What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-02 compared with 2022-03-09 · 98 added, 167 removed, 260 unchanged (50% of the section changed)

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

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

We have generated significant data demonstrating that Viaskin’s 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 as anaphylactic shock.

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.

In January 2021, we received written responses from the FDA to questions provided in the Type A meeting request we submitted in October 2020 following the CRL.

In order to respond to the FDA’s requests and recommendations, we defined parallel workstreams primarily in order to generate the 6-month safety and adhesion clinical data to assess a modified Viaskin Peanut patch and demonstrate the equivalence in allergen uptake between the current and modified patches in the intended patient population.

Following the submission of the adhesion study’s protocol to the FDA, we received an Advice/Information Request letter from the FDA in October 2021, requesting a stepwise approach to the modified Viaskin patch development program and provided partial feedback on this protocol.

In December 2021, we decided not to pursue the sequential approach to the development plans for Viaskin Peanut as requested by the FDA in the October 2021 feedback and announced our plan to initiate a pivotal Phase 3 clinical study for a modified Viaskin Peanut patch (mVP) in children in the intended patient population.

We consider this approach as the most straightforward approach to demonstrate effectiveness, safety, and improved

in vivo adhesion of the modified Viaskin Peanut system.

After the FDA confirmed our change in strategy is agreeable, the protocol for the new Phase 3 pivotal study of the modified Viaskin Peanut (“mVP”) patch was completed at the end of February 2022 and has been prepared for FDA submission.

We are currently engaged in discussions with FDA in preparation for protocol submission and review.

We expect to complete protocol submission following further alignment with FDA.

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, an epicutaneous patch (i.e., a skin patch).

We have generated significant data demonstrating that Viaskin’s mechanism of action is novel and differentiated.

Viaskin 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 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 as anaphylactic shock.

We believe Viaskin may offer convenient, self-administered, non-invasive immunotherapy to patients, if approved.

Our most advanced product candidate is Viaskin Peanut, which has been evaluated as a potential therapy for children with peanut allergy in nine clinical trials, including four Phase 2 trials and three completed Phase 3 trials.

We recently completed a Phase 3 trial of Viaskin Peanut in children ages one to three with peanut allergy and we also have an ongoing Phase 3 trial of Viaskin Peanut in children ages four to seven with peanut allergy.

Financial Overview

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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.

Based on our current operations, as well as our plans and assumptions as revised pursuant to our change of strategy announced in December 2021, we expect that our balance of cash and cash equivalents of $77.3 million as of December 31, 2021 will be sufficient to fund our operations into the first quarter of 2023.

As of the date of the filing, our available cash is not projected to be sufficient to support our operating plan for at least the next 12 months.

As such, there is substantial doubt regarding our ability to continue as a going concern.

Based on its current operations, plans and assumptions as revised pursuant to 2022 announcements related to EPITOPE Phase 3 study topline results and VITESSE Phase 3 partial clinical hold lift, as well as ATM and PIPE financings, the Company expects that its balance of cash and cash equivalents of $209.2 million as of December 31, 2022 will be sufficient to fund its operations for at least the next 12 months.

We intend to 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.

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, including as a result of disruptions to the global financial markets due to the ongoing COVID-19 pandemic.

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

The ongoing COVID-19 pandemic and conflict in Ukraine have 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 or on acceptable terms, if at all.

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continue our research, pre-clinical and clinical development of our product candidates, including expanding the scope 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 and pursue commercial activities for Viaskin Peanut, primarily in North America and in the European Union;

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

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and French stock markets;

handle impacts of the ongoing COVID-19 pandemic;

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

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Impact of COVID-19 on our Business

The COVID-19 pandemic continues to adversely affect global economies, financial markets and the overall

environment in which we do business.

Our ability to conduct clinical trials has been and may continue to be affected by the COVID-19 pandemic.

The COVID-19 pandemic has adversely affected global economies, financial markets and the overall environment in which we do business.

Our ability to conduct clinical trials was and may continue to be affected by any future resurgences of the COVID-19 pandemic.

As the full impact of the COVID-19 pandemic on our business continues to develop, we are closely monitoring the global situation.

We are unable to predict the full impact that COVID-19 will have on our operations, liquidity and financial results, and, depending on the magnitude and duration of the COVID-19 pandemic, such impact may be material.

We are unable to predict the full impact that COVID-19 will have on our operations, liquidity and financial results, and, depending on the magnitude and duration of any future resurgences of the COVID-19 pandemic, such impact may be material.

Accordingly, current results and financial condition discussed herein may not be indicative of future operating results and trends.

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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.

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.

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.

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Research Tax Credits

The Research Tax Credit ( Crédit d’Impôt Recherche

, or CIR) is granted to companies by the French tax authorities in order to encourage them to conduct technical and scientific research.

The Research Tax Credit ( Crédit d’Impôt 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.

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Beginning in the fiscal year ending December 31, 2021, we recovered our SME status, and became therefore eligible again for the immediate reimbursement of the CIR.

We will request the immediate reimbursement of the

2021 fiscal year CIR, as well as former tax credit receivables for 2019 and 2020 fiscal years, for a total amount of $28.1 million.

During the fiscal year ending December 31, 2022, the Company received the reimbursement of the 2019, 2020 and 2021 fiscal year research tax credits for a total amount of $26.1 million.

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 cow’s 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.

Under the terms of the exclusive collaboration, we are responsible for leading the development activities of MAG1C up through a pivotal Phase 3 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 2021 as in 2020, the ongoing COVID-19 pandemic impacted our current clinical trials, including the Phase II clinical trial, or 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 had to modify its protocols.

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

Accordingly, as of December 31, 2021, we recorded our collaboration agreement’s revenue based on its updated measurement of progress of the PII conducted as part of the agreement.

The accrual recorded in the amount of the difference between our current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the PII has been updated accordingly

Our current clinical trials, including the Phase 2 clinical trial conducted as part of the development activities pursuant to the Development, Collaboration and License agreement with Nestlé Health Science, have been impacted by the Covid-19 pandemic, among other factors.

We have experienced difficulties in enrolling new patients in this Phase 2 clinical trial notwithstanding the implementation of a protocol amendment and various other strategies to improve recruitment.

As a result of the accumulation of recruitment delays, we expect to incur additional clinical and production costs related to the Phase 2 clinical trial as well as delays in achievement of upcoming milestones.

As of December 31, 2022, we recorded our collaboration agreement’s revenue based on our updated measurement of progress of the Phase 2 clinical trial conducted as part of the agreement.

The accrual recorded in the amount of the difference between our current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase 2 clinical trial has been updated accordingly.

The revision of the estimated costs for the year ended December 31, 2022 was $19.8 million compared to December 31, 2021, $9.8 million.

Operating Expenses

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Research and development expenditures are charged to expense as costs are incurred in performing research and development activities.

Research and development costs include all direct costs, including salaries, share-based payments and benefits for research and development personnel, outside consultants, costs of clinical trials, costs related to manufacturing clinical study materials, sponsored research, clinical trials insurance, other outside

costs, depreciation, and facility costs related to the development of drug candidates.

The Company records

upfront, non-refundable payments made to outside vendors, or other payments made in advance of services performed or goods being delivered, as prepaid expenses, which are expensed as services are performed or the goods are delivered.

Certain research and development projects are, or have been, partially funded by collaboration agreements, and

the expenses related to these activities are included in research and development costs.

The Company records

the related reimbursement of research and development costs under these agreements as income in the period in which such costs are incurred.

The Company records upfront, non-refundable payments made to outside vendors, or other payments made in advance of services performed or goods being delivered, as prepaid expenses, which are expensed as services are performed or the goods are delivered.

Certain research and development projects are, or have been, partially funded by collaboration agreements, and the expenses related to these activities are included in research and development costs.

The Company records the related reimbursement of research and development costs under these agreements as income in the period in which such costs are incurred.

Sales and Marketing

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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.

The full implementation of the organization-wide costs reduction measures was completed during the second half of 2021.

It resulted in a reduction of more than 200 jobs and a remaining global team of about 90 individuals dedicated to the pursuit of innovation and scientific development of novel therapies.

The restructuring costs were 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.

Finance Income (Expense)

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Basic/diluted Net loss per share attributable to shareholders

Percentage not meaningful

Operating Income

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We generated operating income of $4.8 million for the year ended December 31, 2022 compared to $5.7 million for the year ended December 31, 2021, a decrease of 15%.

This income was mainly generated from the French research tax credit (Crédit d’Impôt Recherche or CIR), and by revenue recognized under our collaboration agreement with Nestlé Health Science.

The decrease in operating income is primarily attributable to the change in the revenue recognized under the Nestlé’s collaboration agreement, as we updated the measurement of progress of the Phase II clinical trial conducted as part of the agreement due to delays in new patient enrollment.

The decrease in operating income is mainly attributable to the decrease in research tax credit eligible basis (studies ending in the course of 2022) and the change in the revenue recognized under the Nestlé’s collaboration agreement, as we updated the measurement of progress of the Phase 2 clinical trial conducted as part of the agreement due to delays in new patient enrollment.

The decrease in research tax credit is attributable to the decline in eligible expenses in connection with research and development expenses.

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Share-based payment expenses

Depreciation, amortization and other costs

Depreciation and amortization

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 expenses decreased by $31.3 million for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to a decrease in most items of expenses, partially offset by an increase in share-based payment expenses.

External clinical-related expenses decreased by $9.3 million for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to cost containment measures implemented starting the second half of 2020.

Employee-related costs, excluding share-based payment expenses, decreased by $12.1 million for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to the workforce reduction we implemented as part of our 2020 global restructuring plan.

The average workforce dedicated to Research and Development decreased from 186 employees in 2020 to 67 employees in 2021.

The decrease in depreciation, amortization and other costs was primarily due to the decrease in inventory depreciation, as we wrote down any inventories and work in progress to zero pending regulatory approval in the third quarter of 2020 following the CRL received from the FDA in August 2020.

This variation was partially offset by the accrual recorded in the amount of the difference between our current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase II clinical trial conducted as part of the Nestlé agreement.

Our share-based payment expenses increased by $1.0 million for the year ended December 31, 2021 compared to the year ended December 31, 2020 because we recognized share-based payment income for the year ended December 31, 2020 triggered by the reversal of share-based payment expenses due to employees’ departures in the context of our global restructuring plan.

Research and development expenses increased by $5.2 million for the year ended December 31, 2022 compared to the year ended December 31, 2021.

External clinical-related expenses increased by $2.9 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to upfront fees for the launch of Viaskin Peanut study for children ages 4-7 during the fourth quarter ended December 31, 2022.

Employee-related costs, excluding share-based payment expenses, decreased by $2.2 million for the year ended December 31, 2022 compared to the year ended December 31, 2021 due to the workforce reduction following full implementation of the new organization.

The increase in depreciation, amortization was primarily due to the increase of accrual recorded in the amount of the difference between our current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase 2 clinical trial conducted as part of the Nestlé agreement, partially offset by a decrease in tangible assets depreciation.

Sales and Marketing Expenses

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Sales and marketing expenses

External professional services expenses

Employee-related costs excl.

Employee-related costs incl.

share-based payment expenses

Share-based payment expenses (income)

Depreciation, amortization and other costs

External professional services and other costs

Total Sales and marketing expenses

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

employees for $1.6 million for the year ended December 31, 2021 compared to $7.3 million the year ended December 31, 2020, as well as fees related to pre-commercialization activities for Viaskin Peanut in North America for $1.6 million for the year ended December 31, 2021 compared to $3.2 million the year ended December 31, 2020.

Sales and marketing expenses decreased by $5.5 million for the year ended December 31, 2021 compared to the year ended December 31, 2021, primarily due to a decrease in employee-related costs and external professional services, partially offset by share-based payment expenses.

Employee-related costs, excluding share-based payments expenses, decreased by $5.8 million for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to the workforce reduction we implemented as part of our 2020 global restructuring plan.

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

Sales and marketing expenses decreased by $2.8 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to a decrease in employee-related costs, external professional services, and share-based payment expenses.

Employee-related costs (including share-based payments expenses) related to payroll for the U.S.

employees, decreased by $1.0 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to the workforce reduction we implemented as part of our 2020 global restructuring plan.

The average workforce dedicated to sales and marketing decreased in comparison to 2021, from 4 employees to 2 employees in 2022.

External professional services expenses decreased by $1.6 million for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily as a result of budget discipline measures.

The share-based payment expense recognized for the year ended December 31, 2021 and the income recognized for the year ended December 31, 2020 was triggered by the reversal of share-based payment expenses due to employees’ departures in the context of our restructuring plan

External professional services and other costs decreased by $1.8 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily as a result of budget discipline measures of pre-commercialization activities for Viaskin Peanut in North America.

General and Administrative Expenses

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Total General and administrative expenses

General and administrative expenses decreased by $4.6 million for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to cost containment measures and decreased external professional fees, partially offset by an increase in share-based payment expenses.

The lower share-based payment expense recognized for the year ended December 31, 2020 as compared to the share-based payment expense recognized for the year ended December 31, 2021 was partially triggered by the reversal of share-based payment expense due to employees’ departures in the context of our 2020 global restructuring plan

General and administrative expenses decreased by $6.2 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to cost containment measures and decreased external professional fees (decreased by 2.0 million), partially offset by an increase in share-based payment expenses.

The average workforce dedicated to general and administrative expenses decreased from 31 employees in 2021 to 27 employees in 2022.

Insurance policies increased by $1.5 million, mainly due to the increase in Directors and Officers insurance premium.

Restructuring

The following table summarizes restructuring costs as of December 31, 2021 and 2020 included in the statement of operations:

(Amounts in thousands of U.S.

Employee-related (income) expenses

Effects of restructuring on leases

Other restructuring costs

Total restructuring (income) expenses

Full implementation of the organization-wide cost reduction measures was completed during the second half of 2021, which resulted in a reduction of more than 200 jobs and in a remaining global team of about 90 people dedicated to the pursuit of innovation and scientific development of novel therapies.

The following table summarizes restructuring flows for the years endeds December 31, 2020 and 2021 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 contingencies

of which other current liabilities

Restructuring

Restructuring liability—January 1, 2021

Restructuring costs

Reversal of contingencies

Other effect including currency translation effect

Restructuring liability—December 31, 2021

of which current contingencies

of which other current liabilities

The reversal of contingencies is mainly comprised of unused accruals related to payroll.

Depreciation, amortization and other costs decreased by $4.9 million mainly due to the decrease of insurance policies by $2.7 million, mainly due to the decrease in Directors and Officers insurance premium.

Financial income (loss)

Our financial income was $0.4 million in 2021, compared to a loss of $0.7 million in 2020 and primarily includes the financial income on our financial assets and foreign exchange losses.

Our financial income was $0.4 million in 2022 and 2021, and primarily includes the financial income on our financial assets and foreign exchange gains.

Our income tax expense was $70,000 for the year ended December 31, 2022, compared to a US Tax income of $381,000 for the year ended December 31, 2021.

Net loss was $96.3 million for the year ended December 31, 2022, compared to $97.8 million for the year ended December 31, 2021.

Net loss per share (based on the weighted average number of shares outstanding over the period) was $1.24 and $1.78 for the year ended December 31, 2022 and 2021, respectively.

Liquidity and Capital Resources

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As of December 31, 2022, we recorded a net loss of $96.3 million.

Sources and Material Cash Requirements

Based on our current operations, as well as our plans and assumptions as revised pursuant to its change of strategy announced in December 2021 and accepted by the FDA, we expect that our balance of cash and cash equivalents of $77.3 million as of December 31, 2021 will be sufficient to fund our operations into the first quarter of 2023.

Our net cash flows provided by financing activities totaled $194.1 million in 2022, mainly consisting of our global offering in the second quarter of 2022.

Sources of Liquidity and Material Cash Requirements

We fund short-term cash requirements primarily from payments associated with research tax credits ( Crédit d’Impôt Recherche ).

In May 2022, we established an At-The-Market (“ATM”) program to offer and sell, including with unsolicited investors who have expressed an interest, a total gross amount of up to $100 million of American Depositary Shares (“ADSs”), each ADS representing one-half of one ordinary share of the Company The ATM program is intended to be effective through the expiration of the Company’s existing registration statement registering the ADSs to be issued under the ATM program, i.e.

until July 16, 2024, unless terminated prior to such date in accordance with the sales agreement or the maximum amount of the program has been reached.

The Company intent is to use the net proceeds, if any, of sales of ADSs issued under the program, together with its existing cash and cash equivalents, primarily for activities associated with potential approval and launch of Viaskin Peanut, as well as to advance the development of the Company’s product candidates using its Viaskin Platform and for working capital and other general corporate purposes.

Pursuant to the ATM program, we issued and completed sales of new ordinary shares in form ADSs for a total gross amount of $15.3 million ($14.1 million net of transaction costs), each ADS representing one-half of one ordinary shares of the Company.

The new ordinary shares were issued and delivered on May 6, 2022, and represent 10.96% of the existing shares already admitted to trading by this date.

In June 2022, we announced an aggregate $194 million private investment in public equity (“PIPE”) financing from the sale of 32,855,669 ordinary shares, as well as pre-funded warrants to purchase up to 28,276,331 ordinary shares.

The ordinary shares were sold to the purchasers at a price per ordinary share of €3.00 (corresponding to $3.22), and the pre-funded warrants at a pre-funded price of €2.90 (corresponding to $3.11) per pre-funded warrant, which equals the per share price for the ordinary shares less the remaining €0.10 exercise price for each such pre-funded warrant.

Gross proceeds from PIPE financing total $194 million ($180.4 million net of transaction costs), before deducting private placement expenses.

During the years ended December 31, 2022 and 2021, we obtained the following financing on the public markets by issuance of securities, net of commissions and estimated offering expenses:

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(Amounts in thousands of U.S.

In February 2020, the Company announced the closing of an underwritten global offering of an aggregate of 7,500,000 ordinary shares in (i) a public offering of 4,535,581 ordinary shares in the form of 9,071,162 American Depositary Shares (“ADSs”) in the United States, Canada and certain countries outside Europe at a public offering price of $10.25 per ADS (on the basis of an exchange rate of $1.0999 = €1.00), and (ii) an offering exclusively addressed to qualified investors in Europe (including France) of 2,964,419 ordinary shares at an offering price of €18.63 per ordinary share (together, the “Global Offering”).

In March 2020, the Company announced that the underwriters partially exercised their option to purchase 338,687 additional ordinary shares in the form of 677,374 ADSs at an offering price of $10.25 per ADS, before deducting commissions and estimated offering expenses (the “Option”).

The Option closed on March 4, 2020.

Consequently, following partial exercise of the Option, the total number of ordinary shares sold in the global offering was 7,838,687 ordinary shares, including 4,874,268 ordinary shares in the form of 9,748,536 ADSs, bringing the total gross proceeds from the global offering to $160.7 million and net proceeds of $150.0 million.

We have incurred net losses each year since our inception.

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We have not incurred any bank debt.

As of the date of the filing, our available cash is not projected to be sufficient to support our operating plan for at least the next 12 months.

As such, there is substantial doubt regarding our ability to continue as a going concern.

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

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

The ongoing COVID-19 pandemic and the conflict in Ukraine have 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 or on acceptable terms, if at all.

If we are not successful in our financing objectives, we could have to scale back its operations, notably by delaying or reducing the scope of its research and development efforts or obtain financing through arrangements with collaborators or others that may require us to relinquish rights to its product candidates that we might otherwise seek to develop or commercialize independently.

If we are not successful in our financing objectives, we could have to scale back its operations, notably by delaying or reducing the scope of our research and development efforts or obtain financing through arrangements with collaborators or others that may require us to relinquish rights to our product candidates that we might otherwise seek to develop or commercialize independently.

The following table presents our material cash requirements for future periods:

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(Amounts in thousands)

Conditional advances

Operating leases

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This amount was received in a single disbursement on November 27, 2014.

In 2020, due to the COVID-19 pandemic, Bpifrance postponed the repayments for a 6-month

Repayment will end during the third quarter of 2022.

In 2020, due to the COVID-19 pandemic, Bpifrance postponed the repayments for a 6-month period.

Repayment ended during the third quarter of 2022.

Operating leases

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Our primary U.S.

office is located in Summit, New Jersey.

In September 2016, we entered into a lease for a commercial facility of 8,919 square feet in Summit, New Jersey, which intended to support the launch and commercialization of Viaskin Peanut in North America, if the appropriate regulatory approvals were 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 included extension options of two five-year periods.

The Summit offices represent a $5.2 million cash requirement as of December 31, 2021 which expires July 10, 2028.

In light of our global restructuring and the current stage of regulatory interactions regarding Viaskin Peanut, the company entered into a termination agreement for its U.S.

The agreement provided for the termination of the lease effective on February 1, 2022, in exchange for a one-time lump sum early termination fee.

Right of use and related lease debt will be adjusted in the 2022 financial period.

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

office is located in Basking Ridge, New Jersey.

In March 2022, we entered into a lease agreement, commencing on April 1, 2022 and effective for 38 months, for an office of 5,799 square feet in Basking Ridge, New Jersey.

The Basking Ridge office represent a $0.4 million cash requirement as of December 31, 2022 which expires June 1, 2025.

In light of the current stage of regulatory interactions regarding Viaskin Peanut, we are achieving the resizing of our facility use 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 entered into a sublease agreement of this office space in June 2021.

The NYC office represents a $0.4 million cash requirement as of December 31, 2021 until the first quarter of 2023.

In January 2022, we entered into a termination agreement for our 21,548 square feet commercial facility in Summit, New Jersey.

A one-time lump sum early termination fee of $1.5 million was paid in 2022 and offset by the recognition of an income of $1.2 million due to the early termination of this lease.

In June 2021, we entered into a sublease agreement of our 3,780 square feet office space in Tower 49, New York, New York that both expire in the first quarter of 2023, simultaneously with the lease term.

Purchase obligations—Obligations Under the Terms of CRO Agreements

In 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

$94.9 million.

As of December 31, 2021, the amount we are still obligated to pay in connection with these contracts through 2024 is $30.3 million.

As of December 31, 2022, expenses associated with the ongoing trials amounted globally to $126.1 million, and we had non-cancellable contractual obligations with CRO until year ended 2025 amounting to $48.7 million.

The table below summarizes our sources and uses of cash for the years ended December 31, 2022 and 2021.

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Our net cash flows used in operating activities were $55.7 million and $108.2 million in 2022 and 2021 respectively.

Our net cash flows used in operating activities decreased by $57.4 million, or 35%, mainly due to cost containment measures and the decrease in personnel expenses related to the workforce reduction as part of our 2020 global restructuring plan.

Cash flows used in operating activities for the year ended December 31, 2021 includes restructuring costs paid for $7.0 million.

Our net cash flows used in operating activities decreased by $52.6 million, or 49%, mainly due to the reclassification in 2021 (from non-current assets to current assets) of the 2019 to 2021 research tax credit that was fully reimbursed in 2022, and also due to cost containment measures and the decrease in personnel expenses related to the workforce reduction as part of our 2020 global restructuring plan.

Investing Activities

Our net cash flows used in investing activities were $0.1 million and $0.4 million in 2022 and 2021 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.

Those investments in 2021 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 $0.3 million in 2021 from $149.5 million in 2020.

For the year ended December 31, 2020, financing activities are primarily composed of the net proceeds of our February underwritten global offering.

Consistent with customary practice in the French securities market, we entered into a liquidity agreement ( contrat de liquidité

) with Natixis on April 13, 2012.

Our net cash flows resulting from financing activities increased to $194.1 million in 2022 from $0.3 million in 2021.

For the year ended December 31, 2022, financing activities are primarily composed of the net proceeds of our global offering in the second quarter of 2022.

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.

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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.

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

Revenue Recognition —Collaboration agreement with Nestlé Health Science

We entered into an amendment with Nestlé Health Science on July 12, 2018.

In 2021 as in 2020, the ongoing COVID-19 pandemic impacted our current clinical trials, including 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 had to modify its protocols.

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

Based on our best estimate of the costs yet to be incurred, the measurement of progress of the PII conducted as part of the agreement has been revised and the revenue recognized recorded accordingly.

As of December 31, 2022, we recorded our collaboration agreement’s revenue based on our updated measurement of progress of the Phase 2 clinical trial conducted as part of the agreement.

The revision of the estimated costs for the year ended December 31, 2022 was $19.8 million compared to December 31, 2021, $9.8 million.

Our estimation of costs yet to be incurred and revenues yet to be recognized for the completion of the PII contains uncertainties because they require management to make assumptions and to apply judgment to estimate future cost and timeline for new patient enrollment in this PII.

These estimates are subjective and our ability to achieve current best estimates is affected by factors such as ongoing COVID-19 pandemic.

Our estimation of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase 2 trial contains uncertainties because they require management to make assumptions and to apply judgment to estimate future cost and timeline for new patient enrollment in this PII.

These estimates are subjective and our ability to achieve current best estimates is affected by factors such as ongoing COVID-19 pandemic and conflict in Ukraine.

Share-Based Compensation

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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.

During the year ended December 31, 2021, pursuant to the authorization granted by the General Meeting of the Shareholders held on May 19, 2021, the Company offered the directors the opportunity to subscribe for warrants to purchase ordinary shares on May 19, 2021, and on June 3, 2021, the directors subscribed for warrants to purchase an aggregate of 39,185 ordinary shares.

These warrants have a contractual life of 4 years from their date of issuance and are not subject to a performance condition.

Unless otherwise decided by our board of directors, these warrants may be exercised at any time prior to their expiration, provided that the beneficiary still holds a seat on our board of directors at the time of exercise, and subject to applicable French laws and regulations applicable to companies whose securities are listed on a regulated stock market.

The fair value of the warrants has been estimated using the Cox-Ross Rubinstein binomial option pricing model.

Warrant fair value assumptions during the year ended December 31, 2021

Weighted average share price at grant date (in €)

Weighted average expected volatility

Weighted average risk-free interest rate

Weighted average expected term (in years)

Dividend yield

Weighted average fair value of warrants (in €)

Pre-funded warrants

The Company has assessed the pre-funded warrants for appropriate equity or liability classification.

During this assessment, the Company determined the pre-funded warrants are freestanding instruments that do not meet the definition of a liability pursuant to ASC 480 and do not meet the definition of a derivative pursuant to ASC 815.

The 2022 Warrants are classified as a component of permanent equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, and permit the holders to receive a fixed number of shares of common stock upon exercise.

In addition, the 2022 Warrants do not provide any guarantee of value or return.

Accordingly, the pre-funded warrants are classified as equity and accounted for as a component of additional paid-in capital at the time of issuance.

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 quarter.

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.

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 quarter.

Off-Balance Sheet Arrangements

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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 7. Management’s Discussion and Analysis