What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-09 compared with 2021-03-17 · 42 added, 548 removed, 12 unchanged (98% of the section changed)

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Market Information

Our ADSs have been listed on

the Nasdaq Global Select Market under the symbol DBVT since October 22, 2014.

Our ADSs have been listed on the Nasdaq Global Select Market under the symbol “DBVT” since October 22,

Prior to that date, there was no public trading market for our ADSs.

Our ordinary shares have been trading on Euronext Paris under the symbol

DBV since March 28, 2012.

Our ordinary shares have been trading on Euronext Paris under the symbol “DBV” since March 28, 2012.

Prior to that date, there was no public trading market for our ADSs or our ordinary shares.

Ordinary Shares

Holders of Ordinary Shares

As of March 9, 2022, there were approximately 209 holders of record of our ordinary shares and 1 holder of record of our ADSs.

actual number of holders is greater than these numbers of record holders, and includes beneficial owners whose ordinary shares or ADSs are held in street name by brokers and other nominees.

This number of holders of record also does not include

holders whose shares may be held in trust by other entities.

The actual number of holders is greater than these numbers of record holders, and includes beneficial owners whose ordinary shares or ADSs are held in street name by brokers and other nominees.

This number of holders of record also does not include holders whose shares may be held in trust by other entities.

The number of beneficial owners of the ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.

Dividend Policy

We have never paid cash dividends on any of our share capital and currently intend to retain our future earnings, if any, to fund the development and growth of our business.

Recent Sales of Unregistered Equity Securities

the year ended December 31, 2020, we issued the following unregistered securities:

On January 15, 2020, the issuances of ordinary shares following the exercise 24,990 employee warrants and

the exercise of 35,000 employees stock options;

On November 25, 2020, the issuance of 2,000 RSUs;

During the year ended December 31, 2021, we issued the following unregistered securities:

On February 22, 2021, the issuance of 7,500 ordinary shares to a non-U.S.

employee upon exercise of 7,500 employee warrants (“bons de souscription de parts de créateur d’entreprise,” or “BSPCEs”) at an exercise price of 5.13 euros per warrant, for aggregate proceeds to the Company of 38,475 euros;

On March 23, 2021, the grant of an aggregate of 4,000 RSUs to a non-U.S.

On March 23, 2021, the grant of an aggregate of 2,200 stock options to a non-U.S.

Each stock option is exercisable at an exercise price of 9.30 euros;

On May 12, 2021, the issuance of 10,200 ordinary shares to a non-U.S.

employee upon exercise of 10,200 BSAs at an exercise price of 5.13 euros per warrant, for aggregate proceeds to the Company of 52,236 euros;

On May 17, 2021, the issuance of 10,500 ordinary shares to a non-U.S.

employee upon exercise of 10,500 BSAs at an exercise price of 5.13 euros per warrant, for aggregate proceeds to the Company of 53,865 euros;

On May 18, 2021, the issuance of 10,800 ordinary shares to a non-U.S.

employee upon exercise of 10,800 BSAs at an exercise price of 5.13 euros per warrant, for aggregate proceeds to the Company of 55,404 euros;

On May 19, 2021, the grant of an aggregate of 20,000 RSUs to a non-U.S.

On May 21, 2021, the issuance of 11,100 ordinary shares to a non-U.S.

employee upon exercise of 11,100 BSAs at an exercise price of 5.13 euros per warrant, for aggregate proceeds to the Company of 56,943 euros;

On May 26, 2021, the issuance of 21,000 ordinary shares to a non-U.S.

employee upon exercise of 21,000 non-employee warrants (“bons de souscription d’action,” or “BSAs”) at an exercise price of 5.13 euros per warrant, for aggregate proceeds to the Company of 107,730 euros;

On May 28, 2021, the issuance of 11,400 ordinary shares to a non-U.S.

employee upon exercise of 11,400 BSAs at an exercise price of 5.13 euros per warrant, for aggregate proceeds to the Company of 58,482 euros;

On June 3, 2021, the grant of an aggregate of 39,185 BSAs to a Directors for aggregate proceeds to the Company of 229,232 euros.

Each BSA is exercisable for one ordinary share at an exercise price of 10.75 euros;

On October 7, 2021, the issuance of an aggregate of 20,000 ordinary shares to a non-U.S.

employee upon settlement of RSUs;

On November 22, 2021, the grant of an aggregate of 153,800 RSUs to a non-U.S.

On November 22, 2021, the grant of an aggregate of 432,100 stock options to a non-U.S.

Each stock option is exercisable at an exercise price of 5.87 euros;

On November 22, 2021, the grant of an aggregate of 13,700 RSUs to our executive officers;

On November 22, 2021, the grant of an aggregate of 420,400 stock options to our executive officers.

Each stock option is exercisable at an exercise price of 5.87 euros;

On November 24, 2021, the issuance of an aggregate of 58,675 ordinary shares to a non-U.S.

employee upon settlement of RSUs;

On December 20, 2021, the issuance of an aggregate of 5,400 ordinary shares to a non-U.S.

employee upon settlement of RSUs.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering.

Unless otherwise specified above,

we believe these transactions were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act, Regulation D or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not

involving any public offering or under benefit plans and contracts relating to compensation as provided under Rule 701.

Unless otherwise specified above, we believe these transactions were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act, Regulation S, Regulation D or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or under benefit plans and contracts relating to compensation as provided under Rule 701.

The recipients of the securities in each of these transactions represented their intentions to acquire the securities for

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All recipients had adequate access, through their relationships with us, to information about us.

The sales of these securities were made without any

general solicitation or advertising.

The sales of these securities were made without any general solicitation or advertising.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Financial Data.

Because we are considered to be a smaller reporting company under SEC rules and regulations, we are not required to

provide the information required by this item in this Annual Report.

Managements Discussion and Analysis

of Financial Condition and Results of Operations.

You should read this discussion and analysis of our financial condition and consolidated results

of operations together with the consolidated financial statements, related notes and other financial information included in this Annual Report on Form 10-K.

Some of the information contained in this

discussion and analysis or set forth

elsewhere in this Annual Report on Form 10-K, including statements of our plans, objectives, expectations and intentions, contain forward-looking statements that involve risks and uncertainties.

As a result of many factors, including those factors set forth in the Risk Factors section of this Annual Report on Form 10-K, 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.

Please also see the section titled Forward-Looking Statements.

We are a clinical-stage specialty biopharmaceutical company focused on changing the field of immunotherapy by developing a novel technology platform called

Our therapeutic approach is based on epicutaneous immunotherapy, or EPIT TM , our proprietary method of delivering biologically active compounds to the immune system through intact skin

using Viaskin.

We have generated significant data demonstrating that Viaskins mechanism of action is novel and differentiated, as it targets specific antigen-presenting immune cells in the skin, called Langerhans cells, that capture the

antigen and migrate to the lymph node in order to activate the immune system without passage of the antigen into the bloodstream, minimizing systemic exposure in the body.

We are advancing this unique technology to treat patients, including infants

and children, suffering from food allergies, for whom safety is paramount, since the introduction of the offending allergen into their bloodstream can cause severe or life-threatening allergic reactions, such an anaphylactic shock.

Financial Overview

Since our inception, we have

primarily funded our operations with equity financings, and, to a lesser extent, public assistance aimed at supporting innovation and payments associated with research tax

credits (Crédit dImpôt Recherche).

We do not generate product revenue and continue to prepare for the potential launch of our first product in the United States and in the European Union, if approved.

Following receipt of a Complete Response Letter, or CRL, from the U.S.

Food and Drug Administration, or FDA, in connection with our Biologics License

Application, or BLA, for Viaskin Peanut, beginning in August 2020, we scaled down our other clinical programs and pre-clinical spend to focus on

Viaskin Peanut.

We also initiated a global restructuring plan in June 2020 to provide operational latitude to progress the clinical development and regulatory review of Viaskin Peanut in the

United States and European Union.

Based on guidance received from the FDA in January 2021, that we plan to implement, and expected cost savings from implementation of the global restructuring plan, we expect that our current balance of cash and cash

equivalents of $196.4 million as of December 31, 2020 will be sufficient to fund our operations to the second half of 2022.

seek additional capital as we prepare for the launch of Viaskin Peanut, if approved, and continue other research and development efforts.

We may seek to finance our future cash needs through a combination of public or private

equity or debt financings, collaborations, license and development agreements and other forms of non-dilutive financings.

As a result of disruptions to the global financial markets as a result

of the ongoing COVID-19 pandemic, we cannot guarantee that we will be able to obtain the necessary financing to meet our needs or to obtain funds at attractive terms and

The ongoing COVID-19 pandemic has already caused extreme volatility and disruptions in the capital and credit markets.

A severe or prolonged economic downturn could result in a

variety of risks to us, including reduced ability to raise additional capital when needed and on acceptable terms, if at all.

We have initiated a global

restructuring plan in June 2020 to provide operational latitude to progress in the clinical development and regulatory review of investigational Viaskin Peanut in the United States and

European Union.

The full implementation of the restructuring plan will result in a reduction of more than 200 jobs, resulting in a remaining global team of 90 individuals dedicated to the pursuit of innovation and scientific development of novel

We expect full implementation of the organization-wide costs reduction measures to be completed by the second half of 2021 We expect to continue to incur significant expenses and

increasing operating losses for the foreseeable future.

We anticipate that our expenses will increase substantially in connection with our ongoing activities, as we:

continue our research, pre-clinical and clinical development of our

product candidates, including expanding the score of our trials for Viaskin Peanut;

seek regulatory and marketing approvals and pursue commercial activities for Viaskin Peanut, especially in North

America and in the European Union;

seek regulatory and marketing approvals for our other product candidates that successfully complete clinical

continue to establish a sales, marketing and distribution infrastructure to commercialize Viaskin Peanut, if

approved, and any other products for which we may obtain marketing approval, especially in North America and in the European Union;

further develop the manufacturing process for our product candidates;

change or add additional manufacturers or suppliers;

initiate and conduct any post-approval clinical trials, if required by the FDA or by the EMA, for our approved

products, if any;

initiate additional pre-clinical, clinical or other studies for our

product candidates;

seek to identify and validate additional product candidates;

acquire or in-license other product candidates and technologies;

reachmake milestone or meet other payments deadlines under any in-license

maintain, protect and expand our intellectual property portfolio;

attract and retain new and existing skilled personnel;

add operational, financial and management information systems and personnel, including personnel to support our

product development and commercialization efforts, as well as a company listed on both the U.S.

and French stock markets;

impacts of the ongoing COVID-19 pandemic;

experience any delays or encounter issues with any of the above.

Our financial statements have been prepared on a going concern basis assuming that we will be successful in our financing objectives.

As such, no adjustments

have been made to the financial statements relating to the recoverability and classification of the asset carrying amounts or classification of liabilities that might be necessary should we not be able to continue as a going concern.

Components of Our Results of Operations

Our operating income consists of other income, as we generated no revenue from our operating activities in 2019 or 2020.

Other Operating Income

Government Assistance

Due to the innovative nature of our product candidate development programs, we have benefited from a number of sources of assistance from the central

French government or local public authorities, intended to finance our

research and development efforts or the recruitment of specific personnel.

These funds are recognized as other income in our consolidated statement of operations for the fiscal year that recorded

the financed expenses or expenditures.

Research Tax Credits

The Research Tax Credit (Crédit dImpôt Recherche, or CIR) is granted to companies by the French tax authorities in order to encourage them

to conduct technical and scientific research.

Companies that prove that they have expenditures that meet the required criteria receive a tax credit that can be used for the payment of the corporate tax due for the fiscal year in which the

expenditures were made and the next three fiscal years, or, as applicable, can be reimbursed for the excess portion.

The expenditures taken into account for the calculation of the research tax credit involve only research expenses.

If a company meets certain criteria in terms of sales, headcount or assets to be considered a small/middle size company, immediate payment of the Research Tax

Credit can be requested.

Since the beginning in the fiscal year ending December 31, 2019, we no longer benefit from the immediate reimbursement of the Research Tax Credit due to the loss of the Small and

Medium-sized Enterprises (SMEs) status under EU law.

The Research Tax Credit will now be refunded three years after the tax declaration in the event we cannot offset it against corporate income tax due.

The repayable portion of the Research Tax Credit in more than one year is recorded in other non-current assets

Collaboration agreement with Nestlé

Health Science

On May 31, 2016, we announced our entry into an exclusive global collaboration with Nestlé

Health Science to develop MAG1C, a ready-to-use and standardized atopy patch test tool for the diagnosis of cows milk protein allergy in infants and toddlers.

Under the terms of the exclusive

collaboration, we are responsible for leading the development activities of MAG1C up through a pivotal Phase III clinical program, and if appropriate regulatory approvals are received, Nestlé

Health Science will support the

commercialization of MAG1C globally, while prioritizing certain agreed-upon countries.

We entered into an amendment with Nestlé

Health Science on July 12, 2018.

We are eligible to receive up to 100.0 million in potential

development, clinical, regulatory and commercial milestones, inclusive of a non-refundable upfront payment of 10.0 million that we received in July 2016.

In 2020, the ongoing COVID-19 pandemic impacted our current clinical trials, including the Phase II clinical

trial conducted as part of the development activities pursuant to the collaboration and license agreement with Nestlé

Health Science.

We experienced a decrease in new patients enrolling in this Phase II

clinical trial and modified the protocols of the clinical trial.

As a result of these delays, we expect to incur additional clinical and production costs related to the Phase II clinical trial.

Accordingly, as of December 31, 2020, we updated our measurement of progress of the PII conducted as part of the collaboration and

license agreement with Nestlé

and updated the cumulative income recognized.

We have recorded an accrual in the amount of the excess between our current best estimates of costs yet to be incurred and

incomes yet to be recognized for the completion of the PII.

Operating Expenses

Since inception, our operating expenses have consisted primarily of research and development activities, general and administration costs and sales and

marketing costs.

Research and Development

We engage in substantial research and development efforts to develop innovative pharmaceutical product candidates.

Research and development expense consists

primarily of:

cost of third-party contractors such as contract research organizations, or CROs, that conduct our non-clinical studies and clinical trials;

personnel costs, including salaries, related benefits and share-based compensation, for our employees engaged in

scientific research and development functions;

purchases, real-estate leasing costs, as well as conferences and travel costs;

depreciation, amortization and provisions.

Our direct research and development expenses consist principally of external costs, such as startup fees paid to investigators, consultants, central

laboratories, and CROs in connection with our clinical trials, and costs related to acquiring and manufacturing clinical study materials.

We do not allocate personnel-related costs, costs associated with our general platform improvements,

depreciation or other indirect costs to specific programs, as they are deployed across multiple projects under development and, as such, are separately classified as personnel and other expenses.

Research and development activities are central to our business.

Product candidates in later stages of clinical development generally have higher development

costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We expect that our research and development expenses will continue to increase in the foreseeable future as

we initiate clinical trials for certain product candidates and pursue later stages of clinical development of our product candidates.

In the year ended

December 31, 2020, we spent $101.6 million in research and development expenses to advance the development of our product candidates.

The following table provides a breakdown of our direct research and development expenses for our two lead

development programs, as well as expenses not allocated to the programs and share-based compensation expenses included in research and development expenses, for the years ended December 31, 2020 and 2019, respectively:

Year Ended December 31,

Research and development expenses related to Viaskin Peanut (1)

As a percentage of research and development expenses, excluding share-based compensation

Research and development expenses related to Viaskin Milk (1)

As a percentage of research and development expenses excluding share-based compensation

Other research and development

Total research and development expenses, excluding share-based compensation expense

Share-based compensation expenses included in research and development expenses

Total research and development expenses

Excludes employee share-based compensation expense.

We cannot determine with certainty the duration and completion costs of the current or future clinical

trials of our product candidates or if, when, or to what extent we will generate revenue from the commercialization and sale of any of our product candidates that obtain regulatory approval.

We may never succeed in achieving regulatory approval for

any of our product candidates.

The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, many of which are outside of our control including:

the FDAs approval of our BLA for Viaskin Peanut;

the costs of future commercialization activities, including product sales, marketing, manufacturing and

distribution, for any of our product candidates for which we receive marketing approval, especially in North America;

the costs of securing manufacturing arrangements for commercial production;

revenue, if any, received from commercial sales of our product candidates, should any of our product candidates

receive marketing approval;

the scope, progress in, results and the costs of, our pre-clinical studies and clinical trials and other research

and development programs, particularly as we seek regulatory and marketing approvals for our product candidates that successfully complete clinical trials;

the scope, prioritization and number of our research and development programs;

the costs, timing and outcome of regulatory review of our product candidates;

the achievement of milestones or occurrence of other developments that trigger payments under our existing

collaboration agreements, and any additional collaboration agreements we may enter into;

the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under

our existing collaboration agreements and future collaboration agreements, if any;

the costs involved in filing, prosecuting, enforcing and defending patent claims and other intellectual property

A change in the outcome of any of these variables with respect to the development and commercialization of Viaskin Peanut, if

approved, or any other product candidate that we are developing could mean a significant change in the costs and timing associated with the development and commercialization of Viaskin Peanut, if approved, or such other product candidate.

example, if the FDA or other regulatory authority were to require us to conduct pre-clinical and clinical trials beyond those which we currently anticipate will be required for the completion of clinical development, if we experience significant

delays in enrollment in any clinical trials or if the FDA or other regulatory authority were to require us to conduct post-approval clinical trials, we could be required to spend significant additional financial resources and time on the completion

of the clinical development and potential launch of commercialization.

and Marketing

Sales and marketing expense consists primarily of personnel costs, consultant fees and share-based compensation for sales and

marketing employees, as well as fees related to pre-commercialization activities for Viaskin Peanut in North America and in the European Union, other consulting fees and travel costs.

We anticipate that our

sales and marketing expenses will increase in the future as we prepare for the potential launch and commercialization of Viaskin Peanut in North America and in the European Union, if approved.

General and Administrative

General and administrative expense consists primarily of personnel costs and share-based compensation for finance, legal, IT and administrative employees.

General and administrative expense also consists of costs related to obtaining a directors and officers liability insurance policy and fees for professional services, mainly related to audit, tax and legal services, real-estate leasing costs,

insurance costs, consulting costs, investor relations costs and corporate communication and travel costs.

We anticipate that our general and

administrative expenses will increase in the future as we increase our headcount to support the expected growth in our research and development activities and the potential launch and commercialization of Viaskin Peanut in North America and in

European Union, if approved.

We also anticipate continued increased expenses associated with being a public company in the United States.

Restructuring Costs

We initiated a global

restructuring plan in June 2020 to provide operational latitude to progress in the clinical development and regulatory review of investigational Viaskin Peanut in the United States and

European Union.

We expect full implementation of the restructuring plan to result in a reduction of more than 200 jobs, resulting in a remaining global team of 90 individuals dedicated to the pursuit of innovation and scientific development of novel

We expect full implementation of the organization-wide costs reduction measures to be completed by the second half of 2021.

The restructuring

costs, which were $23.6 million as of December 31, 2020, are mainly comprised of payroll expenses, restructuring-related consulting and legal fees, as well as impairment of facilities and right of use assets following resizing of

Finance Income (Expense)

cash and cash equivalents have been deposited primarily in savings and deposit accounts with a remaining maturity at the date of purchase of three months or less, allowing the funds to be freely withdrawn at any time without significant penalty.

Savings and deposit accounts generate a limited amount of interest income, with very low counterparty risks.

We expect to continue this investment strategy.

Results of Operations

The following table summarizes our results of operations;

derived from our consolidated financial statements, have been prepared in compliance with generally

accepted accounting principles in the United States, or U.S.

GAAP, and presented in thousands of U.S.

Dollars for the years ended December 31, 2020 and 2019:

(Amounts in thousands of U.S.

Operating income

Operating expenses :

Research and development expenses

Sales & marketing expenses

General & administrative expenses

Restructuring expenses

Total Operating expenses

Financial expenses

Basic/diluted Net loss per share attributable to shareholders

Comparison of the Years Ended December 31, 2020 and 2019

Operating Income

We generated operating income of

$11.3 million in 2020 compared to $14.7 million in 2019, a decrease of 23.3%.

This income was mainly generated from the French research tax credit ( cr é

dit d imp ô

recherche) , or CIR, and by revenue recognized under our collaboration agreement with Nestlé

Health Science.

Year Ended December 31,

(Amounts in thousands of U.S.

Research tax credit

Other operating income

Total operating income

In 2020, we recognized income of $1.3 million under our collaboration with Nestlé

Health Science.

2016, we announced our entry into an exclusive global collaboration with Nestlé

Health Science to develop MAG1C, a ready-to-use and standardized atopy patch test

tool for the diagnosis of cows milk protein allergy in infants and toddlers.

Under the terms of the exclusive collaboration, we are responsible for leading the development activities of MAG1C up through a pivotal Phase III clinical

program, and if appropriate regulatory approvals are received, Nestlé

Health Science will support the commercialization of MAG1C globally, while

prioritizing certain agreed-upon countries.

We entered into an amendment with Nestlé

Health Science on July 12, 2018.

We are eligible to receive up

to 100.0 million in potential development, clinical, regulatory and commercial milestones, inclusive of a non-refundable upfront payment of 10.0 million that we received in July 2016.

In 2020, the ongoing COVID-19 pandemic impacted our current clinical trials, including the Phase II clinical

trial (PII) conducted as part of the development activities pursuant to the collaboration and

license agreement with Nestlé

Health Science.

We experienced a decrease in new patients enrolling in this Phase II clinical trial and modified the

protocols of the clinical trial.

As a result of these delays, we expect to incur additional clinical and production costs related to the Phase II clinical trial.

Accordingly, as of December 31, 2020, we updated our measurement of progress of the PII conducted as part of the collaboration and

license agreement with Nestlé

and updated the cumulative income recognized.

We have recorded an accrual in the amount of the excess between our current best estimates of costs yet to be incurred and

income yet to be recognized for the completion of the PII.

Operating Expenses

Restructuring costs are presented as a separate line item in the Statement of Operations as of December 31, 2020.

We have also updated our assumptions to

take into account a delay in timelines for regulatory approval of Viaskin Peanut impacts arising from the restructuring.

Research and Development

The following table summarized our research and development expenses for the years presented:

(Amounts in thousands of U.S.

Personnel expenses

Sub-contracting, Collaboration, and Consultants

Depreciation and amortization

Small equipment and other supplies

Conferences and travel expenses

Total Research and Development expenses

Our research and development expenses consisted primarily of external costs, such as startup fees paid to investigators,

consultants, central laboratories and CROs in connection with our clinical trials, and costs related to acquiring and manufacturing clinical study materials.

Research and development expense decreased by $13.5 million or 11.7% in the year ended December 31, 2020 compared to the year ended December 31, 2019,

primarily due to a decrease of 46% in personnel expenses in 2020 compared to 2019, which decrease reflects reduced bonuses, employee retention measures and share-based compensation expenses, directly related to the decrease in the average workforce

as we completed our global restructuring plan.

The average workforce dedicated to Research and Development decreased in comparison to 2019 (from 215 employees in 2019 to 186 employees in 2020).

Decrease in research and development expense is also due to a decrease of 8.9% in sub-contracting, collaborations and

consultants mainly due to the budget discipline measures and COVID-19 effects partially offset by an increase in depreciation and amortization driven by inventory depreciation and accelerated depreciation of

PP&E linked with the early termination of several leases pursuant to restructuring.

Sales and Marketing Expenses

The following table summarized our sales and marketing expenses for the years presented:

(Amounts in thousands of U.S.

Personnel expenses

Marketing, tradeshows and travel expenses

Depreciation and amortization

Total Sales & Marketing expenses

Sales and marketing expenses primarily included payroll for the U.S.

employees, as well as fees related to pre-commercialization activities for Viaskin Peanut in North America

Sales and marketing expense decreased by

$11.7 million, or 54.2% in 2020 compared to 2019, primarily due to a decrease in personnel expenses by 63.3% compared to 2019, including bonuses, employee retention measures and share-based compensation expenses, directly related to the

decrease in the average workforce as we completed our global restructuring plan.

The average workforce dedicated to sales and marketing decreased in comparison to 2019 (from 35 employees in 2019 to 22 employees in 2020).

Decrease on sales and marketing expenses is also due to decrease of $2.2 million in fees and marketing in line with budget discipline exercised and the

impacts of the ongoing COVID-19 pandemic on tradeshows and travel expenses.

General and Administrative

The following table summarized our general and administrative expenses for the years presented:

(Amounts in thousands of U.S.

Personnel expenses

Insurance policies

Corporate communication and travel expenses

Depreciation and amortization

Total General & Administrative expenses

General and administrative expenses were $35.1 million in 2020, compared to $49.1 million in 2019, or a decrease of

General and administrative expenses decreased by $14.0 million or 28.5% in 2020 compared to 2019, primarily due to decreased in personnel

expenses by 64.7% compared to 2019, including bonuses, employee retention measures and share-based compensation expenses, directly related to the decrease in the average workforce as we completed our global restructuring plan.

The average workforce

dedicated to general and administrative expenses decreased in comparison to 2019 (from 69 employees in 2019 to 63 employees in 2020)

Insurance policies increased by $3.0 million and mainly relates to the increase in Directors and

Officers insurance premium.

Restructuring

following table summarizes restructuring costs as of December 31, 2020 included in the statement of operations:

(Amounts in thousands of U.S.

Employee-related expenses

Effects of restructuring on leases

Other restructuring costs

Total restructuring costs

We initiated a global restructuring plan in June 2020 to provide operational latitude to progress in the clinical development

and regulatory review of investigational Viaskin Peanut in the United States and European Union.

We expect full implementation of the restructuring plan to result in a reduction of more than

200 jobs, resulting in a remaining global team of 90 individuals dedicated to the pursuit of innovation and scientific development of novel therapies.

We expect full implementation of the organization-wide costs reduction measures to be completed by

the second half of 2021.

The restructuring costs of $23.6 million as of December 31, 2020 are mainly comprised of payroll expenses,

restructuring-related consulting and legal fees, as well as impairment of facilities and right of use assets following resizing of facilities.

following table summarizes restructuring flows as of December 31, 2020 included in current provisions and other current liabilities on the statement of consolidated financial position:

(Amounts in thousands of U.S.

Restructuring

Restructuring liability - January 1, 2020

Restructuring costs

Restructuring costs non-cash items

Restructuring liability - December 31, 2020

of which current provisions

of which other current liabilities

Financial loss

financial loss was $0.7 million in 2020, compared to a loss of $0.4 million in 2019.

This item includes the financial revenues on our financial assets and foreign exchange losses.

Liquidity and Capital Resources

The table below summarizes our sources and uses of cash for the years ended December 31, 2020 and 2019.

Year Ended December 31,

(in thousands of U.S.

Net cash flow used in operating activities

Net cash flow used in investing activities

Net cash flow provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Operating Activities

Our net cash flows used in operating activities were $165.6 million and $148.3 million in 2020 and 2019 respectively.

Our net cash flows used in

operating activities increased by $17.3 million mainly due to restructuring cash out and effect of Research Tax Credit as it will now be refunded three years after the tax declaration.

Investing Activities

Our net cash flows used in

investing activities were $2.9 million and $5.7 million in 2020 and 2019 respectively.

Those investments were mainly for our industrial machinery and equipment, which are commissioned in order to support the commercialization of Viaskin

Peanut, if approved.

Financing Activities

Our net cash flows resulting from financing activities decreased to $149.5 million in 2020 from $207.6 million in 2019.

Financing activities

consisted mainly of our underwritten global offerings in 2019 and in 2020.

Consistent with customary practice in the French securities market, we entered

into a liquidity agreement ( contrat de liquidité

) with Natixis on April 13, 2012.

The liquidity agreement complies with applicable laws and regulations in France.

The liquidity agreement authorizes Natixis to carry out market

purchases and sales of our shares on Euronext Paris.

The amount is classified in other non-current financial assets in our statement of financial position.

At December 31, 2020, 112,302 shares and

$0.3 million were in the liquidity account.

The liquidity agreement has a term of one year and will renew automatically unless otherwise terminated by either party.

Cash and Funding Sources

During 2019 and 2020, we

obtained the following financing on the public markets by issuance of securities, net of commissions and estimated offering expenses:

(thousands of U.S.

We have incurred net losses each year since our inception.

Substantially all of our net losses resulted from

costs incurred in connection with our development programs and from general and administrative expenses associated with our operations.

incurred any bank debt.

Capital Expenditures

the clinical research and development expenditures are expensed until marketing authorizations are obtained, the principal investments made over 2019 and 2020 have been related primarily to the industrial machinery and equipment, which are expected

to be commissioned in order to support the commercialization of Viaskin Peanut, if approved and, secondarily, to the acquisition of computer and office equipment.

Funding Requirements

On December 31, 2020, we had

$196.4 million in cash and cash equivalents compared to $193.3 million of cash and cash equivalents on December 31, 2019.

We have incurred operating losses and negative cash flows from operations since our inception.

Net cash used for

operating activities was respectively $165.6 and $148.4 million for the years 2020 and 2019.

As of December 31, 2020, we recorded a net loss of $159.6 million.

Since our inception, we have primarily funded our operations with equity financings, and, to a lesser extent, public assistance aimed at supporting innovation

and payments associated with French administration on research tax credits (Crédit Impôt Recherche).

We do not generate product revenue and continue to prepare for the potential launch of our first product in the United States and in

the European Union, if approved.

Following receipt of a CRL from the FDA in connection with our BLA for Viaskin Peanut, beginning in August 2020, we

scaled down our other clinical programs and pre-clinical spend to focus on Viaskin Peanut.

We also initiated a global restructuring plan in June 2020 to provide operational latitude to progress the clinical

development and regulatory review of Viaskin Peanut in the United States and European Union.

Based on guidance received from the FDA in January 2021, that we plan to implement, and expected cost savings from implementation of the global

restructuring plan, we expect that our current balance of cash and cash equivalents of $196.4 million as of December 31, 2020 will be sufficient to fund our operations to the second half of 2022.

We intend to seek additional capital as it prepares for the launch of Viaskin Peanut, if approved, and continues other research and development efforts.

may seek to finance its future cash needs through a combination of public or private equity or debt financings, collaborations, license and development agreements and other forms of non-dilutive financings.

a result of disruptions to the global financial markets as a result of the ongoing COVID-19 pandemic, we cannot guarantee that we will be able to obtain the necessary financing to meet our needs or to obtain

funds at attractive terms and conditions.

The ongoing COVID-19 pandemic has already caused extreme volatility and disruptions in the capital and credit markets.

A severe or prolonged economic downturn could

result in a variety of risks for us, including reduced ability to raise additional capital when needed and on acceptable terms, if at all.

Our financial

statements have been prepared on a going concern basis as of December 31, 2020.

Contractual Obligations and Commitments

The following table discloses aggregate information about material contractual obligations and periods in which payments were due as of December 31, 2020.

Future events could cause actual payments to differ from these estimates.

(Amounts in thousands of U.S.

Conditional advances

Operating leases

Purchase obligations - Obligations Under the Terms of CRO Agreements

The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that

specify all significant terms, including interest on long-term debt, fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts.

The table does not include

obligations under agreements that we can cancel without a significant penalty.

Our corporate headquarters are located in Montrouge, France.

Our principal

offices occupy a 4,470 square meter facility consisting of office and laboratory space, pursuant to a lease agreement dated March 3, 2015, which expires on March 8, 2024.

We entered into an additional lease for offices in Montrouge, France

in July 2018.

This facility consists of 1,808 square meters of office space, pursuant to a lease agreement dated July 1, 2018, which initially expires on June 30, 2027.

In December 2020, in light of our global restructuring, we notified

the landlord of our intention to terminate the lease for the additional office space as of June 30, 2021.

We also have two facilities in Bagneux,

These facilities consist of 2,237 square meters of office and laboratory space and are used primarily by our industrial and production teams.

One of the facilities is our pharmaceutical manufacturing establishment, which is focused on the

quality control of our manufactured therapeutic patches.

In April 2018, we entered into an addendum to our lease for an additional 500 square meters of office space in building B of Green Square, Bagneux, France.

These facilities are leased under

one agreement, which initially expires on May 31, 2030.

In December 2020, we notified the landlord of our intention to terminate the lease agreement for both spaces as of August 31, 2021.

We also have facilities in North America that were initially intended to support our U.S.

subsidiary as well as future commercialization needs.

We lease 3,780

square feet of office space in Tower 49, New York, New York.

This lease is for a period of 65 months and expires on February 25, 2023.

In light of our global restructuring, the current stage of regulatory interactions regarding Viaskin Peanut,

and the ongoing COVID-19 pandemic, we are currently seeking to sublease this office space, subject to landlord consent.

In September 2016, we entered into a lease for a commercial facility of 8,919 square feet

in Summit, New Jersey, which is intended to support the launch and commercialization of Viaskin Peanut in North America, if the appropriate regulatory approvals are received.

In July 2018, we entered into a lease for an additional 12,629 square feet

in the same building and made both leases co-terminus on July 10, 2028.

This lease includes extension options of two five-year periods.

In light of our global restructuring and the current stage of

regulatory interactions regarding Viaskin Peanut, we are currently seeking to sublease the additional 12,629 square feet, subject to landlord consent.

connection with the launch of our clinical trials for Viaskin Peanut and Viaskin Milk, we signed agreements with several contract research organizations.

Expenses associated with the ongoing trials amounted globally to 175.0 million.

of December 31, 2020, the amount we are still obligated to pay in connection with these contracts through 2023 is $45.3 million.

Critical Accounting Policies and Significant Judgments and Estimates

Our financial statements are prepared in accordance with U.S.

Some of the accounting methods and policies used in preparing our financial statements

GAAP are based on complex and subjective assessments by our management or on estimates based on past experience and assumptions deemed realistic and reasonable based on the facts and circumstances concerned.

The actual value of our

assets, liabilities and shareholders equity and of our earnings could differ from the value derived from these estimates if conditions changed and these changes had an impact on the assumptions adopted.

We believe that the most significant

management judgments and assumptions in the preparation of our financial statements are described below.

See Note 1 to our financial statements for a description of our other significant accounting policies.

Revenue Recognition - Collaboration agreement with Nestlé

Health Science

On May 31, 2016, we announced our entry into an exclusive global collaboration with Nestlé

Health Science to develop MAG1C, a ready-to-use and standardized atopy patch test tool for the diagnosis of cows milk protein allergy in infants and toddlers.

Under the terms of the exclusive

collaboration, we are responsible for leading the development activities of MAG1C up through a pivotal Phase III clinical program, and if appropriate regulatory approvals are received, Nestlé

Health Science will support the

commercialization of MAG1C globally, while prioritizing certain agreed-upon countries.

We entered into an amendment with Nestlé

Health Science on July 12, 2018.

We are eligible to receive up to 100.0 million in potential

development, clinical, regulatory and commercial milestones, inclusive of a non-refundable upfront payment of 10.0 million that we received in July 2016.

In 2020, the ongoing COVID-19 pandemic impacted our current clinical trials, including the Phase II

(PII) clinical trial conducted as part of the development activities pursuant to the collaboration and license agreement with Nestlé

Health Science.

We experienced a decrease in new patients

enrolling in this Phase II clinical trial and modified the protocols of the clinical trial.

As a result of these delays, we expect to incur additional clinical and production costs related to the Phase II

clinical trial.

Accordingly, as of December 31, 2020, we updated our measurement of progress of the PII conducted as part of the

collaboration and license agreement with Nestlé

and updated the cumulative income recognized.

We have recorded an accrual in the amount of the excess between our current best estimates of costs yet to

be incurred and income yet to be recognized for the completion of the PII.

Share-Based Compensation

We have various share-based compensation plans for employees and non-employees.

We account for share-based compensation

in accordance with the authoritative guidance on share-based compensation.

Under the fair value recognition provisions of this guidance, share-based compensation is measured at the grant date based on the fair value of the award and is recognized as

expense, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award.

Determining the

fair value of the share-based payments at the grant date requires judgment.

We calculated the fair value of stock options on the grant date using the Black-Scholes option pricing model.

The Black-Scholes model requires the input of highly subjective

assumptions, including the expected volatility, expected term, risk-free interest rate and dividend yield.

Exercise price

The exercise price of our stock options is based on the fair market value of our ordinary shares.

Risk-free interest rate

The risk-free interest rate is

based on French government bonds (GFRN) with a maturity corresponding to the maturity of the share options.

Expected term

We determine the expected term based on the average period the stock options are expected to remain outstanding.

Expected Volatility

We determine the expected volatility

based on the historical data period corresponding to the stock options expected maturity.

Expected Dividend yield

We have never declared or paid any cash dividends and we do not presently plan to pay cash dividends in the foreseeable future.

Consequently, we use an

expected dividend yield of zero.

In the following table, the weighted average fair value of underlying shares are provided in euros, as we are

incorporated in France and the euro is the currency used for the grants.

We estimated the following assumptions for the calculation of the fair value of

our stock options:

Assumptions per years

ended, December 31,

Stock options per grant date

Weighted average fair value of underlying shares in *

Weighted average expected volatility

Weighted average risk-free interest rate

Weighted average expected term (in years)

Dividend yield

The weighted average fair value of underlying shares is presented in euros, as we are incorporated in France

and the euro is the currency used for the grants.

Smaller Reporting Company Status

We are a smaller reporting company as defined in the Securities Exchange Act of 1934, as amended.

We may, and intend to, take advantage of certain of the

scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as we are a smaller reporting company.

We may be a smaller reporting company in any year in which (i) the

market value of our voting and non-voting ordinary shares held by non-affiliates is less than $250.0 million measured on the last business day of our

second fiscal quarter or (ii) (a) our annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of our voting

and non-voting ordinary shares held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal

Off-balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as

defined in the rules and regulations of the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity