What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-07 compared with 2023-03-02 · 109 added, 107 removed, 251 unchanged (46% of the section changed)

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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.

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.

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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 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).

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, 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.

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.

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

We have two ongoing Phase 3 trial of Viaskin Peanut in children ages one to three and 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 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.

Based on its current operations, the Company expects that its balance of cash and cash equivalents of $141.4 million as of December 31, 2023 will be sufficient to fund its operations until December 31, 2024.

The company has incurred operating losses and negative cash flows from operations since inception.

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 Company will require substantial additional capital to fund its research and development and ongoing operating expenses.

These capital requirements are expected to be funded through debt and equity offerings before December 31, 2024.

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 and conflict in Ukraine.

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.

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 resulting from geopolitical instability, macroeconomic conditions, global health crises, or other factors.

If we are not successful in our financing objectives, we could have to scale back our 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.

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 scope of our trials for Viaskin Peanut;

continue our research, pre-clinical and clinical development of our product candidates, in particular expanding the scope of our trials for Viaskin Peanut;

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;

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;

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;

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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.

Impact of COVID-19 on our Business

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 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.

For further discussion of the business risks associated with COVID-19, see Item 1A, Risk Factors, within this Form 10-K report.

Business 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.

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.

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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.

Excludes employee share-based compensation expense after $19,9 millions loss on completion accrual reversal as of December 2023.

If we exclude Mag1c impact the percentage of research and development expenses related to Viaskin Peanut in 2023 would be 84%

If we exclude Mag1c impact the percentage of research and development expenses related to Viaskin Milk in 2023 would be 8%

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.

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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 extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under any collaboration agreements or future collaborations, if any;

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

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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

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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.

During the fiscal year ending December 31, 2023, the Company received the reimbursement of the 2022 fiscal year research tax credits for a total amount of $5.9 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 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.

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.

In May 2016, we entered into a Development Collaboration and License Agreement (the “Collaboration Agreement”) with Société des Produits Nestlé S.A.

(formerly NESTEC S.A.) (“NESTEC”).

The Collaboration Agreement related to an exclusive global collaboration with Nestlé Health Science for the development and, if approved, commercialization of MAG1C, a ready-to-use and standardized atopy patch test tool for the diagnosis of CMPA (non-mediated IgE) in infants.

Under the terms of the Collaboration Agreement, the Company was responsible for leading the development activities of MAG1C up through a pivotal Phase 3 clinical program, and if the appropriate regulatory approvals were received, Nestlé Health Science would support the commercialization of MAG1C globally.

The Company was eligible to receive up to €100.0 millions ($105.0 millions at December 31, 2023 closing exchange rate) in potential development, clinical, regulatory and commercial milestones, including an upfront payment of €10.0 millions received in July 2016.

On October 30, 2023, the Company and NESTEC entered into a Mutual Termination Letter Agreement terminating the Collaboration Agreement.

Each party remains responsible for its own costs and expenses related to its respective wind-down activities.

Any and all licenses and sublicenses, granted by either party to the other party under the Collaboration Agreement, including, without limitation, any licenses to intellectual property, were revoked and terminated.

Consequently, since signing the Mutual Termination Letter Agreement and as of December 31 , 2023, we recorded the following :

Loss on completion accrual reversal $19,9 millions (Other Operating Income);

Deferred revenue accrual reversal $6.9 millions (Operating Expenses);

Accrual for ongoing Clinical study completion $2.3 millions (Operating Expenses).

This accrual represents our best estimate of the remainder expenses related to the ongoing clinical study which will be incurred after December 31, 2023 and until the end of the study.

Operating Expenses

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

Since our inception, our operating expenses have consisted primarily of Research and Development activities, General and Administration costs and to lesser extent sales and marketing costs.

Research and Development Expenses

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.

Research and Development expenses comprise clinical trials direct costs as well as salaries, share-based payments and benefits for internal Research and Development personnel.

Consultants, costs of clinical trials

costs related to manufacturing clinical study materials, sponsored research, clinical trials insurance, other external costs, depreciation (of Research and Development equipments and other depreciation related to Research and Development like loss on completion on MAG1C study), 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.

Certain Research and Development projects are, or have been, partially funded by collaboration agreements, 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

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.

We anticipate that our sales and marketing expenses will increase significantly 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.

General and Administrative expenses consist primarily of personnel costs including share-based compensation for Finance, Legal, IT, Human Resources and other Administrative employees.

General and Administrative expense also consists of Information Systems architecture, software licenses, IT equipment and, 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 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.

Finance Income (Expense)

Our 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.

Our cash and cash equivalents have been deposited primarily in savings and deposit accounts with a short term remaining maturity at the date of purchase or less, refundable within one month, for which the risk of changes in value is considered to be insignificant.

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

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Comparison of the Years Ended December 31, 2023 and 2022

The following table summarizes our results of operations, derived from our consolidated financial statements, prepared in compliance with generally accepted accounting principles in the United States, or U.S.

The following table summarizes the results of our operations, derived from our consolidated financial statements, prepared in compliance with generally accepted accounting principles in the United States, or U.S.

GAAP, for the years ended December 31, 2023 and 2022:

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Total operating income

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%.

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.

We generated operating income of $15.7 millions for the year ended December 31, 2023 compared to $4.8 millions for the year ended December 31, 2022.

The increase in operating income is due to the increase in research tax credit and the revenue recognition of $6.9 millions related to the deferred revenue following the termination of the Collaboration Agreement with Nestlé.

Research tax credit increased by $3.0 millions for the year ended December 31, 2023 compared to the year ended December 31, 2022 as a result of the extension of the eligible expense base to include clinical supplies.

A corrective Research tax credit was filed by the Company for $2.9 millions for 2020, 2021 and 2022 fiscal year research tax credit during the year ended December 31, 2023.

Other operating income increased by $7.8 millions for the year ended December 31, 2023 compared to the year ended December 31, 2022 mainly due the reversal of deferred revenue following the Mutual Termination Letter Agreement, effective October 30, 2023, of the Collaboration Agreement between the Company and Nestlé Health Science.

Operating Expenses

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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 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.

Research and Development expenses decreased by $15.3 millions for the year ended December 31, 2023 compared to the year ended December 31, 2022 mainly as a result of :

loss on completion accrual net reversal $17,6 millions (compared to a $10.4 millions depreciation as of December 31, 2022) resulting from Nestlé Collaboration Agreement termination, that offset;

the global increase of $11.3 million in research and development expenses.

External clinical-related expenses increased by $6.8 millions for the year ended December 31, 2023 compared to the year ended December 31, 2022, reflecting intensified Research and Development activities (1) after the initiation of the VITESSE trial with the first patient screened in March 2023, and (2) as part of the new safety study for toddlers and children after the FDA confirmed additional safety data is required for BLA.

Employee-related costs, excluding share-based payment expenses, increased by $3.6 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 due to the workforce increase to support research and development activities on VITESSE trial and the new safety study for toddlers and children.

Sales and Marketing Expenses

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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 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.

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

Sales and Marketing expenses increased by $0.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to an increase in fees related to pre-commercialization activities for Viaskin Peanut in North America.

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 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.

and European employees, decreased by $0.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, due to employee departure in the US.

External professional services and other costs increased by $1.0 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, mainly due to an increase in fees related to 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 $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.

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.

General and administrative expenses increased by $5.2 millions for the year ended December 31, 2023, compared to the year ended December 31, 2022.

The source of this increase is threefold (1) an increase by $2.8 millions of external professional services fees incurred in our financing activities, (2) an increase by $0.9 million in employee-related costs to support General and Administrative activities, and (3) an increase by $0.8 million in depreciation, amortization and other costs mainly due to Montrouge office revamping which will be departed for a new location in Q2 of 2024.

The workforce dedicated to general and administrative activities increased from 27 employees in 2022 to 34 employees in 2023.

Financial income (loss)

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 financial income was $3.7 millions in 2023 and $0.4 million in 2022, and primarily includes the financial income on our financial assets and foreign exchange gains.

Our income tax expense was $7,000 for the year ended December 31, 2023, compared to a US Tax income of $70,000 for the year ended December 31, 2022.

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Financial Condition

On December 31, 2022, we had $209.2 million in cash and cash equivalents compared to $77.3 million of cash and cash equivalents on December 31, 2021.

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

Net cash used for operating activities was $55.7 and $108.2 million for the years ended December 31, 2022 and 2021, respectively.

On December 31, 2023, we held $141.4 millions in cash and cash equivalents compared to $209.2 millions of cash and cash equivalents on December 31, 2022..

Net cash used for operating activities was $79.6 and

$55.7 million for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, we recorded a net loss of $72.7 million.

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.

Our net cash flows provided by financing activities totaled $7.1 million in 2023, mainly consisting of the proceeds from our ATM program.

Sources of Liquidity and Material Cash Requirements

Based on its current operations, plans and assumptions as revised pursuant to 2023 announcements related to EPITOPE Phase 3 study topline results and VITESSE Phase 3 partial clinical hold lift, the Company expects that its balance of cash and cash equivalents of $141.4 million as of December 31, 2023 will be sufficient to fund its operations until December 31, 2024.

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

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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.

Pursuant to the ATM program, the Company issued and completed sales of new Ordinary Shares in the form of ADSs for a total gross amount of $15.3 million on May 4, 2022, and of $7.8 million on June 14, 2023.

Respectively, 6,036,238 and 2,052,450 new Ordinary Shares in the form of ADSs were issued through a capital increase without preferential subscription rights of the shareholders reserved to specific categories of persons fulfilling certain characteristics (the “ATM issuance”), at a unit subscription price of $1.27 and $1.90 per ADS, each ADS giving the right to receive one-half of one ordinary share of the Company.

During the years ended December 31, 2023 and 2022, we obtained the following financing on the public markets by issuance of securities, net of commissions and estimated offering expenses:

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

future pandemics, epidemics or global health crises and conflict in Ukraine or other global political or military crises.

The COVID-19 pandemic and the conflict in Ukraine 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 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:

Material Cash Requirements Due by the Year Ended

The following table presents our material expenses commitments for future periods:

Material expenses Commitments Due by the

Year Ended December 31,

(Amounts in thousands)

Operating leases

Purchase obligations—Obligations Under the Terms of CRO Agreements

Purchase obligations—Obligations Under the Terms of CRO commitments

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.

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

Conditional advances

In 2014, BpiFrance Financement granted an interest-free Innovation loan to DBV Technologies to help financing the pharmaceutical development of Viaskin™ Milk.

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 period.

Repayment ended during the third quarter of 2022.

Operating leases

Our corporate headquarters are located in Montrouge, France.

Our principal offices occupy a 4,470 square meter facility, pursuant to a lease agreement dated March 3, 2015 and represents a $3.4 million cash requirement as of December 31, 2022 which expires March 8, 2024.

Our principal offices occupy a 4,470 square meter facility, pursuant to a lease agreement dated March 3, 2015 and represents a $1.1 million cash requirement as of December 31, 2023 until July, 2024.

In November, 2023, the Company entered into new agreements to relocate its headquarters in Chatillon, France:

a short term lease agreement for the fitting works of the new offices,

a lease agreement starting April 16, 2024 with a minimum duration of six years.

Our primary U.S.

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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:

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

In light of the current stage of regulatory interactions regarding Viaskin Peanut, we achieved the resizing of our facility use in North America that was initially intended to support our U.S.

subsidiary as well as future commercialization needs, explaining partially operating leases costs as of December 31, 2023 and December 31, 2022 :

In January 2022, we concluded 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.

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Operating Activities

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 $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.

Our net cash flows used in operating activities were $79.7 millions and $55.7 millions in 2023 and 2022 respectively.

Our net cash flows used in operating activities increased by $24.0 millions, or 43%, mainly due to the collection in 2022 of the research tax credit receivable relating to fiscal years 2019 to 2021 for €24.8 millions (corresponding to $28.1 millions on the basis of 2021 closing exchange rate).

Investing Activities

Our net cash flows used in investing activities were $0.8 million and $0.1 million in 2023 and 2022 respectively.

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 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.

Our net cash flows resulting from financing activities decreased to $6.8 millions in 2023 from $194.1 millions in 2022.

For the year ended December 31, 2023, financing activities are primarily composed of the ATM in June 2023 compared to $194.4 millions during for the year ended December 31, 2022 (that consisted of our May 2022 ATM and June 2022 PIPE offering in 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.

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Some of the accounting methods and policies used in preparing our financial statements under U.S.

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.

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.

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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 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.

Effective October 30, 2023 ,the Company and Nestlé Health Science signed an agreement, terminating the collaboration agreement between the two parties and the PII clinical study by which upfront and milestones 1 to 3 are definitively acquired by DBV.

Consequently, as of the signing of the Mutual Termination Letter Agreement and as of December 31 2023, we recorded the following :

Loss on completion accrual reversal $19,9 millions;

Deferred revenue accrual reversal $6.9 millions;

Accrual for ongoing Clinical study completion $2.3 millions.

This accrual represents our best estimate of the remainder expenses related to the ongoing clinical study which will be incurred after December 31, 2023 and until the end of the study.

Clinical studies costs committed beyond December 31 2023 are to be settled by DBV.

Our estimation of costs yet to be incurred for the completion of the study contains uncertainties as they require management to make assumptions and to apply judgment to estimate future cost and timelines to finish the study.

These estimates are subjective and our ability to achieve current best estimates may be affected by factors.

A $2.3 millions provision representing our current best estimates of costs yet to be incurred for the completion of the study was booked as of December 31, 2023.

Share-Based Compensation

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

We have several 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.

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We estimated the following assumptions for the calculation of the fair value of our stock options:

per year ended

Assumptions per

Stock options per grant date

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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.

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.

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