Inventiva FY23 €(2.43) Vs €(1.31) YoY; Revenues For 2023 Amounted To €17.5 Million, Up By 43.4%, Compared To €12.2 Million In 2022

Author: Benzinga Newsdesk | March 27, 2024 04:03pm

Key financial results for the full year of 2023

As of December 31, 2023, the Company's cash and cash equivalents amounted to €26.9 million, short-term deposits to €0.01 million, and long-term deposit to €9.0 million, compared to €86.7 million, €1.0 million and €0.7 million as of December 31, 2022, respectively.

The decrease in cash and cash equivalents and short-term and long-term deposits between December 31, 2023, and December 31, 2022 was mainly caused by the increased use of cash in operating activities. This reflects the acceleration of clinical development activities in 2023, mostly driven by costs associated with the NATiV3 Phase III clinical trial of lanifibranor in MASH/NASH and, to a lesser extent, with the LEGEND Phase IIa combination trial with lanifibranor and empagliflozin in patients with MASH/NASH and type 2 diabetes ("T2D"). This decrease is partially offset by:

1. the August 2023 financing of €35.7 million (gross amount) consisting of two transactions:
   1. a capital increase reserved to specified categories of investors through the issuance of 9,618,638 newly-issued ordinary shares at a subscription price of €3.18 per share and aggregate gross proceeds of €30.6 million, and
   2. the issuance of royalty certificates for an aggregate amount of €5.1 million,
2. the receipt of the $10 million upfront payment from Hepalys Pharma, Inc. ("Hepalys") on October 18, 2023, under the exclusive licensing agreement to develop and commercialize lanifibranor for the treatment of MASH/NASH and potentially other metabolic diseases in Japan and South Korea, and
3. the receipt of two short-term milestone payments, together amounting to a total of $5 million4 from Sino Biopharm, through its subsidiary Chia Tai Tianqing Pharmaceutical Group Co., Ltd. ("CTTQ"), following (a) receipt of the Investigational New Drug ("IND") by the Chinese National Medical Products Administration (the "NMPA") and (b) the enrollment by CTTQ of the first patient in China in the Company's ongoing pivotal NATiV3 Phase III clinical trial.

The above cash, cash equivalents and deposits do not include the disbursement of the second tranche of €25 million of the unsecured loan agreement executed with the European Investment Bank ("EIB"), which was received on January 18, 2024. Considering its current cost structure and forecasted expenditures, the Company estimates that, including the second tranche of the EIB loan, its cash, cash equivalents and deposits should allow the Company to fund its operations as currently planned until the beginning of the third quarter of 20243. Therefore, it indicates that a material uncertainty exists on the Company's ability to continue as a going concern.

 The Company is actively reviewing potential financing (including debt, equity and equity-linked or other instruments) and strategic options with potential counterparties and its financial advisors.

Net cash used in operating activities amounted to (€81.6) million for the full year 2023, compared to (€44.9) million in 2022. R&D expenses for 2023 were up 82% compared to 2022. This increase was primarily due to the clinical development activities planned for and executed in 2023, partially offset by the upfront and milestone payments received from our partners, CTTQ and Hepalys (see above).

Net cash used in investing activities for the full year 2023 amounted to (€7.7) million, compared to €8.9 million generated in 2022. The change was mostly due to the variations in deposits between both periods.

Net cash generated from financing activities for the full year 2023 amounted to €29.1 million, compared to €37.3 million for 2022. The increase was due to the financing of €35.7 million in gross proceeds in August 2023, consisting of a reserved capital increase and the issuance of royalty certificates, partially offset by repayments of debt for €2.5 million and lease liabilities for €1.6 million. The net cash generated from financing activities in 2022 was mainly driven by the equity sold through the Company's At-The-Market Program for approximately €9.4 million (gross proceeds) in June 2022, three loan agreements with a syndicate of French banks for a total amount of €5.3 million entered into in the first half of 2022, and the receipt of the first tranche of €25 million of the unsecured loan agreement with the EIB.

In 2023, the Company recorded a positive exchange rate effect on cash and cash equivalents of €0.4 million, compared to a negative effect of (€1.0) million in 2022, due to the evolution of EUR/USD exchange rate.

Revenues

The Company's revenues for 2023 amounted to €17.5 million, up by 43.4%, compared to €12.2 million in 2022.

Revenues for 2023 consist mainly of i) €4.6 million, recognized under the license agreement with CTTQ mainly following the receipt of two regulatory milestone payments from CTTQ in connection with IND approval from the NMPA to initiate the clinical development in mainland China of lanifibranor in MASH/NASH and the randomization of the first patient and ii) €12.7 million recognized under the license agreement with Hepalys, consisting of the $10 million upfront payment and non-cash consideration from the fair value of the option to acquire shares of Hepalys.

Other income amounted to €5.7 million for the full year 2023, as compared to €6.6 million for 2022 which represents a decrease of 14%. Other income mainly consisted of French research tax credit (credit d'impôt recherche) for 2023 and 2022 in the amounts of €5.3 million and €5.2 million recorded in 2023 and 2022 respectively.

R&D expenses for the fiscal year ended December 31, 2023, amounted to (€110.0) million compared to (€60.5) million in 2022. This 82% increase reflects the planned acceleration in 2023 of the clinical development activities mostly driven by costs associated with the NATiV3 Phase III clinical trial of lanifibranor in MASH/NASH, and, to a lesser extent, with the LEGEND Phase IIa combination trial with lanifibranor and empagliflozin in patients with MASH/NASH and T2D.

Marketing and business development expenses was (€2.0) million for the fiscal year ended December 31, 2023, compared to (€2.6) million in 2022. The decrease is mainly due to less withholding tax related to entering into the license and collaboration agreements with CTTQ in 2022 and, to a lesser extent, lower consulting fees relating to the aforementioned agreements.

General and administrative expenses (G&A) amounted to (€13.8) million for the fiscal year ended December 31, 2023, an increase of 7% compared to (€12.9) million in 2022, mainly due to increased personnel costs linked to the non-cash share-based payment expenses, and compliance fees to a lesser extent.

Net financial income was (€5.1) million for the fiscal year ended December 31, 2023, compared to €2.8 million in 2022. The net financial loss in 2023 compared to 2022 is mainly due to (i) (€4.6) million variation in loan interests expenses, (ii) (€3.8) million of net variation due to greater foreign exchange gains in 2022 compared to 2023 due to a less favorable EUR/USD exchange rate context in 2023, partially offset by revenues generated by cash investment.

Share of net loss – Equity method was (€2.0) million for the fiscal year ended December 31, 2023, due to the first equity method consolidation of Hepalys in Inventiva financial statements.

Income tax amounted to (€0.6) million for the 2023 fiscal year, compared to €0 million for 2022. This represents a partial non-cash write-off of the U.S. R&D tax credit deferred tax asset.

The Company's net loss for the full year 2023 was (€110.4), compared to (€54.3) million for 2022.

Posted In: IVA