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.
3
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.
4
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.
5
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.
6
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
7
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
6. Contracts with customers
On June 29, 2021, the Company and Simcere Pharmaceutical Group Ltd (HKEX: 2096, ‘Simcere’) entered into
a strategic regional licensing partnership to develop and commercialize medicines targeting the neurotoxic amyloid
species N3pE (pGlu-Abeta) to treat Alzheimer's disease (AD) in Greater China. The agreement grants Simcere a
regional license to develop and commercialize varoglutamstat (PQ912), Vivoryon's Phase 2b-stage N3pE amyloid-
targeting oral small molecule glutaminyl cyclase (QPCT) inhibitor with disease-modifying potential for AD, as well
as the Company's preclinical monoclonal N3pE-antibody PBD-C06 in the Greater China region. The ‘fixed’
considerations totaling EUR 7.4 million (USD 8.8 million) as well as a variable compensation from the first
development milestone in the amount of EUR 3.4 million was recognized in revenues in 2021. So far Simcere has
made its payments in a timely manner, the Company expects with a very high probability that the revenues for the
first variable consideration (EUR 3.4 million) will not be reversed in future. The transaction price will be re-assessed
at each following reporting date. Future milestones from this agreement cannot be realized in these condensed
interim financial statements, as they are contingent upon the achievement of certain development and sales
milestones and significant reversal of related revenues are possible.
On February 28, 2022, Simcere announced that China's Center for Drug Evaluation of National Medical
Products Administration has approved the Clinical Trial Application for varoglutamstat. Upon request of Simcere
the Company has agreed to support Simcere in conducting and accelerating the preparation of the first human trial in
Greater China. The underlying support contract will be finalized in the third quarter of 2022.
7. Finance result
The finance result is comprised of the following items for the six months ended June 30:
For the six months ended
June 30,
2022
2021
in kEUR
Finance income
Foreign exchange income
916
216
Reversed expected credit loss allowance
50
—
23
3
Interest income
989
219
Total
Finance expenses
Foreign exchange expense
(78)
(60)
Impairments on quoted money market funds
(16)
(34)
(12)
(8)
Interest expenses
(105)
(102)
Total
884
117
Finance result
Foreign exchange income and expense is mainly derived from the translation of the U.S. Dollar cash held by
Vivoryon Therapeutics N.V. and receivables/liabilities denominated in USD from transactions with Simcere.
Interest income results from the Company`s U.S. Dollar deposits.
The expected credit loss (ECL) allowances (2022: EUR 46 thousands, 2021: nil) were deducted from
receivables which have a term of 10 months at June 30, 2022, the Company determines the exposure to credit
default using customer specific default probabilities from Bloomberg databases. In the six months ended on June 30,
2022 the ECL allowance was reduced from EUR 96 thousands to EUR 46 thousands, as one receivable was paid and
the second receivable came closer to its payment date (see note 6.).
Interest expenses for June 30, 2022 as well as for 2021 includes interest expense from pensions and leasing.
8. Income taxes
Income taxes as well as the significant differences between the expected and the actual income tax expense in
the reporting period and the comparative period are described under ‘7.7 Income taxes’ in the Annual Report 2021.
10
Although the Company has significant tax loss carryforwards, IAS 12 defines very narrow limits for the recognition
of deferred tax assets from tax loss carryforwards. IAS12 does not permit deferred tax assets to be recognized just to
offset deferred tax liabilities. Since German tax law limits the annual amounts to be offset per year, the Company
had an excess of deferred tax liabilities (EUR 0.5 million as of June 30, 2022, EUR 0.4 million as of December 31,
2021). The increase of deferred tax liabilities in the six months ended June 30, 2022 of EUR 0.1 million was
recognized as tax expense in the six months ended June 30, 2022 (2021: nil) any mainly caused by further
capitalization of capital raising costs (see note 11.).
9. Financial assets and financial liabilities
Set out below is an overview of financial assets and liabilities, other than cash and cash equivalents, held by the
Company as of June 30, 2022 and December 31, 2021:
As of
As of June 30,
December 31,
2022
2021
in kEUR
Financial assets, non-current
Receivable after ECL allowance
—
3,459
14
14
Other non-current financial assets
14
3,473
Financial assets, current
Receivable after ECL allowance
3,805
3,067
7
7
Other current financial assets
3,812
3,074
As of June 30, 2022, a receivable, already recognized in September 2021, from a variable compensation in the
amount of EUR 3.9 million (USD 4.0 million from a first development milestone) is not yet paid. The payment for
the receivable is contractually not due before April 30, 2023 and was reclassified to current financial assets as of
June 30, 2022. The last outstanding receivable from ‘fixed’ considerations of the licensing deal (see note 6.), was
paid in April 2022. The expected credit loss allowances (June 30, 2022: EUR 46 thousands, 2021: EUR 96
thousands) were deducted from receivables.
As of June 30, 2022 and December 31, 2021, the fair value of current and non-current financial assets is
estimated with the carrying amount.
As of
As of June 30,
December 31,
2022
2021
in kEUR
Financial liabilities, non-current
Accrued liabilities
—
160
—
160
Financial liabilities, current
Trade Payables
3,681
4,360
Other financial liabilities
12
3
3,693
4,363
Trade payables decreased to EUR 3,681 thousand as of June 30 from EUR 4,360 thousand as of December 31,
2021 as a higher volume of services had been accrued as of December 31, 2021 and have been paid in the following
six months ended on June 30, 2022.
11
10. Contract balances
The following table provides information about receivables, contract assets and contract liabilities from
contracts with customers as of June 30, 2022 and December 31, 2021:
As of
As of June 30,
December 31,
in kEUR
2022
2021
Contract balances
Receivables included in ‘Financial asset’
—
3,532
Receivable from first development milestone, non-current
ECL allowance, non-current
—
(73)
Receivable from first development milestone, current
3,851
—
Receivable from unavoidable license payment, current
—
3,090
(46)
(23)
ECL allowance, current
Total receivables included in ‘Financial assets’
3,851
6,622
Total receivables included in ‘Financial assets’ after ECL allowance
3,805
6,526
Contract assets, which are included in ‘Financial assets, current’
—
—
Contract liabilities which are included in ‘Other liabilities, current’
—
—
The contract assets are disclosed when the Company has rights to consideration for work completed but not
billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional.
For the year ending December 31, 2021, the Company recognized unavoidable license payments, as the license and
of know-how has been transferred and variable compensation for the first development milestone under receivables.
The last outstanding part of the receivables related to the unavoidable license payments was paid in April 2022. The
receivable from the first development milestone is contractually not due before April 30, 2023 and was reclassified
to current financial assets as of June 30, 2022.
The contract liabilities would primarily relate to performance obligations of the company not yet fulfilled. The
company did not disclose any amounts in contract liabilities at the beginning of the period that have been recognized
as revenue subsequently.
11. Other non-financial assets
in kEUR
As of
As of June 30,
December 31,
2022
2021
Current other assets
Capital raising costs
2,224
1,881
Prepayments
235
320
Value-added tax receivables
329
281
7
12
Other taxes
Total
2,795
2,494
Capital raising costs consist of expenses that have been capitalized as they relate to preparations for potential
future issuance of new shares on Nasdaq.
As of June 30, 2022 the prepayments include the conduct of VIVA-MIND the clinical 2a trial with EUR 95
thousands (2021: EUR 134 thousands) and other advance payments for G&A services with EUR 140 (2021:
EUR 141).
Current VAT tax assets as of June 30, 2022 include regular tax reclaims from incoming invoices.
12
12. Cash and cash equivalents
As of
As of June 30,
December 31,
2022
2021
in kEUR
Cash Equivalents
Money market funds
845
861
845
861
Total
Cash at banks
Cash held in U.S. Dollars
6,105
7,274
Cash held in Euro
17,433
6,526
23,538
13,800
Total
Total cash and cash equivalents
24,383
14,661
The banks and the issuer of the money-market funds (Commerzbank and Landesbank Baden Württemberg) are
all investment graded (BBB or better; S&P). Observable quoted prices in active markets were used as fair value
(level 1).
13. Equity
As of June 30, 2022, Vivoryon’s issued capital comprised 22,050,482 common shares (as of December 31,
2021: 20,050,482). The nominal amount per share is EUR 1.00.
On April 1, 2022 the Company completed a private placement by way of accelerated book building, placing
2,000,000 registered shares at an offering price of EUR 10.50 per share. The new shares from the capital increase
represents 10.0% of Vivoryon’s existing share capital and have been issued from the Company’s authorized capital
under exclusion of the existing shareholders’ pre-emptive rights. As a consequence, the Company’s issued share
capital has increased to EUR 22,050,482. The gross proceeds of the offering amount to EUR 21.0 million.
Pursuant to the Pricing and Volume Agreement from April 1, 2022, in the aggregate 2,000,000 new shares were
issued, of which 133,331 new shares have been directly subscribed by Executive Board Members (4,761 shares) and
Non-Executive Board Members (128,570 shares).
14. Share based payments
Equity settled share-based payment arrangements
Under the 2014 Share Option Programme (“2014 Plan”) the Company granted rights to purchase common
shares of Probiodrug AG (“Probiodrug”), the Company`s former name, to certain members of the management
board (as was installed at that time) and employees of Probiodrug. Under this share option program options were
issued in the years 2014 to 2017. As of December 31, 2017, no new grants could be issued under the 2014 Plan.
Number of share options
2022
2021
332,375
407,375
Outstanding as of January 1,
Exercised during the six months ended June 30
—
—
—
—
Forfeited during the six months ended June 30
332,375
407,375
Outstanding as of June 30,
thereof exercisable
332,375
407,375
The Company further established a new share option program on September 13, 2019 (amended on December
4, 2020) (“2020 Plan”), with the purpose of promoting the long-term loyalty of the beneficiaries to the Company.
The 2020 Plan governs issuances of share options to current or future employees and members of the board. The
initial maximum number of common shares available for issuance under option awards granted pursuant to the 2020
Plan equals 615,000 options. Under this program up to 615,000 options can be issued to current or future employees
and executive directors in one or several steps until December 31, 2023.
13
Number of share options
2022
2021
473,550
473,550
Outstanding as of January 1,
Granted during the six months ended June 30
—
—
Exercised during the six months ended June 30
—
—
—
—
Forfeited during the six months ended June 30
473,550
473,550
Outstanding as of June 30,*
thereof exercisable**
—
—
* The contractual life of the options is 8 years from the date of grant, not exercisable before lapse of 4 years.
** Vesting over 3-year period (33,3% each after first, second and third year).
On June 28, 2021 the Company established a new omnibus equity incentive plan (“2021 Plan”) governing the
issuance of equity incentive awards to enhance the ability to attract, retain and motivate key employees. The initial
maximum number of common shares available for issuance under equity incentive awards granted pursuant to the
2021 Plan equals 2,000,000 common shares.
Number of share options
2022
2021
—
—
Outstanding as of January 1,
Granted during the six months ended June 30
1,225,000
—
Exercised during the six months ended June 30
—
—
—
—
Forfeited during the six months ended June 30
1,225,000
—
Outstanding as of June 30,*
thereof exercisable**
39,808
—
* The contractual life of the options is 10 years from the date of grant, exercisable after the first vesting period.
** Vesting over 3-year period (33,3% after the first year of the respective service contract, the rest linearly over
the following two years in monthly equal tranches).
The number of share options granted during the six months ended June 30, 2022 under the 2021 Plan was as
follows:
Expected
Share price at
volatility of
Fair value per
grant date /
Company`s
Share options
option
Exercise price
share
Risk-free rate
granted in 2022
Number
April 25
625,000
EUR 4.71
EUR 9.39
60%
0.87%
600,000
EUR 3.96
EUR 7.42
65%
1.70%
June 22
1,225,000
All 1,225,000 options granted in the six months ended June 30, 2022, were granted to members of the Board.
Lifetime of the options was estimated with a minimum of 3 years with an early exercise when the share reaches a
value of 150% of the exercise price. Expected dividends are nil for all share options listed above.
Share options exercised
In the six months ended June 30, 2022 as well as in the six months ending June 30, 2021, no shares were issued
upon the exercise of share options.
Share-based payment expense recognized
For the six months ended June 30, 2022, the Company has recognized EUR 1,032 thousand, (2021: EUR 921
thousand) of share-based payment expense in the Statements of Profit or Loss and Other Comprehensive Income.
None of the share-based payments awards were dilutive in determining earnings per share due to the Company’s
loss position.
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15. Pension liability
As of
As of June 30,
December 31,
2022
2021
in kEUR
Pension liability
Defined benefit obligation
1,339
1,631
165
192
Obligations for granted and vested pension commitment
Total pension liability
1,505
1,823
Vivoryon has defined benefit pension plan commitments to two former members of the management board. The
pension commitments include entitlements to disability, retirement and survivor benefits in amounts specifically
determined by the individual. The amount of the defined benefit obligation (actuarial present value of the accrued
pension entitlements) is determined based on actuarial methodologies which require the use of estimates.
•
Mortality rates were calculated according to the current 2018 G mortality tables published by Heubeck.
•
The measurement of the pension liability was calculated with a discount rate of 2.63% p.a. (December 31,
2021: 1.03 % p.a.) derived from industrial bonds with an AA rating and a comparable term.
•
In addition, an increase in the pension of 1.0% was assumed.
As of
As of
December 31,
June 30, 2022
2021
Defined benefit obligation
1,631
1,783
As of January 1,
Interest
8
9
Benefit payments
(39)
(78)
Actuarial gains (-)/ losses (+)
-
Changes in financial assumptions
(260)
(98)
-
Experience adjustments
(1)
15
1,339
1,631
As of June 30 / December 31
In the reporting period, interest expenses in the amount of EUR 8 thousand (total year 2021: EUR 9 thousand)
associated with defined benefit obligations were recognized in the statement of profit and loss.
The weighted average duration of the pension commitments was 11.3 years as of June 30, 2022, respectively
12.3 years as of December 31, 2021.
16. Leases
Lease contracts consist of non-cancellable lease agreements mainly relating to the Company`s leases of office
space in Halle (Saale) and Mꢀnchen (Germany) and IT assets. Set out below, are the carrying amounts of the
Company`s right of use assets, lease liabilities and recognized expenses in connection with leases:
15
For the six
For the twelve
months ended
months ended
June 30,
December 31,
2022
2021
in kEUR
Right of use assets
219
310
Balance at January 1
Additions
—
—
(46)
(91)
Depreciation
173
219
Balance at June 30 / December 31
Lease Liabilities
225
315
Balance at January 1
Additions
—
—
Repayments
(48)
(96)
2
6
Interest
179
225
Balance at June 30 / December 31
thereof short-term lease liabilities
93
92
For the six months ended
June 30,
2022
2021
in kEUR
Expenses in connection with leases
Depreciation of RoU assets
(46)
(46)
Interest expenses on lease liabilities
(2)
(3)
Lease expenses of low-value assets
—
1
Total
(48)
(48)
17. Other liabilities
in kEUR
As of June 30,
As of December
2022
31, 2021
Other non-current liabilities
Accrued Chinese withholding taxes
—
353
—
160
Accrued liabilities
Total non-current liabilities
—
513
Other current liabilities
Accrued Chinese withholding taxes
385
309
Liabilities from employee benefits
112
182
Social charges, wage tax
52
51
24
22
Other
Total current liabilities
573
564
573
1.077
Total other liabilities
The Chinese government claims 10 % withholding tax (WHT) on the Company`s payments from Simcere under
the license contract or other service contracts (also see notes 1. and 9.). The WHT on the short-term unavoidable
license payment was paid in April 2022, while the WHT on the first development milestone payment was
reclassified to current, as the underlying payment is due within 12 months from the reporting date.
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18. Loss per share
As of June 30, 2022, Vivoryon’s issue capital consisted of 22,050,482 common shares (20,050,482 on
December 31, 2021). All common shares are registered with no par value common shares. The calculated nominal
amount per share is EUR 1.00. The net loss for the period amounted to EUR 12,583 thousands in the six months
ended on June 30, 2022 (2021: net loss of EUR 11,671 thousands). The loss per share was calculated as follows:
For the six months ended
June 30,
2022
2021
Loss per share calculation
Weighted average number of common shares outstanding
21,050,482
19,975,482
Loss for the period (in kEUR)
(12,583)
(11,671)
(0.60)
(0.58)
Loss per share (basic/diluted) in Euro
As of June 30, 2022 and 2021, no items had a dilutive effect. The Company is loss making and therefore any
dilutive additional shares, e.g., share options, were excluded from the diluted weighted average of common shares
calculation because their effect would have been anti-dilutive.
19. Contractual Obligations and Commitments
The Company enters contracts in the normal course of business with CROs and clinical sites for the conduct of
clinical trials, professional consultants for expert advice and other vendors for clinical supply manufacturing or other
services.
As of the date of these condensed interim financial statements, we do not have any, and during the periods
presented we did not have any, contractual obligations and commitments other than as described under
“9.2 Contingencies and other financial commitments” in the Annual Report 2021.
There is currently a law mediation procedure going on. Shareholders of Vivoryon applied for court procedures
for verification of the adequacy of our indemnity offer and of the compensation offered to those shareholders.
20. Related party relationships
The following individuals and entities were considered related parties of Vivoryon during the reporting period:
•
Executive members of the Board of Directors of the Company or a shareholder of the Company
•
Non-executive members of the Board of Directors
21. COVID-19 Pandemic
Despite strict national lockdown regulations, Vivoryon has managed to maintain the work ability of all
employees. For this purpose, individual solutions such as working from home and time-shifted working in the
offices were used. Business travel typically used to identify potential investors or cooperation partners, was largely
replaced by using video conference systems. All employees of the Company are still encouraged to act in
accordance with the recommendations for protection against Sars-CoV2 infections, i.e. comply with the specified
minimum distances and, where this is not possible, wear mouth and nose protection. Business trips should only be
undertaken if absolutely necessary.
Vivoryon sources certain services from contract research organizations (CROs) in its development projects. The
lockdown regulations in Europe, the United States and China have had a negative impact on the timelines of projects
resulting in a slight delay of patient enrollment in the Phase 2b, randomized and multi-center clinical VIVIAD study
in Europe (“VIVIAD”). Moreover, with the outbreak of the pandemic, Vivoryon carried out a respective risk
analysis for its projects. Since Alzheimer's patients are mostly elderly individuals and thus are representing a
particular risk group towards severe COVID progressions, Vivoryon has made the initiation of its clinical study in
relation to the community-spreading situations in participating countries (Denmark, the Netherlands, Germany,
Spain, Poland). Additionally, appropriate precautionary measures have been established at all test centers. These
17
analyses and measures were part of the applications to the respective competent national authorities for approval of
the clinical trial.
This situation is being re-evaluated at regular intervals and, if necessary, appropriate measures will be
implemented which may include the complete stop of the recruitment of study participants leading to a delay of the
trial timelines and study results.
A further risk resulting from the pandemic, is the increased vulnerability of the supply chain for clinical study
materials. To mitigate this risk, the Company has been establishing a second source for the synthesis of the active
pharmaceutical ingredient (API).
22. Russian-Ukraine Conflict
The recent conflict in Europe between Russia and the Ukraine resulted in sanctions and will further provoke
retaliatory measures. This change may have a wide impact on the availability and price of various materials and
services and might also sustainably affect global financial markets. Cost inflation may negatively impact our cash
reach while capital markets disruptions may adversely affect investor`s demand and thus financing possibilities. The
development of current geo-political conflicts is subject to considerable uncertainty and as such the impact on our
business will be monitored and assessed going forward.
23. Significant events after the reporting date
At the end of September 2022, the Company entered into a private placement of 2,054,796 registered shares at
an offering price of EUR 7.30 per share. The new shares from the capital increase will represent 9.3% of Vivoryon’s
existing share capital and will be issued from the Company’s authorized capital under exclusion of the existing
shareholders’ pre-emptive rights. Consequently, the Company’s issued share capital will increase to EUR
24,105,278.00. In addition, the investors will have the option 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.
Beyond this there were no events of particular significance subsequent to the balance sheet date.
18