and milestone payments, were capitalized as a contract asset and will be amortized over the period in which the revenue from the triggering payment is recognized. As of June 30, 2024 and December 31, 2023, the contract asset relating to the sublicense payment was $
13
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Roche Collaboration and License Agreement
In October 2022, the Company entered into the Roche Collaboration Agreement whereby the Company and Roche agreed to collaborate with respect to the development of novel arenaviral immunotherapies for KRAS-mutated cancers and, potentially, a second, novel arenaviral immunotherapeutic program targeting specific undisclosed cancer antigens. In January 2024, Roche provided written notice of the termination of the Roche Collaboration Agreement to the Company. The termination was made according to Roche’s right to terminate without cause, acknowledging that the Company had met all go-forward criteria under the agreement. Pursuant to the terms of the Roche Collaboration Agreement, following the termination notice, the Roche Collaboration Agreement terminated on April 25, 2024.
Under the terms of the original Roche Collaboration Agreement, the Company had granted Roche an exclusive, royalty-bearing license to the Company’s technology platforms for KRAS-mutated cancers, and an option right to exclusively license a second, novel arenaviral immunotherapeutic program targeting undisclosed cancer antigens. Upon the termination effective date of April 25, 2024, the Company regained full control of the associated intellectual property portfolio and full collaboration and licensing rights for this program.
Upon signing the Roche Collaboration Agreement in October 2022, the Company received a non-refundable upfront payment of $
The Company considered the termination by Roche as a contract modification of the combined performance obligations and the transaction price. The modification was accounted for on a cumulative catch-up basis, applying the revised percent of completion to the revised transaction price, resulting in an immediate increase of revenue in the period of the modification. The transaction price was recognized as revenue over the remaining performance period using updated total estimated research and development costs. The remaining liability included in deferred revenues was recognized in the three months ended June 30, 2024.
In the three months ended June 30, 2024, the Company recognized revenues of $
In the six months ended June 30, 2024, the Company recognized revenues of $
Sublicense fees payable to certain licensors of technologies upon the receipt of the deferred upfront and milestone payments, were capitalized as a contract asset and will be amortized over the period in which the revenue from the triggering payment is recognized. As of June 30, 2024 there was
14
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
4. Restructuring
On January 29, 2024, the Company announced and began implementing its decision to prioritize the clinical development of its eseba-vec (formerly HB-200) program for the treatment of HPV16+ head and neck cancers and its two Gilead-partnered infectious disease programs and to pause development activities related to HB-300 and most of its preclinical research activities. In connection with this strategic refocus, the Company’s board of directors approved a restructuring plan to rebalance the Company’s cost structure, which includes a reduction of the Company’s workforce by approximately
As a result of the restructuring plan, the Company incurred the following charges which were included within Restructuring in the condensed consolidated statements of operations and comprehensive loss.
The following table summarizes the effect of the restructuring charges (in thousands):
Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2024 |
| 2023 | 2024 |
| 2023 | ||||||
Severance and other personnel expenses | | — | | — | ||||||||
Professional fees and other related charges | | — | | — | ||||||||
Total | $ | | $ | — | $ | | $ | — |
There was no restructuring liability as of June 30, 2024.
5. Fair Value of Financial Assets
The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicating the level of the fair value hierarchy utilized to determine such fair values (in thousands):
Fair Value Measurement at June 30, 2024 | ||||||||||||
| Level 1 |
| Level 2 |
| Level 3 | Total | ||||||
Cash equivalents: | ||||||||||||
Money market funds | $ | |
| $ | — |
| $ | — | $ | | ||
Total | $ | |
| $ | — |
| $ | — | $ | |
Fair Value Measurement at December 31, 2023 | ||||||||||||
| Level 1 |
| Level 2 |
| Level 3 | Total | ||||||
Cash equivalents: | ||||||||||||
Money market funds | $ | |
| $ | — |
| $ | — | $ | | ||
Total | $ | |
| $ | — |
| $ | — | $ | |
During the six months ended
15
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
6. Property, plant and equipment, net
Property, plant and equipment, net consisted of the following (in thousands):
June 30, |
| December 31, | ||||
| 2024 |
| 2023 | |||
Land | $ | | $ | | ||
Leasehold improvements | | | ||||
Construction in progress | | | ||||
Laboratory equipment |
| |
| | ||
Furniture and fixtures |
| |
| | ||
Computer equipment and software |
| |
| | ||
Property and equipment, gross |
| |
| | ||
Less: Accumulated depreciation |
| ( |
| ( | ||
Property and equipment, net | $ | | $ | |
7. Receivable research incentive
The Company participates in a research incentive program provided by the Austrian government under which it is entitled to reimbursement of a percentage of qualifying research and development expenses and capital expenditures incurred in Austria. Submissions for reimbursement under the program are submitted annually. Incentive amounts are generally paid out during the calendar year that follows the year of the expenses but remain subject to subsequent examinations by the responsible authority. Reimbursements received in excess of the recognized receivable research incentive for a certain period are recorded within other long-term liabilities for potential repayment until such time that an audit has taken place, upon expiration of the potential reclaim period, or when it is no longer probable that a reclaim will happen. The years 2018 to present remain open to examination by the authorities.
Furthermore, the Company participated in the life sciences research and development program provided by the New York State government under which it was entitled to reimbursement of a percentage of qualifying research and development expenses in New York State up to $
As of June 30, 2024, the Company recognized receivables of $
During the three months ended June 30, 2024 and 2023, the Company recorded $
During the six months ended June 30, 2024 and 2023, the Company recorded $
16
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
operations and comprehensive loss as part of the grant income related to the Austrian incentive program. Research incentives depend on the eligible research and development expenses of the respective period.
8. Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
June 30, |
| December 31, | ||||
| 2024 |
| 2023 | |||
Salaries and bonuses |
| |
| | ||
Social security contributions |
| |
| | ||
Unearned grant income (current) |
| — |
| | ||
Accrued external research and development expenses | | | ||||
Accrued external general and administration expenses | | | ||||
Accrued for property and equipment acquisitions | — | | ||||
Income taxes | | | ||||
Other accruals and liabilities |
| |
| | ||
$ | | $ | |
9. Loans payable
As of June 30, 2024 and December 31, 2023, loans payable consisted of the following (in thousands):
June 30, |
| December 31, | ||||
| 2024 |
| 2023 | |||
Loans from FFG | $ | — | $ | | ||
Unamortized debt discount |
| — |
| ( | ||
Total loans payable, net | $ | — | $ | |
In connection with the funding agreements with the Austrian Research Promotion Agency, (Österreichische Forschungsförderungsgesellschaft, or “FFG”), the Company has received various loans (“FFG Loans”). The FFG Loans were made on a project-by-project basis.
The FFG Loans bear interest at rates that are below market rates of interest. The Company accounted for the imputed benefit arising from the difference between an estimated market rate of interest and the rate of interest charged by FFG as grant income from FFG. On the date that FFG loan proceeds are received, the Company recognized the portion of the loan proceeds allocated to grant funding as a discount to the carrying value of the loan and as unearned income, which was recognized as grant income over the term of the funding agreement.
As of June 30, 2024, the Company has no outstanding loans payable. A final principal repayment of $
10. Common stock, Class A common stock and convertible preferred stock
The Company’s capital structure consists of common stock, Class A common stock and preferred stock. On July 9, 2024, the Company effected a reverse stock split of the outstanding shares of its common stock on a one-for-ten basis (see Notes 2 and 16). As of June 30, 2024, the Company was authorized to issue
17
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
preferred stock. The Company has designated
On June 5, 2023, the Company closed a public offering of
On February 15, 2022, the Company entered into a stock purchase agreement with Gilead (“Stock Purchase Agreement”), that requires Gilead, at the Company’s option, to purchase up to $
The Company has three series of preferred stock authorized, issued and outstanding as of June 30, 2024: Series A convertible preferred stock, Series A-1 convertible preferred stock and Series A-2 convertible preferred stock. Shares of Series A, Series A-1 and Series A-2 convertible preferred stock may be independently converted into common stock. Holders of Series A, Series A-1 and Series A-2 convertible preferred stock have equal rights, powers and privileges.
Holders of common stock are entitled to
Each holder of Class A common stock has the right to convert each ten shares of Class A common stock into
Holders of common stock and Class A common stock are entitled to receive ratably any dividends declared by the board of directors out of funds legally available for that purpose, subject to any preferential dividend rights of any outstanding preferred stock. Holders of Series A, Series A-1 and Series A-2 preferred stock will be entitled to receive dividends at a rate equal to (on an as-if-converted-to-common stock basis), and in the same form and manner as,
18
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
dividends actually paid on shares of the Company’s common stock. Holders of common stock and Class A common stock have no preemptive rights, conversion rights, or other subscription rights or redemption or sinking fund provisions.
In the event of a liquidation, dissolution, or winding up of the Company, holders of our Series A, Series A-1 and Series A-2 preferred stock will receive a payment equal to $
There were
11. Stock-based compensation
2018 Stock Option and Grant Plan
In June 2018, the Company’s board of directors approved the 2018 Stock Option and Grant Plan. Options granted under the 2018 Stock Option and Grant Plan generally vest over
2019 Stock Option and Incentive Plan
On April 1, 2019, the Company’s stockholders approved the 2019 Stock Option and Incentive Plan, which became effective as of the effective date of the registration statement in connection with the Company’s IPO. The plan provides for the grant of shares of restricted stock, long term incentive awards, stock options or other equity-based awards. As of June 30, 2024, the maximum number of shares of the Company’s common stock that may be issued under the Company’s 2019 Stock Option and Incentive Plan was
On August 7, 2023, the Company’s board of directors approved a one-time offer to eligible non-executive, non-director employees to exchange certain outstanding stock options for new stock options with modified terms. Under the stock option exchange program (the “Offer”), the Company offered to exchange certain out-of-the-money stock options
19
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
for new stock options at an exchange ratio of between
2023 Inducement Plan
On April 7, 2023, the Company’s board of directors adopted the Company’s 2023 Inducement Plan (the “2023 Inducement Plan”) pursuant to which the Company reserved
The following table presents a summary of awards outstanding:
As of June 30, 2024 | ||||||||
| 2018 Plan |
| 2019 Plan |
| Inducement Awards |
| Total | |
Granted and outstanding awards: | ||||||||
Stock options |
| |
| | |
| | |
Total |
| |
| | |
| |
Stock option valuation
The Company estimates the option’s fair value on the date of grant using the Black-Scholes option-pricing model. Black-Scholes utilizes assumptions related to expected term, volatility, the risk-free interest rate, the dividend and employee exercise behavior. Forfeitures are accounted for when they occur. Expected volatilities utilized in the Black-Scholes model are based on historical volatilities of a group of comparable companies. The group of representative companies have characteristics similar to the Company, including the stage of product development and focus on the life science industry. Management believes that this represents the most accurate basis for estimating expected future volatilities under the current conditions. The risk-free interest rate is derived from the yields for U.S. Treasuries with a remaining term approximating the expected life of the options. The expected term represents the period of time that the options granted are expected to be outstanding.
20
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
The following table summarizes the assumptions used in the Black-Scholes option-pricing model for estimating the fair value of stock options granted during:
Three months ended June 30, | Six months ended June 30, | ||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| |
Risk-free interest rate | | % | | % | | % | | % | |
Expected term (in years) |
|
|
|
| |||||
Expected volatility | | % | | % | | % | | % | |
Expected dividends | — | % | — | % | — | % | — | % |
For the 2024 and 2023 grants, the Company used the simplified method in developing an estimate of the expected term due to a lack of historical exercise data.
Stock option activity
The following table summarizes the Company’s stock option activity since January 1, 2024 (in thousands, except share and per share amounts):
Weighted | ||||||||||
Weighted | Average | |||||||||
Average | Remaining | Aggregate | ||||||||
Number of | Exercise | Contractual | Intrinsic | |||||||
| Shares |
| Price |
| Term |
| Value | |||
(in years) | ||||||||||
Outstanding as of December 31, 2023 |
| | $ | |
| $ | | |||
Granted |
| |
| |
|
| ||||
Exercised |
| — |
| — |
|
| ||||
Forfeited |
| ( |
| |
|
| ||||
Outstanding as of June 30, 2024 |
| | $ | |
| $ | | |||
Options exercisable as of June 30, 2024 |
| | $ | |
| $ | | |||
Options unvested as of June 30, 2024 |
| | $ | |
| $ | — |
The aggregate intrinsic value of stock options was calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The fair value per common stock used for calculating the intrinsic values as of June 30, 2024 and December 31, 2023, was $
21
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Stock-based compensation
Stock-based compensation expense was classified in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):
Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Research and development expenses(1) | $ | | $ | | $ | | $ | | ||||
General and administrative expenses(1) |
| |
| |
| |
| | ||||
$ | | $ | | $ | | $ | |
12. Income taxes
Income tax expense during the six months ended June 30, 2024 and June 30, 2023 resulted from minimum tax obligations in Austria, and U.S. federal and state income tax as well as minimum tax obligations in Austria, respectively. During the three and six months ended June 30, 2024 and 2023, the Company recorded
13. Commitments and contingencies
Operating and Finance Leases
The Company leases real estate, including office and laboratory space and has entered into various other agreements with respect to assets used in conducting its business. The Company is required to maintain a cash balance of $
As of June 30, 2024 and December 31, 2023, the Company’s operating lease right-of-use assets were $
22
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Contract manufacturing arrangements
The Company has entered into arrangements with contract manufacturing organizations (“CMOs”) for manufacturing of materials for research and development purposes, including manufacturing of clinical trial materials. These contracts generally provide for non-cancellable obligations or cancellation penalties depending on the time of cancellation. As of June 30, 2024, the Company’s total non-cancellable obligations under contracts with CMOs were $
Intellectual property licenses
The Company has entered into certain license agreements under which it is obligated to make milestone payments upon the achievement of certain development and regulatory milestones, to pay royalties on net sales of licensed products, and to pay a percentage of the sublicense fees which the Company receives from its sublicensees.
In the three and six months ended June 30, 2024, the Company recorded $
Indemnification agreements
In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and senior management that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of June 30, 2024 or December 31, 2023.
Legal proceedings
The Company is not currently a party to any material legal proceedings. From time to time, the Company may become involved in litigation or legal proceedings relating to claims arising in the ordinary course of business. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses the costs related to such legal proceedings as incurred.
23
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
14. Net loss per share
The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders (in thousands, except for per share amounts):
Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Numerator: |
|
|
|
|
|
|
|
| ||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Denominator: |
|
|
|
| ||||||||
Weighted-average common shares outstanding, basic and diluted | | | | | ||||||||
Weighted-average Series A convertible preferred shares outstanding, basic and diluted, presented as if converted into common stock(1) | | | | | ||||||||
Weighted-average Series A-1 convertible preferred shares outstanding, basic and diluted, presented as if converted into common stock(1) | | | | | ||||||||
Weighted-average Series A-2 convertible preferred shares outstanding, basic and diluted, presented as if converted into common stock(1) | | | | | ||||||||
Total number of shares used to calculate net loss per share, basic and diluted |
| |
| |
| |
| | ||||
Net loss per share, basic and diluted | $ | ( | ( | ( | ( |
(1) Class A common stock, Series A, Series A-1 and Series A-2 convertible preferred stock are participating securities that have substantially the same terms and features as the Company’s common stock. The Class A common stock, Series A, Series A-1 and Series A-2 convertible preferred stock is therefore included in the weighted-average number of shares outstanding to calculate net loss per share, basic and diluted as if converted in common stock. Each ten shares of Class A common stock and each share of Series A, Series A-1 and Series A-2 convertible preferred stock is independently convertible into
Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential common shares (common stock and Class A common stock) outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
Three and six months ended June 30, | ||||
| 2024 |
| 2023 | |
Options issued and outstanding |
| | | |
Total |
| |
| |
24
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
15. Related Parties
Effective September 15, 2023, Malte Peters, a member of the Company’s board of directors, agreed to lead the Company’s clinical activities as ad interim Senior Clinical Advisor.
16. Subsequent Events
Reverse stock split
A
-for-ten Reverse Stock Split of the Company’s issued and outstanding shares of common stock was effected on July 9, 2024. Stockholders entitled to fractional shares of common stock as a result of the Reverse Stock Split received a cash payment in lieu of receiving fractional shares of common stock. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the effects of the Reverse Stock Split. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s relative interest in the Company’s equity securities, except for any adjustments for fractional shares. As a result of the Reverse Stock Split, proportionate adjustments were made to the conversion ratio for the Company’s Class A Common Stock and the conversion prices of the Company’s Series A Convertible Preferred Stock, Series A-1 Convertible Preferred Stock and Series A-2 Convertible Preferred Stock. Proportionate adjustments were also made to the number of shares underlying, and the exercise or conversion prices of, the Company’s outstanding stock options and to the number of shares of common stock issuable under the Company’s equity incentive plans. The Reverse Stock Split proportionately reduced the number of authorized shares of the Company’s common stock (see Note 2).Officer and director transitions
On July 22, 2024, the Company appointed Dr. Malte Peters as its
On July 22, 2024, Joern Aldag separated as the Chief Executive Officer of the Company and resigned as a director of the Company on July 23, 2024. In connection with Mr. Aldag’s separation as the Chief Executive Officer of the Company, the Company has agreed to provide Mr. Aldag a severance package consistent with his employment agreement which is expected to include a cash payment of $
25
HOOKIPA PHARMA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Appointment of Sean A. Cassidy as a director
On July 22, 2024, the Company’s board of directors appointed Sean A. Cassidy as a member of the board of directors and as a member of the compensation committee and chair of the audit committee, succeeding Ms. Coelho as chair of the audit committee. Pursuant to the Company’s Non-Employee Director Compensation Policy, Mr. Cassidy was granted an initial stock option to purchase
At-the-Market Offering Program
As previously disclosed, on July 12, 2022, the Company entered into a Sales Agreement with Leerink Partners LLC (“Leerink”), as sales agent, to provide for the issuance and sale by the Company of up to $
On August 8, 2024, the Company entered into an Open Market Sale AgreementSM with Jefferies LLC, as sales agent, to provide for the issuance and sale by the Company of up to $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes for the year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). As a result of many factors, including those factors set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year end December 31, 2023, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.
Overview
We are a clinical-stage biopharmaceutical company developing a new class of immunotherapeutics based on our proprietary arenavirus platform that is designed to target and amplify T cell and immune responses to fight diseases. Our replicating and non-replicating technologies are engineered to induce robust and durable antigen-specific CD8+ T cell responses and pathogen-neutralizing antibodies. We believe that our technologies can meaningfully leverage the human immune system for prophylactic and therapeutic purposes by inducing CD8+ T cell response levels previously not achieved by other immune therapy approaches.
We are building a proprietary immuno-oncology pipeline utilizing our replicating technology. Our oncology portfolio targets oncoviral cancer antigens and next-generation antigens and includes two primary programs in development: eseba-vec (formerly HB-200) and HB-700. Eseba-vec is in clinical development for the treatment of Human Papillomavirus 16-positive (“HPV16+”) head and neck cancers in a Phase 1/2 clinical trial. Eseba-vec in combination with pembrolizumab received Fast Track Designation from the U.S. Food and Drug Administration (“FDA”) in January 2022 and PRIME designation from the European Medicines Agency in April 2024 for the treatment of first-line HPV16+ recurrent/metastatic oropharyngeal squamous cell carcinoma. In April 2024, we received Investigational New Drug (“IND”) clearance from the FDA for HB-700 for the treatment of KRAS mutated cancers, including, lung, colorectal and pancreatic cancers.
Our strategic priority is the development of our oncology portfolio, most importantly the advancement of our Eseba-vec program, and we expect to initiate the AVALON-1 trial, a randomized Phase 2/3 trial of eseba-vec, in the fourth quarter of 2024. Additionally, we are developing infectious disease therapies in partnership with other companies. Our Hepatitis B (“HBV”) program, HB-400, and our Human Immunodeficiency Virus (“HIV”) program, HB-500, are developed in a partnership with Gilead Sciences Inc. (“Gilead”).
Eseba-vec, our first program in oncology, is being evaluated in an ongoing Phase 1/2 clinical trial for the treatment of HPV16+ cancers. This trial is currently enrolling participants in Phase 2, evaluating eseba-vec therapy in combination with pembrolizumab in the first line setting of HPV16+ PD-L1+ oropharynx cancer. Preliminary Phase 2 data presented in June 2024 for 35 evaluable patients treated with the combination showed a 37% confirmed objective response rate (“ORR”), 11% complete response (“CR”) rate, and disease control rate (“DCR”) of 69% per RECIST 1.1 criteria, compared to the historical 19% ORR for pembrolizumab alone. In a subset of 17 evaluable patients with CPS of 20 or higher, the data showed a 53% confirmed ORR, 18% CR rate, and 82% DCR. These patients are representative of the Company’s planned AVALON-1 pivotal Phase 2/3 trial population. Additionally, preliminary PFS for the CPS 20 or higher subgroup was 16.3 months and is encouraging based on the historical PFS data of 3.4 months reported for pembrolizumab alone. The preliminary OS rate was 88% at 9 months, and median OS was unreached as of the cutoff date with 16 of 19 patients still alive. Median follow-up for these patients was 8.4 months. Eseba-vec + pembrolizumab was generally well tolerated. Among the 46 participants treated with the combination, Grade ≥3 treatment-related adverse events (“TRAEs”) were reported in 7 (15%) patients, serious TRAEs in 2 (4%) patients, and TRAEs leading to treatment discontinuation of eseba-vec in 2 (4%) patients. No treatment-related deaths were reported.
HB-700 was designed for treatment of cancers encoding mutated KRAS, especially KRAS-mutated pancreatic, colorectal, and lung cancers. By simultaneously targeting the five most common mutations, we believe HB-700 has the potential to benefit more patients than single mutation inhibitors. The IND application for HB-700 was cleared by the FDA in April 2024.
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In October 2022, we entered into a Research Collaboration and License Agreement (the “Roche Collaboration Agreement”), with Roche to (i) grant Roche an exclusive license to research, develop, manufacture and commercialize our pre-clinical HB-700 cancer program, an arenaviral immunotherapeutic for KRAS-mutated cancers, and (ii) grant Roche an option right to exclusively license for research, development manufacturing and commercialization, a second, novel arenaviral immunotherapeutic program targeting undisclosed cancer antigens. We announced in January 2024 that we received notification from Roche of their decision to terminate the collaboration and licensing agreement for our HB-700 program in KRAS mutated cancers. We have met all go-forward criteria under the agreement. Effective April 25, 2024, we regained full control of the associated intellectual property portfolio and have full collaboration and licensing rights for this program. Pursuant to the Roche Collaboration Agreement, we received a non-refundable upfront payment of $25.0 million, and milestone payments of $20.0 million.
We are collaborating with Gilead Sciences, Inc. (“Gilead”) to research arenavirus functional cures for chronic Hepatitis B and HIV infections under a Collaboration and License Agreement signed in 2018 (the “Gilead Collaboration Agreement”). Both programs have completed preclinical research, and in April 2023 the first participant in a Phase 1 clinical trial of the Hepatitis B product candidate being conducted by Gilead has been dosed. Gilead is solely responsible for further development and commercialization of the Hepatitis B product candidate and we are eligible for up to a further $185.0 million in development and commercialization milestone payments, plus tiered royalties. According to the amendment to the Gilead Collaboration Agreement, signed in February 2022, we have taken on development responsibilities for the HIV program candidate through a Phase 1b clinical trial and Gilead will provide funding through a combination of an initiation payment of $15.0 million, a milestone payment of $5.0 million and equity contributions of up to $35.0 million. In November 2023, we received FDA clearance of our IND application for HB-500 and started the Phase 1b trial in the second quarter of 2024. The first person was dosed on July 1, 2024, resulting in the achievement of a $5.0 million non-dilutive milestone payment which was received on July 25, 2024. Gilead retains the exclusive option, to further develop and commercialize the HIV program, in which case we are eligible for up to a further $227.5 million in developmental and commercialization milestone payments, inclusive of a $10.0 million option exercise payment, plus tiered royalties.
On January 29, 2024, we announced our decision to prioritize the clinical development of our eseba-vec program for the treatment of HPV16+ head and neck cancers and our two Gilead-partnered infectious disease programs and to pause development activities related to HB-300, targeting self-antigens for the treatment of prostate cancer, and most of our preclinical research activities. In connection with this strategic refocus, our Board of Directors approved a plan to reduce our workforce by 55 fulltime employees, or approximately 30% of the then-current employee base, and to rebalance our cost structure in alignment with the new prioritization of research and development programs. The prioritization of our eseba-vec program and our two Gilead-partnered programs also included the discontinuation of our GMP manufacturing facility project. The restructuring was completed by the end of the second quarter of 2024.
We have funded our operations to date primarily from public offerings of common stock and convertible preferred stock, including our initial public offering, as well as private placements of our redeemable convertible preferred stock, grant funding and loans from an Austrian government agency, and upfront, milestone and initiation payments from Gilead and Roche in connection with our respective collaboration and license agreements. As of June 30, 2024 we had cash, cash equivalents and restricted cash of $77.4 million.
We do not expect to generate revenue from any product candidates that we develop until we obtain regulatory approval for one or more of such product candidates, if at all, and commercialize our products or enter into additional collaboration agreements with third parties. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
All of our product candidates, including our most advanced oncology product candidate, eseba-vec, will require substantial additional development time and resources before we would be able to apply for and receive regulatory approvals and begin generating revenue from product sales. Before launching our first products, if approved, we plan to establish our own manufacturing facility to reduce or eliminate our reliance on contract manufacturing organizations (“CMOs”) which will require substantial capital expenditures and cause additional operating expenses. We currently have no marketing and sales organization and have no experience in marketing products; accordingly, we will incur
28
significant expenses to develop a marketing organization and sales force in advance of generating any commercial product sales. As a result, we will need substantial additional capital to support our operating activities. In addition, we expect to continue to incur legal, accounting and other expenses in operating our business, including the costs associated with operating as a public company.
We currently anticipate that we will seek to fund our operations through equity or debt financings or other sources, such as government grants and additional collaboration agreements with third parties. Adequate funding may not be available to us on acceptable terms, or at all. If sufficient funds on acceptable terms are not available when needed, we will be required to significantly reduce our operating expenses and delay, reduce the scope of, or eliminate one or more of our development programs.
Since our inception, we have incurred recurring losses, including net losses of $19.1 million and $4.7 million for the three and six months ended June 30, 2024. As of June 30, 2024, we had an accumulated deficit of $374.0 million and we do not expect positive cash flows from operations in the foreseeable future, if ever. We expect to continue to incur net operating losses for at least the next several years as we advance our product candidates through clinical development, seek regulatory approval, prepare for and, if approved, proceed to commercialization, continue our research and development efforts and invest to establish further commercial manufacturing capacity.
Impacts of Market Conditions on Our Business
Unfavorable conditions in the economy in the United States, Austria and elsewhere may negatively affect the growth of our business and our results of operations. Macroeconomic events and conditions such as heightened inflation, increased interest rates, disruptions to global financial markets or a recession or other market correction, including as a result of the ongoing military conflict between Russia and Ukraine and the related sanctions imposed against Russia, any escalation of the conflict in Israel and the Gaza Strip, and other global macroeconomic factors, could reduce our ability to access capital, which could materially impact our business and the value of our common stock.
Components of Our Results of Operations
Revenue from collaboration and licensing
To date, we have not generated any revenue from product sales and do not expect to do so in the near future, if at all. All of our revenue to date has been derived from research collaboration and license agreements with Gilead and Roche.
Gilead Collaboration Agreement
On June 4, 2018, we entered into the Gilead Collaboration Agreement to evaluate potential vaccine products using or incorporating our replicating technology and non-replicating technology for the treatment, cure, diagnosis or prevention of HBV and HIV.
Under the Gilead Collaboration Agreement, we granted Gilead an exclusive, royalty-bearing license to our technology platform for researching, developing, manufacturing and commercializing products for HIV or HBV. We received a non-refundable $10.0 million upfront payment upon entering the Gilead Collaboration Agreement. In February 2022, we signed an amended and restated collaboration agreement (the “Restated Gilead Collaboration Agreement”) which revised the terms only for the HIV program, whereby we will take on development responsibilities for the HIV program candidate through a Phase 1b clinical trial. Pursuant to the Restated Gilead Collaboration Agreement, Gilead will retain an exclusive right, the Option, to take back the development responsibilities, thus keeping the rights for the HIV program, including further development and commercialization in return for an option exercise payment of $10.0 million. Pursuant to the Restated Gilead Collaboration Agreement, we are eligible for up to $140.0 million in developmental milestone payments for the HBV program and $50.0 million in commercialization milestone payments. If Gilead exercises the Option, we are eligible for up to $172.5 million in developmental milestone payments for the HIV program, inclusive of the $10.0 million Option exercise payment, and $65.0 million in commercialization milestone payments for the HIV program. Upon the commercialization of a product, we are eligible
29
to receive tiered royalties of a high single-digit to mid-teens percentage on the worldwide net sales of each HBV product, and royalties of a mid-single-digit to 10% of worldwide net sales of each HIV product. Gilead is obligated to reimburse us for our costs, including all benefits, travel, overhead, and any other expenses, relating to performing research and development activities under the Restated Gilead Collaboration Agreement with respect to the HBV program, and if the Option is exercised, any manufacturing costs related to the HIV program. Through June 30, 2024, we have received a non-refundable upfront payment of $10.0 million, a program initiation fee of $15.0 million and $21.2 million in milestone payments for the achievement of pre-clinical research milestones from Gilead. On July 1, 2024 the first person was dosed in a Phase 1b clinical trial of HB-500 resulting in the achievement of a $5.0 million non-dilutive milestone payment which was received on July 25, 2024. In addition, we have recognized $42.4 million of cost reimbursements for research and development services performed under the Restated Gilead Collaboration Agreement.
We determined that our performance obligations under the terms of the original Gilead Collaboration Agreement included one combined performance obligation for each of the HBV and HIV research programs, comprised of the transfer of intellectual property rights and providing research and development services. Accordingly, we recognized these amounts as revenue over the performance period of the respective services on a percent of completion basis using total estimated research and development labor hours for each of the performance obligations. The terms of the Restated Gilead Collaboration Agreement added an additional performance obligation to us to perform research and development work for the HIV program. We recognize the amounts of revenue allocated to the performance obligation resulting from the Restated Gilead Collaboration Agreement on a percent of completion basis over the performance period, using total estimated research and development costs as the measure of progress.
Roche Collaboration Agreement
On October 18, 2022, we entered into the Roche Collaboration Agreement to (i) grant Roche an exclusive license to research, develop, manufacture and commercialize our pre-clinical HB-700 cancer program, an arenaviral immunotherapeutic for KRAS-mutated cancers, and (ii) grant Roche an exclusive option right to exclusively license for research, development manufacturing and commercialization, a second, novel arenaviral immunotherapeutic program targeting undisclosed cancer antigens. In January 2024, Roche provided us with written notice of the termination of the collaboration and licensing agreement.
Under the terms of the terminated Roche Collaboration Agreement, we granted Roche an exclusive, royalty-bearing license to our technology platforms for KRAS-mutated cancers, and an option right to exclusively license a second, novel arenaviral immunotherapeutic program targeting undisclosed cancer antigens. Pursuant to the terms of the Roche Collaboration Agreement, following the termination notice, the Roche Collaboration Agreement was terminated on April 25, 2024. Effective April 25, 2024, we regained full control of the associated intellectual property portfolio and have full collaboration and licensing rights for the KRAS program.
Through June 30, 2024, we have received from Roche the non-refundable upfront payment of $25.0 million, $10.0 million in milestone payments for the achievement of a GMP manufacturing milestone under the HB-700 program and $10.0 million in milestone payments associated with an IND submission for the HB-700 program. In addition, we have recognized $0.6 million of cost reimbursements for research and development activities related to a first human trial.
We determined that our performance obligations under the terms of the Roche Collaboration Agreement included one combined performance obligation for the transfer of intellectual property rights (licenses) and providing research and development services for the HB-700 program, and a second, separate performance obligation during the UCA Option period to perform research and development services with respect to the UCA Program. Accordingly, we allocated the non-refundable upfront payment of $25.0 million between the two performance obligations. Milestone payments that were contingent on future events were added to the transaction price when the triggering event became probable. The consideration allocated to a performance obligation has been recognized as revenue over the performance period of the respective services on a percent of completion basis using total estimated research and development costs for each of the performance obligations. Milestone payments, or parts thereof, that related to completed services were reflected via a cumulative catch up for past performance.
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Operating Expenses
Our operating expenses since inception have only consisted of research and development costs, general and administrative costs and restructuring and impairment expenses.
Research and Development Expenses
Since our inception, we have focused significant resources on our research and development activities, including establishing our arenavirus platform, conducting preclinical studies, developing a manufacturing process, conducting Phase 1 and Phase 2 clinical trials, including the ongoing eseba-vec (formerly HB-200) Phase 1/2 trial, and progressing IND applications, including for HB-500 and HB-700. Research and development activities account for a significant portion of our operating expenses. Research and development costs are expensed as incurred. These costs include:
● | salaries, benefits and other related costs, including stock-based compensation, for personnel engaged in research and development functions; |
● | expenses incurred in connection with the preclinical development of our programs and clinical trials of our product candidates, including under agreements with third parties, such as consultants, contractors, academic institutions and contract research organizations (“CROs”); |
● | the cost of manufacturing drug products for use in clinical trials, including under agreements with third parties, such as CMOs, consultants and contractors; |
● | laboratory costs; |
● | leased facility costs, equipment depreciation and other expenses, which include direct and allocated expenses; and |
● | third-party license fees. |
The majority of our research and development costs are external costs, which we track on a program-by-program basis. We do not track our internal research and development expenses on a program-by-program basis as they primarily relate to shared costs deployed across multiple projects under development.
We expect our research and development expenses to increase substantially in the future as we advance our existing and future product candidates into and through clinical trials and pursue regulatory approval. The process of conducting the necessary clinical studies to obtain regulatory approval is costly and time-consuming. Clinical trials generally become larger and more costly to conduct as they advance into later stages and, in the future, we will be required to make estimates for expense accruals related to clinical trial expenses.
At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of any product candidates that we develop from our programs. We are also unable to predict when, if ever, material net cash inflows will commence from sales of product candidates we develop, if at all. This is due to the numerous risks and uncertainties associated with developing product candidates, including the uncertainty of:
● | successful completion of preclinical studies and clinical trials; |
● | sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials; |
● | substantial doubt regarding our ability to continue as a going concern; |
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● | acceptance of INDs for our planned clinical trials or future clinical trials; |
● | successful enrollment and completion of clinical trials; |
● | successful data from our clinical program that support an acceptable risk-benefit profile of our product candidates in the intended populations; |
● | receipt and maintenance of regulatory and marketing approvals from applicable regulatory authorities; |
● | scaleup of our manufacturing processes and formulation of our product candidates for later stages of development and commercialization; |
● | establishing our own manufacturing capabilities or agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our product candidate is approved; |
● | entry into collaborations to further the development of our product candidates; |
● | obtaining and maintaining patent and trade secret protection or regulatory exclusivity for our product candidates; |
● | successfully launching commercial sales of our product candidates, if approved; |
● | acceptance of the product candidates benefits and uses, if approved, by patients, the medical community and third-party payors; |
● | the prevalence and severity of adverse events experienced with our product candidates; |
● | maintaining a continued acceptable safety profile of the product candidates following approval; |
● | effectively competing with other therapies; |
● | obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors; and |
● | qualifying for, maintaining, enforcing and defending intellectual property rights and claims. |
A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.
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The following table summarizes our research and development expenses by product candidate or program (in thousands):
Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Eseba-vec (formerly HB-200) program | $ | 16,939 | $ | 10,715 | $ | 29,389 | $ | 20,448 | ||||
HB-300 program |
| 286 |
| 1,690 |
| 1,911 |
| 5,337 | ||||
Gilead partnered programs |
| 1,237 |
| 4,071 |
| 2,849 |
| 7,655 | ||||
Roche partnered programs | 844 | 1,332 | 4,893 | 3,325 | ||||||||
Other and earlier-stage programs |
| 141 |
| 1,531 |
| 524 |
| 3,093 | ||||
Other unallocated research and development expenses | 302 | 367 | 351 | 779 | ||||||||
Total research and development expenses | $ | 19,749 | $ | 19,706 | $ | 39,917 | $ | 40,637 |
Other unallocated research and development expenses include stock-based compensation expense, certain lease expenses and other operating expenses that we do not track on a program-by-program basis, since our research and development employees and infrastructure resources are utilized across our programs.
General and Administrative Expenses
Our general and administrative expenses consist primarily of personnel costs in our executive, finance and investor relations, business development and administrative functions. Other general and administrative expenses include consulting fees and professional service fees for auditing, tax and legal services, lease expenses related to our offices, premiums for directors and officers liability insurance, intellectual property costs incurred in connection with filing and prosecuting patent applications, depreciation and other costs. We expect our general and administrative expenses to continue to increase in the future as we expand our operating activities and prepare for potential commercialization of our current and future product candidates, increase our headcount and investor relations activities and maintain compliance with requirements of the Nasdaq Capital Market and the Securities and Exchange Commission.
Restructuring Expenses
Restructuring expenses consist of severance and other personnel costs and professional services and consulting costs associated with exit and disposal activities.
Grant Income
Since inception, we have received grants from the Austrian Research Promotions Agency, either under funding agreements or under research incentive programs. In addition, we have received loans under funding agreements that bear interest at below market interest rate. We account for the grants received as other income and for the imputed benefits arising from the difference between a market rate of interest and the rate of interest as additional grant income, and record interest expense for the loans at a market rate of interest.
We participate in a research incentive program provided by the Austrian government under which we are entitled to reimbursement of a percentage of qualifying research and development expenses and capital expenditures incurred in Austria. Submissions for reimbursement under the program are submitted annually. Incentive amounts are generally paid out during the calendar year that follows the year of the expenses but remain subject to subsequent examinations by the responsible authority.
Furthermore, we participated in the life sciences research and development program provided by the New York State government under which we were entitled to reimbursement of a percentage of qualifying research and development expenses in New York State up to $0.5 million per year for the years 2019 to 2021. Submissions for reimbursement under the program were submitted in the fourth quarter of 2023 and certificates of tax credits were received. Incentive amounts are generally paid out six to nine months after amended tax returns including a certificate of tax credit issued by Empire State Development are filed. We account for the grants received as other income.
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We also participate in the New York City biotechnology tax credit program, according to which certain expenses for business in the biotechnology field in New York City limited to $0.25 million per year for three consecutive years from January 1, 2023 to December 31, 2025 are incentivized. We account for the grants received as other income.
Interest Income
Interest income results of interest earned on our cash, cash equivalents, and restricted cash.
Interest Expense
Interest expense results primarily from loans under funding agreements with the Austrian Research Promotion Agency, recorded at a market rate of interest. The difference between interest payments payable pursuant to the loans, which rates are at below market interest rates, and the market interest rate, is accounted for as grant income.
Income Taxes
Income tax expense results from U.S. federal and state income tax as well as foreign minimum income tax and profit on a legal entity basis. The losses that we have incurred since inception result primary from the losses of our Austrian subsidiary. We have considered that, at this point in time, it is uncertain whether we will ever be able to realize the benefits of the deferred tax asset, and accordingly, have established a full valuation allowance as of June 30, 2024.
Results of Operations
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
The following table summarizes our results of operations for the three and six months ended June 30, 2024 and 2023 (in thousands):
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||
| 2024 |
| 2023 | Change |
| 2024 |
| 2023 | Change | |||||||||
Revenue from collaboration and licensing | $ | 1,290 | $ | 2,679 | $ | (1,389) | $ | 37,889 | $ | 5,855 | $ | 32,034 | ||||||
Operating expenses: | ||||||||||||||||||
Research and development | (19,749) | (19,706) | (43) | (39,917) | (40,637) | 720 | ||||||||||||
General and administrative |
| (3,945) |
| (4,445) | 500 |
| (8,001) |
| (9,347) | 1,346 | ||||||||
Restructuring | (54) | — | (54) | (1,323) | — | (1,323) | ||||||||||||
Total operating expenses |
| (23,748) |
| (24,151) | 403 |
| (49,241) |
| (49,984) | 743 | ||||||||
Loss from operations |
| (22,458) |
| (21,472) | (986) |
| (11,352) |
| (44,129) | 32,777 | ||||||||
Other income: | ||||||||||||||||||
Grant income |
| 2,508 |
| 2,217 | 291 |
| 4,741 |
| 4,570 | 171 | ||||||||
Interest income | 1,073 | 1,311 | (238) | 2,404 | 2,482 | (78) | ||||||||||||
Interest expense |
| — |
| (97) | 97 |
| (2) |
| (219) | 217 | ||||||||
Other (expense) income, net |
| (218) |
| 25 | (243) |
| (503) |
| (195) | (308) | ||||||||
Total other income, net |
| 3,363 |
| 3,456 |
| (93) |
| 6,640 |
| 6,638 |
| 2 | ||||||
Net loss before tax |
| (19,095) |
| (18,016) | (1,079) |
| (4,712) |
| (37,491) | 32,779 | ||||||||
Income tax expense |
| (0) |
| (0) | (0) |
| (0) |
| (205) | 205 | ||||||||
Net loss | $ | (19,095) | $ | (18,016) | $ | (1,079) | $ | (4,712) | $ | (37,696) | $ | 32,984 |
Revenue from Collaboration and Licensing
Revenue was $1.3 million and $37.9 million for the three and six months ended June 30, 2024, respectively, compared to $2.7 million and $5.9 million for the three and six months ended June 30, 2023, respectively.
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During the three months ended June 30, 2024, revenue decreased by $1.4 million compared to the three months ended June 30, 2023. This decrease was primarily due to lower partial recognition of the upfront and milestone payments under the Roche Collaboration Agreement as a result of the termination of the Roche Collaboration Agreement.
For the three months ended June 30, 2024 and 2023, revenue included $0.1 million and $0.3 million, respectively, from reimbursement of research and development expenses, and $1.2 million and $2.4 million, respectively, from partial recognition of upfront, milestone and initiation payments that were initially recorded as deferred revenue.
For the three months ended June 30, 2024, revenue included $0.6 million related to the Restated Gilead Collaboration Agreement, of which $0.1 million resulted from reimbursement of research and development expenses and $0.5 million resulted from partial recognition of milestone and initiation payments that were initially recorded as deferred revenue. In addition, revenue included $0.7 million related to the terminated Roche Collaboration Agreement, of which less than $0.1 million resulted from reimbursement of expenses and $0.7 million from partial recognition of upfront and milestone payments under the terminated Roche Collaboration Agreement, that were initially recorded as deferred revenue.
For the three months ended June 30, 2023, revenue included $1.7 million related to the Restated Gilead Collaboration Agreement, of which $0.3 million resulted from reimbursement of research and development expenses and $1.4 million from partial recognition of milestone and initiation payments that were initially recorded as deferred revenue. In addition, revenue included $1.0 million from partial recognition of upfront and milestone payments under the terminated Roche Collaboration Agreement that were initially recorded as deferred revenue.
During the six months ended June 30, 2024, revenue increased by $32.0 million compared to the six months ended June 30, 2023. This increase was primarily due to higher partial recognition of the upfront and milestone payments under the Roche Collaboration as a result of the termination of the Roche Collaboration Agreement leading to accelerated recognition of the upfront and milestone payments that were initially recorded as deferred revenue, including the partial recognition of revenue from a $10.0 million milestone achieved in March 2024.
For the six months ended June 30, 2024 and 2023, revenue included $0.3 million and $0.8 million, respectively, from reimbursement of research and development expenses, and $37.6 million and $5.1 million, respectively, from partial recognition of upfront, milestone and initiation payments that were initially recorded as deferred revenue.
For the six months ended June 30, 2024, revenue included $1.5 million related to the Restated Gilead Collaboration Agreement, of which $0.2 million resulted from reimbursement of research and development expenses and $1.3 million resulted from partial recognition of milestone and initiation payments that were initially recorded as deferred revenue. In addition, revenue included $36.4 million related to the terminated Roche Collaboration Agreement, of which $0.1 million resulted from reimbursement of expenses and $36.3 million of revenue recognized. Revenue recognized includes $26.3 million of the upfront and milestone payments that were originally recorded as deferred revenue and $10.0 million related to milestone achieved in March 2024 and received in April 2024 associated with an IND submission for the HB-700 program.
For the six months ended June 30, 2023, revenue included $3.4 million related to the Restated Gilead Collaboration Agreement, of which $0.8 million resulted from reimbursement of research and development expenses and $2.6 million from partial recognition of milestone and initiation payments that were initially recorded as deferred revenue. In addition, revenue included $2.5 million from partial recognition of upfront and milestone payments under the terminated Roche Collaboration Agreement that were initially recorded as deferred revenue.
Research and Development Expenses
For the three and six months ended June 30, 2024, our research and development expenses were $19.7 million and $39.9 million, respectively, compared to $19.7 million and $40.6 million for the three and six months ended June 30, 2023, respectively.
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The research and development expenses for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 remained unchanged. Indirect research and development expenses decreased by $2.2 million, offset by an increase in direct research and development expenses of $2.2 million. Indirect research and development expenses decreased mainly because of lower personnel-related expenses of $1.7 million and lower expenses for laboratory consumables of $0.4 million. The decrease in personnel-related expenses mainly resulted from the effects of our workforce reduction, including the effects of stock option forfeitures. The increase in direct research and development expenses was primarily driven by higher clinical study expenses for our eseba-vec program, partially offset by lower manufacturing expenses and decreased spending for our other programs.
The decrease of $0.7 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was attributable to a decrease in indirect research and development expenses of $3.4 million, partially offset by an increase in direct research and development expenses of $2.7 million. Indirect research and development expenses decreased mainly because of lower personnel-related expenses of $2.2 million, lower expenses for laboratory consumables of $0.8 million and lower travel expenses of $0.3 million. The decrease in personnel-related expenses mainly resulted from the effects of our workforce reduction, including the effects of stock option forfeitures. The increase in direct research and development expenses was primarily driven by higher clinical study expenses for our eseba-vec program, as well as amortization expenses related to capitalized sublicense payments following the termination of the Roche Collaboration, partially offset by lower manufacturing expenses and decreased spending for our other programs.
General and Administrative Expenses
General and administrative expenses for the three and six months ended June 30, 2024 were $3.9 million and $8.0 million, respectively, compared to $4.4 million and $9.3 million for the three and months ended June 30, 2023, respectively.
The decrease of $0.5 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to a decrease in professional and consulting fees of $0.3 million and a decrease in personnel-related expenses of $0.2 million. The decrease in personnel-related expenses resulted primarily from lower stock-based compensation expense of $0.1 million and lower training and recruitment fees of $0.1 million.
The decrease of $1.3 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to a decrease in personnel-related expenses of $0.8 million, a decrease in other expenses of $0.3 million, and a decrease in professional and consulting fees of $0.2 million. The decrease in personnel-related expenses resulted primarily from lower stock-based compensation expense of $0.6 million and lower training and recruitment fees of $0.2 million.
Restructuring Expenses
Restructuring expenses for the three and six months ended June 30, 2024 were $0.1 million and $1.3 million, respectively.
Restructuring expenses for the three months ended June 30, 2024 consisted of less than $0.1 million of severance and other personnel costs and less than $0.1 million of professional fees and consulting costs associated with exit and disposal activities. There were no restructuring expenses for the three months ended June 30, 2023.
Restructuring expenses for the six months ended June 30, 2024 consisted of $1.2 million of severance and other personnel costs and $0.1 million of professional fees and consulting costs associated with exit and disposal activities. There were no restructuring expenses for the six months ended June 30, 2023.
Grant Income
In the three months ended June 30, 2024, we recorded grant income of $2.5 million, compared to $2.2 million in the three months ended June 30, 2023. Income from grants mainly included research incentives and imputed benefits
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from below market interest rates on loans from governmental agencies. The increase of $0.3 million was primarily due to higher income from Austrian research and development incentives as a result of higher eligible research and development expenses, partially offset by lower imputed benefits associated with the FFG Loans.
In the six months ended June 30, 2024, we recorded grant income of $4.7 million, compared to $4.6 million in the six months ended June 30, 2023. Income from grants mainly included research incentives and imputed benefits from below market interest rates on loans from governmental agencies. The increase of $0.1 million was primarily due to higher income from Austrian research and development incentives as a result of higher eligible research and development expenses, partially offset by lower imputed benefits associated with the FFG Loans.
Interest Income and Expense
Interest income was $1.1 million and $2.4 million for the three and six months ended June 30, 2024, respectively, compared to interest income of $1.3 million and $2.5 million for the three and six months ended June 30, 2023, respectively. The decrease in interest income for the three and six months ended June 30, 2024 was a result of a lower cash position, partially offset by rising U.S. dollar and euro interest rates. Interest income represents interest from cash and cash equivalents held in U.S. dollars and euros resulting from the proceeds from the issuance of common and preferred stock as well as payments received under our Gilead and Roche collaborations. During the three and six months ended June 30, 2024 our cash, cash equivalents and restricted cash were mainly held in dollars at U.S. investment grade financial institutions or in money market funds. In addition, smaller amounts were held in euros and dollars at our Austrian subsidiary.
No interest expenses were recorded for the three months ended June 30, 2024, compared to interest expenses for loans from government agencies of $0.1 million for the three months ended June 30, 2023. Interest expenses for loans from government agencies were less than $0.1 million for the six months ended June 30, 2024, compared to $0.2 million for the six months ended June 30, 2023. Interest expense was recorded at the market rate of interest, which exceeded the contractual interest rate. The decrease of interest expenses was primarily due to the final principal repayment related to the FFG Loans.
Other Income and Expenses
Other expenses were $0.2 million for the three months ended June 30, 2024, compared to other income of less than $0.1 million for the three months ended June 30, 2023. The change in the three months ended June 30, 2024 resulted primarily from exchange rate differences and foreign currency remeasurements.
Other expenses were $0.5 million and $0.2 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The change in the six months ended June 30, 2024 resulted primarily from exchange rate differences and foreign currency remeasurements.
Liquidity and Capital Resources
Since our inception in 2011, we have funded our operations primarily from public offerings and private placements of common stock and convertible preferred stock, including our initial public offering, as well as private placements of our redeemable convertible preferred stock, grant funding and loans from an Austrian government agency, and upfront, milestone and initiation payments from Gilead and Roche in connection with research collaboration agreements.
Prior to our IPO, we raised gross proceeds of approximately $142.5 million from the issuance of our redeemable convertible preferred stock. In April 2019, we completed our IPO in which we issued and sold 600,000 (6,000,000 before the Reverse Stock Split) shares of our common stock, at $140.00 per share, for gross proceeds of $84.0 million, or net proceeds of $74.6 million. In December 2020, we completed a follow-on public offering in which we issued 391,000 (3,910,000 before the Reverse Stock Split) shares of our common stock, at $117.50 per share, and 2,978 shares of our Series A convertible preferred stock, at $11,750.00 per share, for net proceeds of $75.0 million after deducting underwriting discounts and commissions and offering expenses. In March 2022, we completed a follow-on
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public offering in which we issued 2,170,000 (21,700,000 before the Reverse Stock Split) shares of our common stock, at $20.00 per share, and 15,800 shares of our Series A-1 convertible preferred stock, at $2,000.00 per share, for net proceeds of $70.2 million after deducting underwriting discounts and commissions and offering expenses. In June 2023, we completed a follow-on public offering in which we issued 2,290,077 (22,900,768 before the Reverse Stock Split) shares of our common stock, at $13.10 per share, and 15,268 shares of our Series A-2 convertible preferred stock, at $1,310.00 per share, for net proceeds of $46.2 million after deducting underwriting discounts and commissions and offering expenses. In addition, in February 2022, Gilead purchased 166,666 (1,666,666 before the Reverse Stock Split) shares of our common stock for $5.0 million, at a purchase price of $30.00 per share, and in December 2023, Gilead purchased 1,500,000 (15,000,000 before the Reverse Stock Split) shares of our common stock, at $14.167 per share, for net proceeds of approximately $21.1 million after deducting offering expenses. Pursuant to the terms of the Amended Stock Purchase Agreement, we may require Gilead to purchase the balance of the $8.75 million of common stock as pro-rata participation in potential future equity raises (see “Note 10. Common stock, Class A common stock and convertible preferred stock” to our consolidated financial statements appearing elsewhere in this Quarterly Report). We also received $46.2 million from non-refundable upfront, milestone and initiation payments pursuant to the Restated Gilead Collaboration Agreement and $45.0 million from non-refundable upfront and milestone payments related to the Roche Collaboration Agreement. In addition, we achieved a $5.0 million milestone payment in July 2024 which was received on July 25, 2024 pursuant to the Restated Gilead Collaboration Agreement. As of June 30, 2024, we had cash, cash equivalents and restricted cash of $77.4 million.
On July 12, 2022, we filed a registration statement on Form S-3 (the “Registration Statement”), with the SEC, which was declared effective on July 21, 2022. The Registration Statement registers the offering, issuance and sale of an unspecified amount of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof. We simultaneously entered into a Sales Agreement with Leerink Partners LLC (“Leerink”), as sales agent, to provide for the issuance and sale by us of up to $50.0 million of common stock from time to time in “at-the-market” offerings under the Registration Statement and related prospectus filed with the Registration Statement (“Leerink ATM Program”). As of June 30, 2024, no sales had been made pursuant to the Leerink ATM Program. On August 5, 2024, we delivered a termination notice to Leerink to terminate the Sales Agreement, effective as of August 8, 2024. At the time of termination, $50.0 million remained available for issuance pursuant to the Sales Agreement. On August 8, 2024, we entered into an Open Market Sale AgreementSM with Jefferies LLC, as sales agent, to provide for the issuance and sale by us of up to $50.0 million of common stock from time to time in “at-the-market” offerings under the Registration Statement and related prospectus filed with the Registration Statement.
We entered into various funding agreements with the Austrian Research Promotion Agency (Österreichische Forschungsförderungsgesellschaft, or “FFG”). The loans by FFG (the “FFG Loans”) were made on a project-by-project basis and bear interest at a rate of 0.75% per annum. In the event that the underlying program research results in a scientific or technical failure, the principal then outstanding under any loan may be forgiven by FFG and converted to non-repayable grant funding on a project-by-project basis. The FFG Loans contained no financial covenants and were not secured by any of our assets. As of June 30, 2024, there is no remaining debt obligation under the FFG loan following the final principal repayment in April 2024.
Because the FFG Loans bear interest at below market rates we account for the imputed benefit arising from the difference between an estimated market rate of interest and the contractual interest rate as grant funding from FFG, which is included in grant income. On the date that FFG Loan proceeds are received, we recognize the portion of the loan proceeds allocated to grant funding as a discount to the carrying value of the loan and as unearned income. As of June 30, 2024, the unamortized debt discount related to FFG Loans was zero due to the final maturity on March 31, 2024 and the final repayment on April 2, 2024.
We have entered into arrangements with contract manufacturing organizations. As of June 30, 2024, we had total non-cancellable obligations under such contracts of $5.2 million.
We do not expect positive cash flows from operations in the foreseeable future, if at all. Historically, we have incurred operating losses as a result of ongoing efforts to develop our arenavirus technology platform and our product candidates, including conducting ongoing research and development, preclinical studies, clinical trials, providing general and administrative support for these operations and developing our intellectual property portfolio. We expect to continue
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to incur net operating losses for at least the next several years as we progress clinical development, seek regulatory approval, prepare for and, if approved, proceed to commercialization of our most advanced oncology product candidate eseba-vec, continue our research and development efforts relating to our other and future product candidates, and invest in our manufacturing capabilities and our own manufacturing facility.
Going Concern
We evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about our ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the condensed consolidated financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about our ability to continue as a going concern within one year after the date that the accompanying condensed consolidated financial statements are issued. In performing its analysis, management excluded certain elements of its operating plan that cannot be considered probable. Under ASC 205-40, the future receipt of potential funding from future partnerships, equity or debt issuances, the potential milestones from the Gilead Collaboration Agreement and potential reductions in force cannot be considered probable at this time because these plans are not entirely within our control and/or have not been approved by the Board of Directors as of the date of the accompanying condensed consolidated financial statements.
Our expectation to generate operating losses and negative operating cash flows in the future and the need for additional funding to support our planned operations raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q are issued. Management's plans to alleviate the conditions that raise substantial doubt include reduced spending and the pursuit of additional capital. Management has concluded that the likelihood that its plan to successfully obtain sufficient funding, or adequately reduce expenditures, while reasonably possible, is less than probable. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of issuance of the accompanying condensed consolidated financial statements.
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.
Future Funding Requirements
We have no products approved for commercial sale. To date, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, undertaking preclinical studies and clinical trials of our product candidates. As a result, we are not profitable and have incurred losses in each period since our inception in 2011, except for the first quarter of 2024. As of June 30, 2024, we had an accumulated deficit of $374.0 million. We expect to continue to incur significant losses for the foreseeable future. Based on our cash and cash equivalents as of June 30, 2024 and our planned operating expenses and capital expenditure requirements, there is substantial doubt regarding our ability to continue as a going concern for a period of one year after the issuance date of condensed consolidate financial statements accompanying this Quarterly Report on Form 10-Q. We anticipate that our expenses will increase substantially as we:
● | pursue the clinical and preclinical development of our current and future product candidates; |
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● | leverage our technologies to advance product candidates into preclinical and clinical development; |
● | seek regulatory approvals for product candidates that successfully complete clinical trials, if any; |
● | attract, hire and retain additional clinical, quality control and scientific personnel; |
● | establish our manufacturing capabilities through third parties or by ourselves and scale-up manufacturing to provide adequate supply for clinical trials and commercialization; |
● | expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company; |
● | expand and protect our intellectual property portfolio; |
● | establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly; |
● | acquire or in-license other product candidates and technologies; and |
● | incur additional legal, accounting and other expenses in operating our business, including ongoing costs associated with operating as a public company. |
Even if we succeed in commercializing one or more of our product candidates, we will continue to incur substantial research and development and other expenditures to develop and market additional product candidates. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.
We will require substantial additional financing and a failure to obtain this necessary capital could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations.
Since our inception, we have invested a significant portion of our efforts and financial resources in research and development activities for our non-replicating and replicating technologies and our product candidates derived from these technologies. Preclinical studies and clinical trials and additional research and development activities will require substantial funds to complete. We believe that we will continue to expend substantial resources for the foreseeable future in connection with the development of our current product candidates and programs as well as any future product candidates we may choose to pursue, as well as the gradual gaining of control over our required manufacturing capabilities and other corporate uses. These expenditures will include costs associated with conducting preclinical studies and clinical trials, obtaining regulatory approvals, and manufacturing and supply, as well as marketing and selling any products approved for sale. In addition, other unanticipated costs may arise. Because the outcome of any preclinical study or clinical trial is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our current or future product candidates.
Our future capital requirements depend on many factors, including:
● | the scope, progress, results and costs of researching and developing our current and future product candidates and programs, and of conducting preclinical studies and clinical trials; |
● | the number and development requirements of other product candidates that we may pursue, and other indications for our current product candidates that we may pursue; |
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● | the stability, scale and yields of our future manufacturing process as we scale-up production and formulation of our product candidates for later stages of development and commercialization; |
● | the timing of, and the costs involved in, obtaining regulatory and marketing approvals and developing our ability to establish sales and marketing capabilities, if any, for our current and future product candidates we develop if clinical trials are successful; |
● | the success of our collaboration with Gilead; |
● | our ability to establish and maintain collaborations, strategic licensing or other arrangements and the financial terms of such agreements; |
● | the cost of commercialization activities for our current and future product candidates that we may develop, whether alone or with a collaborator; |
● | the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; |
● | the timing, receipt and amount of sales of, or royalties on, our future products, if any; and |
● | the emergence of competing oncology and infectious disease therapies and other adverse market developments. |
A change in the outcome of any of these or other variables with respect to the development of any of our current and future product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will need additional funds to meet operational needs and capital requirements associated with such operating plans.
We do not have any committed external source of funds or other support for our development efforts. Until we can generate sufficient product and royalty revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing or distribution arrangements as well as grant funding. Based on our research and development plans, we have concluded that substantial doubt exists that our cash and cash equivalents, including the funds received under the Restated Gilead Collaboration Agreement will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the issuance date of the condensed consolidated financial statements. These estimates are based on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.
If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings, the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. Further, to the extent that we raise additional capital through the sale of common stock or securities convertible or exchangeable into common stock, the ownership interest of our shareholders will be diluted. If we raise additional capital through debt financing, we would be subject to fixed payment obligations and may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to obtain additional funding on favorable terms when needed, we may have to delay, reduce the scope of or terminate one or more of our research and development programs or clinical trials.
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Cash Flows
The following table sets forth a summary of the primary sources and uses of cash (in thousands):
Six months ended June 30, | ||||||
2024 |
| 2023 | ||||
Net cash used in operating activities | $ | (38,532) | $ | (22,181) | ||
Net cash used in investing activities |
| (161) |
| (719) | ||
Net cash (used in) provided by financing activities |
| (1,276) |
| 45,080 | ||
Net (decrease) increase in cash and cash equivalents |
| (39,969) |
| 22,180 |
Cash Used in Operating Activities
During the six months ended June 30, 2024, cash used in operating activities was $38.5 million, which consisted of a net loss of $4.7 million, adjusted by non-cash charges of $1.6 million and cash used due to changes in our operating assets and liabilities of $35.4 million. The non-cash charges consisted primarily of depreciation and amortization expense of $1.4 million and stock-based compensation of $0.2 million. The change in our operating assets and liabilities was primarily due to a decrease in deferred revenues of $26.8 million, primarily resulting from the early-recognition of deferred revenues related to the terminated Roche Collaboration Agreement, an increase in prepaid expenses and other non-current assets of $4.8 million, an increase in receivable research incentives of $4.2 million, a decrease in accounts payable of $1.2 million, a decrease in operating lease liabilities of $0.9 million, and a decrease in accrued expenses and other current liabilities of $0.8 million, partially offset by a decrease in prepaid expenses and other current assets of $2.6 million and a decrease in accounts receivable of $0.7 million.
During the six months ended June 30, 2023, cash used in operating activities was $22.2 million, which consisted of a net loss of $37.7 million, adjusted by non-cash charges of $3.1 million and cash provided due to changes in our operating assets and liabilities of $12.4 million. The non-cash charges consisted primarily of depreciation and amortization expense of $1.8 million and stock-based compensation of $1.4 million. The change in our operating assets and liabilities was primarily due to a decrease in accounts receivable of $6.3 million, primarily resulting from the collection of a $5.0 million milestone payment and cost reimbursements from Gilead, an increase in accounts payable of $5.2 million, an increase in deferred revenues of $4.9 million, resulting from the receipt of a $10.0 million milestone payment less recognition of deferred revenue in the period, an increase in other current liabilities of $0.7 million, a decrease in prepaid expenses and other current assets of $0.4 million, and an increase in other non-current liabilities of $0.2 million, partially offset by an increase in receivable research incentives of $4.4 million, a decrease in operating lease liabilities of $0.8 million, and an increase in other non-current assets of $0.1 million.
Cash Used in Investing Activities
During the six months ended June 30, 2024, cash used in investing activities was $0.2 million. The decrease of $0.5 million compared to the six months ended June 30, 2023 resulted from deceased capital expenditures in connection with our GMP manufacturing facility project and lower expenditures for purchase of equipment.
During the six months ended June 30, 2023, cash used in investing activities was $0.7 million and resulted primarily from capital expenditures in connection with our GMP manufacturing facility project as well as expenditures for laboratory and office space extension and purchase of equipment.
Cash (Used in) Provided by Financing Activities
During the six months ended June 30, 2024, cash used in financing activities was $1.3 million and consisted mainly of a principal repayment of loans of $1.1 million and costs related to Gilead’s purchase of common stock in December 2023.
During the six months ended June 30, 2023, cash provided by financing activities was $45.0 million and consisted mainly of net proceeds of $47.0 million from our follow-on public offering in June 2023, partially offset by principal repayments of loans of $1.8 million.
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Critical Accounting Policies 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 we have prepared in accordance with the rules and regulations of the SEC, and generally accepted accounting principles in the United States (“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 financial statements, as well as the reported expenses during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on 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. Our actual results may differ from these estimates under different assumptions or conditions.
Our critical accounting policies and the methodologies and assumptions we apply under them have not materially changed, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) on March 22, 2024.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q.
Emerging Growth Company Status and Smaller Reporting Company
As an “emerging growth company,” the Jumpstart Our Business Startups Act of 2012 allows us to delay adoption of new or revised accounting standards applicable to public companies until such standards are made applicable to private companies. However, we have irrevocably elected not to avail ourselves of this extended transition period for complying with new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
We are also a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during our most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. For so long as we remain a smaller reporting company, we are permitted and intend to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not smaller reporting companies.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risk from changes in interest rates, foreign exchange rates and inflation. All of these market risks arise in the ordinary course of business, as we do not engage in speculative trading activities. The following analysis provides additional information regarding these risks.
Foreign Currency and Exchange Risk
We are subject to the risk of fluctuations in foreign currency exchange rates, specifically with respect to the euro. Our functional currency is the U.S. dollar and the functional currency of our wholly owned foreign subsidiary, HOOKIPA Biotech GmbH, is the euro. Our cash, cash equivalents and restricted cash as of June 30, 2024 included small amounts of cash balances held by HOOKIPA Biotech GmbH in euro. Assets and liabilities of HOOKIPA Biotech GmbH are translated into U.S. dollars at the exchange rate in effect on the balance sheet date. Income items and expenses are translated at the average exchange rate in effect during the period. Unrealized translation gains and losses are recorded as
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a cumulative translation adjustment, which is included in the condensed consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity as a component of accumulated other comprehensive loss. Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in other income and expenses, net in the condensed consolidated Statements of Operations and Comprehensive Loss as incurred. A significant portion of our operating costs are in Austria, which are denominated in the euro. This foreign currency exposure gives rise to market risk associated with exchange rate movements of the U.S. dollar against the euro. Furthermore, we anticipate that a significant portion of our expenses will continue to be denominated in the euro. A hypothetical 10% weakening of the U.S. dollar compared to the euro would have increased our net loss for the six months ended June 30, 2024, by approximately $1.9 million and increased our currency translation adjustment by approximately $1.1 million. A hypothetical 10% strengthening of the U.S. dollar compared to the euro would have an equal and opposite effect on our financial statements.
Interest Rate Risk
We are exposed to market risk related to changes in interest rates. We had cash, cash equivalents and restricted cash of $77.4 million as of June 30, 2024, which included account balances with foreign banks. Interest income is sensitive to changes in the general level of interest rates; however, due to the nature of these investments, we do not believe that we have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.
Impacts of Inflation
While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we do not believe inflation has had a material effect on our historical results of operations and financial condition. However, inflation, has had, and may continue to have, an impact on the labor costs we incur to attract and retain qualified personnel, costs to conduct clinical trials and other operational costs. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset higher costs through raising funds or other corrective measures, and our inability or failure to do so could adversely affect our business, financial condition, and results of operations. In addition, increased inflation has had, and may continue to have, an effect on interest rates. Increased interest rates may adversely affect our borrowing rate and our ability to obtain, or the terms under which we can obtain, any potential additional funding.
Item 4. Controls and Procedures.
The term “disclosure controls and procedures,” as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
As of June 30, 2024, management, with the participation of our Principal Executive Officer and Principal Financial and Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed,
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summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial and Accounting Officer, to allow timely decisions regarding required disclosures.
Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our Principal Executive Officer and Principal Financial and Accounting Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2024.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a 15(f) and 15d 15(f) under the Exchange Act) identified that occurred during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
We are not currently a party to any material legal proceedings. From time to time, we may become involved in litigation or legal proceedings relating to claims arising in the ordinary course of business.
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 the trading price of our securities. Except as set forth below, there have been no material changes from our risk factors described in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023.
We are highly dependent on our key personnel to grow our business, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
We are highly dependent on members of our executive team. Although we have formal employment agreements with our executive officers, any of our executive officers could leave our employment at any time, or within a contractual termination period that is too short to find an adequate replacement. We currently do not have “key person” insurance on any of our employees. The loss of the services of our executive officers or other key employees may adversely impact the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Any significant leadership change or senior management transition involves risk, especially nearly simultaneous changes involving senior level leadership positions. For example, on July 22, 2024, Joern Aldag separated as our Chief Executive Officer and Reinhard Kandera separated as our Chief Financial Officer. In addition, on July 22, 2024, Dr. Malte Peters was appointed as our Chief Executive Officer and Terry Coelho was appointed as our Executive Vice President and Chief Financial Officer. Any failure to effectively transition these senior executive leadership changes or to retain Dr. Peters or Ms. Coelho on our executive team could hinder our strategic planning, business execution and future performance.
Recruiting and retaining qualified employees, consultants and advisors for our business, including scientific and technical personnel, also will be critical to our success. We primarily conduct our operations at our facility in Vienna, Austria. This region is headquarters to many other biopharmaceutical companies and many academic and research institutions. Competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous biotechnology and pharmaceutical companies and academic institutions for skilled individuals. In addition, failure to succeed in preclinical studies, clinical trials or applications for marketing approval may make it more challenging to recruit and retain qualified personnel.
To induce valuable employees to join and remain at our company, in addition to salary and cash incentives, we have provided, and intend to continue to provide, stock options that vest over time. The value of these equity grants that
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vest over time to our employees may be significantly affected by movements in the fair market value of our capital stock that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies.
Moreover, many of our employees have become or will soon become vested in a substantial amount of our common stock or a number of common stock options. Our employees may be more likely to leave us if the shares they own have significantly appreciated in value relative to the original purchase prices of the shares, or if the exercise prices of the options that they hold are significantly below the market price of our common stock.
Accordingly, our future success depends on our ability to continue to attract and retain current and additional executive officers and other key employees. The inability to recruit, or the loss of services of certain executives, key employees, consultants or advisors, may impede the progress of our research, development and commercialization objectives and have a material adverse effect on our business, financial condition, results of operations and prospects.
There is substantial doubt regarding our ability to continue as a going concern. We will need to raise substantial additional funding, which may not be available on acceptable terms, if at all, to be able to continue as a going concern and advance any our product candidates. Failure to obtain capital when needed may force us to delay, limit or terminate our product development efforts or other operations. Raising additional capital may dilute our existing shareholders, restrict our operations or cause us to relinquish valuable rights.
There is substantial doubt regarding our ability to continue as a going concern. Our continued existence is dependent upon our ability to obtain additional capital. As of December 31, 2023, and June 30, 2024, we had cash, cash equivalents and restricted cash of approximately $117.5 million and $77.4 million, respectively. Our management believes that such cash, cash equivalents and restricted cash will not be sufficient to fund our operating expenses and capital requirements for one year after the date that the financial statements are issued, whether or not we curtail efforts with respect to certain of our product candidates. We will require significant additional funding to advance any of our product candidates beyond the short term.
We are seeking funds through collaborations, strategic alliances, or licensing arrangements with third parties, and such agreements may impact rights to our product candidates or technologies, future revenue streams, research programs or products candidates or to grant licenses on terms that may not be favorable to us. Such arrangements will limit our participation in the success of any of our product candidates that receive regulatory approval.
We may also seek to raise such capital through public or private equity, royalty financing or debt financing. Raising funds in the current economic environment is challenging and financing may not be available in sufficient amounts or on acceptable terms, if at all. The issuance of additional securities, whether equity or debt, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities may dilute the ownership of existing shareholders. Incurring debt would result in increased fixed payment obligations, and we may agree to restrictive covenants, such as limitations on our ability to incur additional debt or limitations on our ability to acquire, sell or license intellectual property rights that could impede our ability to conduct our business.
Item 5. Other Information.
During the three months ended June 30, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act)
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Item 6. Exhibits.
The exhibits listed on the Exhibit Index immediately preceding such exhibits, which is incorporated herein by reference, are filed or furnished as part of this Quarterly Report on Form 10-Q.
Exhibit |
| Description | |
1.1* | Open Market Sale AgreementSM between Jefferies LLC and the Company, dated August 8, 2024 | ||
3.1 | |||
3.1.1 | |||
3.1.2 | |||
3.1.3 | |||
3.1.4 | |||
3.1.5 | |||
3.1.6 | |||
3.2 | |||
10.1# | |||
10.2# | |||
31.1* | |||
31.2* | |||
32.1** | |||
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101.INS* | Inline XBRL Instance 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 Label Linkbase Document | ||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||
104* | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |
* Filed herewith.
** The certification furnished in Exhibit 32.1 hereto is deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference.
# Indicates a management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| HOOKIPA Pharma Inc. | |
|
| |
Date: August 8, 2024 | By: | /s/ Malte Peters |
|
| Malte Peters |
|
| Chief Executive Officer (Principal Executive Officer) |
By: | /s/ Terry Coelho | |
| Terry Coelho | |
| Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
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