VIVORYON THERAPEUTICS N.V.
INTERIM REPORT AS OF AND FOR THE SIX-MONTH PERIOD ENDED
JUNE 30, 2022
These condensed interim financial statements are interim financial statements for Vivoryon Therapeutics N.V.
The condensed financial statements are presented in Euro (EUR). Vivoryon Therapeutics N.V. is a company limited
by shares, incorporated and domiciled in Amsterdam, The Netherlands. Its registered office and principal place of
business is in Germany, Halle, Weinbergweg 22.
INDEX TO CONDENSED INTERIM FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2022 AND 2021
Unaudited Condensed Interim Financial Statements
Condensed Statements of Profit or Loss and Other Comprehensive Income for the six-month ended June 30, 2022
and 2021......................................................................................................................................................................... 3
Condensed Statements of Financial Position as of June 30, 2022 and December 31, 2021.......................................... 4
Condensed Statements of Changes in Shareholders’ Equity for the six-months ended June 30, 2022 and 2021 ......... 5
Condensed Statements of Cash Flows for the six-months ended June 30, 2022 and 2021 ........................................... 6
Notes to the Unaudited Condensed Interim Financial Statements................................................................................. 7
Vivoryon Therapeutics N.V.
Condensed Statements of Profit or Loss and Other Comprehensive Income for the six-month ended June 30,
2022 and 2021
For the six months ended June 30,
Note
2022
2021
in kEUR, except for share data
Research and development expenses
(11,067)
(9,456)
General and administrative expenses
(2,311)
(2,337)
—
5
Other operating income
(13,378)
(11,788)
Operating loss
Finance income
989
219
7.
(105)
(102)
Finance expenses
7.
884
117
Finance result
7.
(12,494)
(11,671)
Result before income taxes
(89)
—
Income taxes
8.
(12,583)
(11,671)
Net loss for the period
Items not to be reclassified subsequently to profit or loss
261
—
Remeasurement of the net defined benefit pension liability
261
—
Total other comprehensive income / (loss)
(12,322)
(11,671)
Comprehensive loss
Loss per share in EUR (basic and diluted)
(0.60)
(0.58)
18.
The accompanying notes are an integral part of these condensed interim financial statements.
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Vivoryon Therapeutics N.V.
Condensed Statements of Financial Position as of June 30, 2022 and December 31, 2021
June 30,
December 31,
Note
2022
2021
in kEUR
ASSETS
Non-current assets
Intangible assets
512
533
Property, plant and equipment
54
66
Right-of-use assets
173
219
16.
14
3,473
Financial assets
9.
Total non-current assets
753
4,291
Current assets
Financial assets
3,812
3,074
9.
Other current assets and prepayments
2,795
2,494
11.
Cash and cash equivalents
24,383
14,661
12.
30,990
20,229
Total current assets
TOTAL ASSETS
31,743
24,520
Equity
Share capital
22,050
20,050
13.
Share premium
101,181
83,211
Other capital reserves
7,200
6,168
Accumulated other comprehensive loss
(311)
(572)
(104,883)
(92,300)
Accumulated deficit
Total equity
25,237
16,557
Non-current liabilities
Pension liability
15.
1,505
1,823
Provisions long-term
12
12
Lease liabilities
86
132
16.
—
Other liabilities
513
17.
Deferred tax liabilities
521
432
8.
2,124
2,912
Total non-current liabilities
Current liabilities
Provisions
35
35
Trade payables
3,681
4,360
9.
Lease liabilities
93
92
16.
Other liabilities
573
564
17.
4,382
5,051
Total current liabilities
Total Liabilities
6,506
7,963
31,743
24,520
TOTAL EQUITY AND LIABILITIES
The accompanying notes are an integral part of these condensed interim financial statements.
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Vivoryon Therapeutics N.V.
Condensed Statements of Changes in Shareholders’ Equity for the six-months ended June 30, 2022 and 2021
Accumulated
other
Other
Share
comprehensive
Share
capital
Accumulated
Total
capital
premium
reserves
loss
deficit
equity
Note
(in kEUR)
20,050
83,211
6,168
(572)
(92,300)
16,557
January 1, 2022
Net loss for the period
—
—
—
—
(12,583)
(12,583)
Remeasurement of the net defined
—
—
—
261
—
261
benefit pension liability
15.
—
—
—
261
(12,583)
(12,322)
Comprehensive income / (loss)
Proceeds from the issuance of
common shares
2,000
19,000
—
—
—
21,000
13.
Transaction costs of equity
transactions
—
(1,030)
—
—
—
(1,030)
13.
—
—
1,032
—
—
1,032
Share-based payments
14(c)
22,050
101,181
7,200
(311)
(104,883)
25,237
June 30, 2022
19,975
82,143
4,404
(655)
(79,646)
26,221
January 1, 2021
—
—
—
—
(11,671)
(11,671)
Net loss for the period
—
—
—
—
(11,671)
(11,671)
Comprehensive loss
—
—
921
—
—
921
Share-based payments
14(c)
19,975
82,143
5,325
(655)
(91,317)
15,471
June 30, 2021
The accompanying notes are an integral part of these condensed interim financial statements.
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Vivoryon Therapeutics N.V.
Condensed Statements of Cash Flows for the six-months ended June 30, 2022 and 2021
For the six months ended
June 30,
Note
2022
2021
(in kEUR)
Operating activities
Result before income taxes
(12,494)
(11,671)
Adjustments for:
Finance result
(884)
(117)
7.
Depreciation and amortization
81
82
Share based payments
14(c)
1,032
921
Other non-cash adjustments
764
(10)
Changing in:
Financial assets
2,721
(660)
9.
Other current assets and prepayments
44
1,302
11.
Pension liabilities
(318)
(40)
15.
Trade payables
(679)
4,076
9.
Other liabilities
17.
(504)
49
Interest received
3
4
Interest paid
(3)
(9)
(10,237)
(6,072)
Cash flows used in operating activities
Investing activities
Purchase of plant and equipment
(2)
(16)
Purchase of intangible assets
—
(8)
(2)
(24)
Cash flows used in investing activities
Financing activities
Proceeds from the issuance of common shares
21,000
—
13.
Capital raising costs
(1,374)
(468)
13.
(46)
(45)
Payment of lease liabilities
16.
Cash flows provided by / (used in) financing activities
19,581
(513)
9,342
(6,609)
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
12.
14,661
26,306
380
135
Effect of exchange rate fluctuation on cash held
Cash and cash equivalents at end of period
24,383
19,832
12.
The accompanying notes are an integral part of these condensed interim financial statements.
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Vivoryon Therapeutics N.V.
Notes to the Unaudited Condensed Interim Financial Statements
1. Reporting entity
Vivoryon Therapeutics N.V. (or the ‘Company’; until November 28, 2020 Vivoryon Therapeutics AG) is a
Dutch public company with limited liability (‘Naamloze Vennootschap’) incorporated and domiciled in Amsterdam,
the Netherlands. The Company is registered in the Commercial Register of The Netherlands Chamber of Commerce
Business Register under CCI number 81075480. Its registered office and principal place of business is in Germany,
Halle (Saale), Weinbergweg 22. Since October 27, 2014, Vivoryon listed common shares under the symbol ‘VVY’
on the EURONEXT Amsterdam.
Based on the resolution of the Annual General Meeting of September 30, 2020, Vivoryon Therapeutics AG has
moved its statutory seat from Halle (Saale), Germany to Amsterdam, Netherlands and has changed its legal form
from the German stock corporation to the Dutch N.V. (‘Naamloze Vennootschap’).
Vivoryon Therapeutics N.V. (hereinafter also referred to as ‘Vivoryon’ or the ‘Company’), has activities in the
areas of research, preclinical and clinical development of therapeutic drug candidates. The product pipeline currently
includes several research and development programs with a focus on the inhibition of the enzyme Glutaminyl
Cyclase (‘QC’ or ‘QPCT’) and its iso-form iso-Glutaminyl Cyclase (iso-QC or QPCTL) for the treatment of
Alzheimer’s disease and other diseases. Vivoryon Therapeutics extended its portfolio in 2020 by acquiring patents
for the further development of Meprin protease inhibitors which have a therapeutic potential for a range of
indications including acute and chronic kidney disease and multiple organ fibrosis. The activities of the Company
are carried out in Germany being the primary location for its development activities.
The condensed interim financial statements of Vivoryon have been prepared in accordance with International
Financial Reporting Standards as adopted in the European Union (herein ‘IFRS’).
2. Basis of accounting
These condensed interim financial statements for the six-month reporting periods ended June 30, 2022 and 2021
have been prepared in accordance with IAS 34 Interim Financial Reporting and International Financial Reporting
Standards as adopted in the European Union (herein ‘IFRS’). These condensed interim financial statements do not
include all the information and disclosures required in the annual financial statements. Accordingly, this report is to
be read in conjunction with the financial statements in our annual report for the year ended December 31, 2021.
The condensed interim financial statements were authorized for issue by the board of directors on September
16, 2022. The Board declares that, to the best of its knowledge, the condensed interim financial statements for the
six months ended June 30, 2022 provide a true and fair view of the assets, liabilities, financial position and profit or
loss of the Company in accordance with IFRS, and the Report provides a true and fair view of the position of the
Company as at June 30, 2022 and the development of the business during the six months period ended June 30,
2022.
These condensed interim financial statements are presented in thousands of Euro (EUR), which is also the
functional currency of Vivoryon Therapeutics N.V. All financial information presented in Euro has been rounded to
the nearest thousand (abbreviation EUR thousand) or million (abbreviated EUR million).
The accounting policies adopted are consistent with those followed in the preparation of the Company’s annual
financial statements for the year ended December 31, 2021.
The Company has not early adopted any other standard, interpretation or amendment that has been issued but is
not yet effective.
3. Going Concern
As a clinical stage biopharmaceutical company, the Company has incurred operating losses since inception. For
the six months ended June 30, 2022, the Company incurred a net loss of EUR 12.6 million (including an operating
loss amounting to EUR 13.4 million, resulting in an operating cash outflow of EUR 10.2 million). As of June 30,
2022, the Company had generated an accumulated deficit of EUR 104.9 million and had an equity position
amounting to EUR 25.2 million. The Company expects it will continue to generate significant operating losses for
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the foreseeable future due to, among other things, costs related to research funding, development of its product
candidates and its preclinical programs, strategic alliances and its administrative organization.
To date the Company largely financed its operations through equity raises, licensing proceeds and government
grants. At the end of September 2022, the Company entered into an investment agreement for the private placement
of 2,054,796 registered shares at an offering price of EUR 7.30 per share. In addition, the Company granted the
option to the investors to purchase up to another 2,054,796 registered shares at a price of EUR 7.30 following a
period of twelve months after the date of the approval of a EU Recovery prospectus (in accordance with Section 14a
Prospectus Regulation) or the achievement date of a defined clinical milestone. The gross proceeds of the offering
amount to EUR 15.0 million, and up to an additional EUR 15.0 million if the option to purchase the additional
shares is exercised.
As of September 30, 2022, the issuance date of the Company`s condensed interim financial statements for the
six months periods ended June 30, 2022, the Company expects on the basis of its most recent financing and business
plan that its existing cash and cash equivalents will be sufficient to fund its research and development expenses as
well the general and administrative expenses and cash flows from investing and financing activities at least through
December 2023 in case none of the above mentioned options will be exercised.
Management has considered the ability of the Company to continue as a going concern. Based on the
Company’s recurring losses from operations incurred since inception, expectation of continuing operating losses for
the foreseeable future, and the need to raise additional capital to finance its future operations, as of September 30,
2022, the issuance date of the financial statements for the six months periods ended June 30, 2022, the Company has
concluded that there is no doubt about its ability to continue as a going concern for a period of at least one year from
the date that these financial statements are issued. Consequently, the accompanying financial statements have been
prepared on the basis that the Company will continue as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities and commitments in the normal course of business.
The future viability of the Company beyond December 2023 is dependent on its ability to raise additional funds
to finance its operations. In the event the Company does not receive additional funds from the exercise of the above
mentioned options until December 2023, and the Company does not complete a secondary listing of its common
shares on the Nasdaq Global Market, the Company expects to be required to seek additional funding through private
equity financings, government or private-party grants, debt financings or other capital sources or through
collaborations with other companies or other strategic transactions, including partnering deals for one or more of its
product candidates. The Company is exploring various financing alternatives to meet the Company’s future cash
requirements, including seeking additional investors, pursuing industrial partnerships, or obtaining further funding
from existing investors through additional funding rounds. The Company may not be able to obtain financing on
acceptable terms, or at all, and the Company may not be able to enter into collaborations or other arrangements. The
terms of any financing may adversely affect the holdings or rights of the Company’s shareholders.
If the Company is unable to raise capital on acceptable terms or at all, the Company would be forced to delay,
limit, reduce or terminate its product development or future commercialization efforts of one or more of our product
candidates, or may be forced to reduce or terminate its operations. Although management continues to pursue these
plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable
to the Company to fund continuing operations, if at all.
The accompanying condensed interim financial statements have been prepared on the basis that the Company
will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business.
4. Change in accounting policy
The following amendments were adopted effective January 1, 2022 and have not a material impact on the
financial statements of Vivoryon:
-
Annual Improvements to IFRS Standards 2018–2020 (January 1, 2022)
-
Amendment to IAS 37: Onerous Contracts – Cost of Fulfilling a Contract (January 1, 2022)
-
Amendment to IAS 16: Property, Plant and Equipment: Proceeds before Intended Use (January 1, 2022)
-
Amendment to IFRS 3: Reference to the Conceptual Framework (January 1, 2022)
8
The following amendments will be adopted effective January 1, 2023 or later and are not expected to have a
material impact on the financial statements of Vivoryon:
-
Amendment to IAS 1: Classification of Liabilities as Current or Non-current (January 1, 2023)
-
Amendment to IFRS 17 Insurance Contracts (January 1, 2023)
-
Amendment to IFRS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies (January 1, 2023)
-
Amendment to IAS 8: Definition of Accounting Estimates (January 1, 2023)
-
Amendment to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(January 1, 2023)
-
Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate
or Joint Venture (Available for optional adoption/ effective date deferred indefinitely)
5. Critical judgments and accounting estimates
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within the period ending June 30, 2022 is included in the
following notes. The estimates may differ from the actual amounts recognized in subsequent periods. Changes in
assumptions or estimates to be made are recognized in the statement of profit or loss and other comprehensive
income at the time they become known. The circumstances in existence at the time of preparation of the financial
statements are considered as well as the future development in the industry-related environment concerning the
expected future business development of Vivoryon.
Revenue from contracts with customers
While recognizing revenue from contracts with customers critical judgments and accounting estimates may be
required in the five-step approach of IFRS 15. With respect to the revenue recognized in these financial statements,
management has made significant judgements and estimates in the following steps.
Management has applied judgement in the assessment if the transferred licenses fulfilled the IFRS 15 criteria
for ‘right-to-use’ vs. ‘right-to-access’ license. Due to the transfer of the rights including the entire know-how and the
lack of further involvement in the subsequent regulatory approval steps of a drug in Greater China, management has
recognized a 'right-to-use' license in the year ended on December 31, 2021.
In a further step of IFRS 15 management identified variable compensation with highly probably outcome where
significant reversals will not occur, i.e. when contractual perquisites for milestones and related payments are
unavoidable for the customer. Additionally, given the range of possible outcomes for milestones and related
payments and the uncertainty for each scenario, management applied the expected value estimation method.
Recognition of research and development expenses
As part of the process of preparing the financial statements, Vivoryon is required to estimate its accrued
expenses. This process involves reviewing quotations and contracts, identifying services that have been performed
on its behalf, estimating the level of service performed and the associated cost incurred for the service when
Vivoryon has not yet been invoiced or otherwise notified of the actual cost, see note 6.14 of our Annual Report
2021.
Income Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the
amount and timing of future taxable income. Given the differences arising between the actual results and the
assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax entries already
recorded. Deferred tax assets are recognized for unused tax losses to the extent, that deferred tax liabilities exceed
deferred tax assets, while the provisions of the German Tax Act on the utilization of loss carryforwards was also
considered ('minimum taxation'/’Mindestbesteuerung’). Significant management judgement is required to determine
the amount of deferred tax assets that can be recognized, based upon the likely timing of deferred tax liabilities that
are compensated by deferred tax assets from loss carryforwards under the constraints of German tax law. Due to our
history of loss-making over the last several years as well as our plans for the foreseeable future, we have not
recognized any further deferred tax assets on tax losses carried forward.
9