Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,September 30, 2022
or
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
                    
to
                    
Commission file number
001-36697
 
 
DBV TECHNOLOGIES S.A.
(Exact name of registrant as specified in its charter)
 
 
France
 
Not applicable
State or other jurisdiction of
incorporation or organization
 
(I.R.S. Employer
Identification No.)
177-181
avenue Pierre Brossolette
Montrouge France
 
92120
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code +33 1 55 42 78 78

Securities registered pursuant to Section
 12(b) of the Act:
 
Title of each class
 
Trading Symbol(s)
Symbol(s)
 
Name of each exchange
on which registered
American Depositary Shares,
each representing
one-half
of
one ordinary share, nominal
value €0.10
€0.10 per share
 
DBVT
 
The Nasdaq Stock Market LLC
Ordinary shares, nominal
value €0.10 per share*share
*
 
n/a
 
The Nasdaq Stock Market LLC
 
*
Not for trading, but only in connection with the registration of the American Depositary Shares.
Securities registered pursuant to section 12(g) of the Act: None.
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    
Yes
☒    YesNo  ☐  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§ (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    
Yes
☒    YesNo  ☐  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer ☐  Accelerated filer ☐
Non-accelerated
filer		  ☒ Smaller reporting company ☒
    
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes   ☐    Yes    ☒  No
☒
As of April 29,November 3, 2022, the registrant
had
 55,096,537 94,025,441
ordinary
shares, nominal value €0.10 per share, outstanding including treasury shares
.
shares.
 
 
 
Table of Contents
Table of contents
 
Part I  Page
Part I
Financial information
  3
Item 1  
Item 1
Condensed Consolidated Statements of Financial Position (Unaudited) as of March 31,September 30, 2022 and December 31, 2021
  13
  
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the Three and Nine Months Ended March 31,September 30, 2022 and 2021
  24
  
Condensed Consolidated Statements of Cash Flows (Unaudited) for the ThreeNine Months Ended March 31,September 30, 2022 and 2021
  35
  
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) for the ThreeNine Months Ended March 31,September 30, 2022 and 2021
  46
  
Notes to the Condensed Consolidated Financial Statements (Unaudited)
5
Item 2
  
8
Item 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
  1521
Item 3
  
Quantitative and Qualitative Disclosures About Market Risk
  2033
Item 4
  
Controls and Procedures
  2133
Part II
  
Other Information
  2234
Item 1
  
Legal Proceedings
  2234
Item 1A
  
Risk Factors
  2234
Item 2
  
Unregistered Sales of Equity Securities and Use of Proceeds
  2234
Item 3
  
Defaults Upon Senior Securities
  2235
Item 4
  
Mine Safety Disclosures
  2235
Item 5
  
Other Information
  35
22Item 6  
Item 6
Exhibits
  
Exhibits
2336
Unless the context otherwise requires, we use the terms “DBV,”“DBV”, “DBV Technologies,” the “Company,” “we,” “us” and “our” in this Quarterly Report on Form 10-Q, or Quarterly Report, to refer to DBV Technologies S.A. and, where appropriate, its consolidated subsidiaries. “Viaskin
™
“Viaskin™”, “EPIT
™
“EPIT™” and our other registered and common law trade names, trademarks and service marks are the property of DBV Technologies S.A. or our subsidiaries. All other trademarks, trade names and service marks appearing in this prospectusQuarterly Report are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Quarterly Report on Form 10-Q may be referred to without the 
®
 and
™
symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.
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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS.
This Quarterly Report on Form
10-Q,
or Quarterly Report contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or variations of these words or similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Any forward-looking statement involves known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statement. Forward-looking statements include statements, other than statements of historical fact, about, among other things:
the impact of the ongoing
COVID-19
pandemic, including the emergence of new variant strains of COVID-19, and its effects on our operations, research and development, clinical trials and ability to obtain financing and potential disruption in the operations and business of third-party manufacturers, contract research organizations, or CROs, other service providers and collaborators with whom we conduct business;
our ability to continue as a going concern;
our expectations regarding the timing or likelihood of regulatory filings and approvals, including with respect to our anticipated
re-submission
of a Biologics License Application, or a BLA, for Viaskin
TM
Peanut to the U.S. Food and Drug Administration, or the FDA;
the initiation, timing, progress and results of our
pre-clinical
studies and clinical trials, and our research and development programs;
 
the sufficiency of existing capital resources;
our business model and our other strategic plans for our business, product candidates and technology;
 
our ability to manufacture clinical and commercial supplies of our product candidates and comply with regulatory requirements related to the manufacturing of our product candidates;
 
our ability to build our own sales and marketing capabilities, or seek collaborative partners, to commercialize Viaskin Peanut and/or our other product candidates, if approved;
 
the commercialization of our product candidates, if approved;
 
our expectations regarding the potential market size and the size of the patient populations for Viaskin Peanut and/or our other product candidates, if approved, and our ability to serve such markets;
 
the pricing and reimbursement of our product candidates, if approved;
 
the rate and degree of market acceptance of Viaskin Peanut and/or our other product candidates, if approved, by physicians, patients, third-party payors and others in the medical community;
 
our ability to advance product candidates into, and successfully complete, clinical trials;
 
the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;
 
estimates of our expenses, future revenues, capital requirements and our needs for additional financing;
 
the potential benefits of strategic collaboration agreements and our ability to enter into strategic arrangements;
 
our ability to maintain and establish collaborations or obtain additional grant funding;
 
1
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our financial performance; and
 
other risks and uncertainties, including those listed under the caption “Risk Factors.”
Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, these statements are based on our estimates or projections of the future that are subject to known and unknown risks and uncertainties and other important factors that may cause our actual results, level of activity, performance, experience or achievements to differ materially from those expressed or implied by any forward-looking statement. These risks, uncertainties and other factors are described in greater detail under the caption “Risk Factors” in Part I. Item 1A of our Annual Report on Form
10-K
for the year ended December 31, 2021, filed with the Securities and Exchange Commission, or the SEC on March 9, 2022. Additional information is also included on our Current Report on Form 8-K, filed with the SEC on June 13, 2022. As a result of the risks and uncertainties, the results or events indicated by the forward-looking statements may not occur. Undue reliance should not be placed on any
forward-looking
statement. We qualify all of our forward-looking statements by these cautionary statements.
In addition, any forward-looking statement in this Quarterly Report, including statements that “we believe” and similar statements, reflect our beliefs and opinions on the relevant subject and represents our views only as of the date of this Quarterly Report and should not be relied upon as representing our views as of any subsequent date. These statements are based upon information available to us as of the date of this Quarterly Report and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements. We anticipate that subsequent events and developments may cause our views to change. Although we may elect to update these forward-looking statements publicly at some point in the future, we specifically disclaim any obligation to do so, except as required by applicable law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
2
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Part I –- Financial Information
Item 1. Financial Statements
DBV Technologies S.A.
Condensed Consolidated Statements of Financial Position (unaudited)
(amounts in thousands, except share and per share data)

      
March 31,
  
December 31,
 
   
Note
  
2022
  
2021
 
Assets
            
Current assets:
            
Cash and cash equivalents
  
3
  $74,107  $77,301 
Other current assets
  
4
   16,329   37,085 
      
 
 
  
 
 
 
Total current assets
     
 
90,437
 
 
 
114,386
 
Property, plant, and equipment, net
      17,196   18,146 
Right
 
of
 
use
assets related to operating leases
  
5
   3,356   7,336 
Intangible assets
      18   22 
Other
non-current
assets
      6,575   6,833 
      
 
 
  
 
 
 
Total
non-current
assets
     
 
27,144
 
 
 
32,338
 
      
 
 
  
 
 
 
Total Assets
     
$
117,581
 
 
$
146,723
 
      
 
 
  
 
 
 
Liabilities and shareholders’ equity
            
Current liabilities:
            
Trade payables
  
6
  $11,416  $11,429 
Short-term operating leases
  
5
   2,034   3,003 
Short-term financial debt
      333   510 
Current contingencies
  
8
   3,529   4,095 
Other current liabilities
  
6
   8,719   12,361 
      
 
 
  
 
 
 
Total current liabilities
     
 
26,031
 
 
 
31,397
 
      
 
 
  
 
 
 
Long-term operating leases
  
5
   2,268   7,147 
Non-current
contingencies
  
8
   5,758   6,758 
Other
non-current
liabilities
      1,461   2,147 
      
 
 
  
 
 
 
Total current liabilities
     
 
9,488
 
 
 
16,052
 
      
 
 
  
 
 
 
Total Liabilities
     
$
35,519
 
 
$
47,449
 
      
 
 
  
 
 
 
Shareholders’ equity:
            
Ordinary shares, €0.10 par value; 55,096,537 and 55,095,762
shares authorized, and issued as at March 31, 2022 and December 31, 2021, respectively
     $6,539  $6,538 
Additional
paid-in
capital
      359,478   358,115 
Treasury stock, 144,501 and 153,631
ordinary shares as of March 31, 2022 and December 31, 2021, respectively, at cost
      (1,193)   (1,232) 
Accumulated deficit
      (275,219)   (258,528) 
Accumulated other comprehensive income
      543   519 
Accumulated currency translation effect
      (8,086)   (6,137) 
      
 
 
  
 
 
 
Total Shareholders’ equity
     
$
82,062
 
 
$
99,274
 
      
 
 
  
 
 
 
Total Liabilities and
s
hareholder’s equity
     
$
117,581
 
 
$
146,723
 
      
 
 
  
 
 
 
       
September 30,
  
December 31,
 
   
Note
   
2022
  
2021
 
Assets
              
Current assets:
              
Cash and cash equivalents
  
 
3
 
  $212,670  $77,301 
Other current assets
  
 
4
 
   13,025   37,085 
        
 
 
  
 
 
 
Total current assets
       
 
225,695
 
 
 
114,386
 
Property, plant, and equipment, net
        14,429   18,146 
Right-of-use
assets related to operating leases
  
 
5
 
   2,614   7,336 
Intangible assets
        11   22 
Other non-current assets
        5,368   6,833 
        
 
 
  
 
 
 
Total non-current assets
       
 
22,422
 
 
 
32,338
 
        
 
 
  
 
 
 
Total Assets
       
$
248,117
 
 
$
146,723
 
        
 
 
  
 
 
 
Liabilities and shareholders' equity
              
Current liabilities:
              
Trade payables
  
 
6
 
  $15,369  $11,429 
Short-term operating leases
  
 
5
 
   1,381   3,003 
Short-term financial debt
        —     510 
Current contingencies
  
 
9
 
   3,026   4,095 
Other current liabilities
  
 
6
 
   8,615   12,361 
        
 
 
  
 
 
 
Total current liabilities
       
 
28,391
 
 
 
31,397
 
        
 
 
  
 
 
 
Long-term operating leases
  
 
5
 
   1,423   7,147 
Non-current contingencies
  
 
9
 
   5,272   6,758 
Other non-current liabilities
  
 
6
 
   979   2,147 
        
 
 
  
 
 
 
Total non-current liabilities
       
 
7,674
 
 
 
16,052
 
        
 
 
  
 
 
 
Total Liabilities
       
$
36,065
 
 
$
47,449
 
        
 
 
  
 
 
 
Shareholders’ equity:
              
Ordinary shares, €0.10 par value; 94,025,441 and 55,095,762 shares authorized, and issued as at September 30, 2022 and December 31, 2021, respectively
       $10,709  $6,538 
Additional paid-in capital
        456,884   358,115 
Treasury stock, 137,101 and 153,631 ordinary shares as of September 30, 2022 and December 31, 2021, respectively, at cost
        (1,083)   (1,232) 
Accumulated deficit
        (220,337)   (258,528) 
Accumulated other comprehensive income
        783   519 
Accumulated currency translation effect
        (34,904)   (6,137) 
        
 
 
  
 
 
 
Total Shareholders’ equity
  
 
7
 
  
$
212,052
 
 
$
99,274
 
        
 
 
  
 
 
 
Total Liabilities and Shareholders’ equity
       
$
248,117
 
 
$
146,723
 
        
 
 
  
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
13
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DBV Technologies S.A.
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)
(amounts in thousands, except share and per share data)

 
       
Three months Ended

March 31,
 
   
Note
   
2022
  
2021
 
Operating income
  
 
9
 
  
$
2,546
 
 
$
2,941
 
    
Operating expenses
              
Research and development expenses
        (12,223)   (22,164) 
Sales and marketing expenses
        (464)   (729) 
General and administrative expenses
        (6,630)   (9,683) 
        
 
 
  
 
 
 
Total Operating expenses
       
 
(19,317
) 
 
 
(32,575
) 
        
 
 
  
 
 
 
Loss from operations
       
 
(16,771
) 
 
 
(29,634
) 
        
 
 
  
 
 
 
Financial income
        152   215 
        
 
 
  
 
 
 
Loss before taxes
       
 
(16,619
) 
 
 
(29,419
) 
        
 
 
  
 
 
 
Income tax
        (87)   (30) 
        
 
 
  
 
 
 
Net loss
       
$
(16,706)
 
 
$
(29,449)
 
        
 
 
  
 
 
 
Foreign currency translation differences, net of taxes
        (1,933)   (8,744) 
Actuarial gains (loss) on employee benefits, net of taxes
        24   (85) 
        
 
 
  
 
 
 
Total comprehensive loss
       
$
(18,615
) 
 
$
(38,279
) 
        
 
 
  
 
 
 
Basic/diluted net loss per share attributable to shareholders  
 
13
 
  
$
(0.30
) 
 
$
(0.54
) 
    
Weighted average number of shares outstanding used in computing per share amounts:
        54,932,192   54,880,776 
      
Three Months Ended
September 30,
  
Nine Months Ended

September 30,
 
   
Note
  
2022
  
2021
  
2022
  
2021
 
Operating income
  
10
  
$
2,074
 
 
$
1,323
 
 
$
6,148
 
 
$
2,776
 
      
Operating expenses
                    
Research and development expenses
      (15,096)   (16,320)   (45,930)   (58,663) 
Sales and marketing expenses
      (159)   (1,072)   (1,659)   (2,999) 
General and administrative expenses
      (4,839)   (8,299)   (17,173)   (26,250) 
      
 
 
  
 
 
  
 
 
  
 
 
 
Total Operating expenses
      (20,094)   (25,691)   (64,762)   (87,912) 
      
 
 
  
 
 
  
 
 
  
 
 
 
Loss from operations
     
 
(18,020
) 
 
 
(24,368
) 
 
 
(58,614
) 
 
 
(85,137
) 
      
 
 
  
 
 
  
 
 
  
 
 
 
Financial income
      732   336   1,668   597 
      
 
 
  
 
 
  
 
 
  
 
 
 
Loss before taxes
     
 
(17,287
) 
 
 
(24,033
) 
 
 
(56,946
) 
 
 
(84,540
) 
      
 
 
  
 
 
  
 
 
  
 
 
 
Income tax (expense)
      —     —     (87)   404 
      
 
 
  
 
 
  
 
 
  
 
 
 
Net loss
     
$
(17,287
) 
 
$
(24,033
) 
 
$
(57,033
) 
 
$
(84,136
) 
      
 
 
  
 
 
  
 
 
  
 
 
 
Foreign currency translation differences, net of taxes
      (15,425)   (3,728)   (28,752)   (9,684) 
Actuarial gains (losses) on employee benefits, net of taxes
      41   28   264   (10) 
      
 
 
  
 
 
  
 
 
  
 
 
 
Total comprehensive loss
     
$
(32,672
) 
 
$
(27,733
) 
 
$
(85,520
) 
 
$
(93,830
) 
      
 
 
  
 
 
  
 
 
  
 
 
 
Basic/diluted net loss per share attributable to shareholders
  
14
  
$
(0.18
) 
 
$
(0.44
) 
 
$
(0.79
) 
 
$
(1.53
) 
      
Weighted average shares outstanding used in computing per
sha
re amounts:
      93,905,050   54,947,354   71,779,572   54,911,278 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
24
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DBV Technologies S.A.
Condensed Consolidated Statements of Cash Flows (unaudited)
(amounts in thousands)

 
      
Three months Ended March 31,
 
   
Notes
  
2022
  
2021
 
Net loss for the period
            
Adjustments to reconcile net loss to net cash used in operating activities:
     
$
(16,706
) 
 
$
(29,449
) 
Depreciation, amortization and accrued contingencies
      (599)   1,483 
Retirement pension obligations
      (9)   0   
Expenses related to share-based payments
      1,363   1,433 
Other elements
      (3)   (456) 
Changes in operating assets and liabilities:
            
Decrease (increase) in trade receivables
      0     2,101 
Decrease (increase) in other current assets
      20,458   (417) 
(Decrease) increase in trade payables
      (19)   (2,567) 
(Decrease) increase in other current and
non-current
liabilities
      (4,118)   (7,980) 
Change in operating lease liabilities and right of use assets
      (1,849)   (353) 
      
 
 
  
 
 
 
Net cash flow used in operating activities
     
 
(1,483
) 
 
 
(36,204
) 
      
 
 
  
 
 
 
Cash flows provided by (used in) investing activities:
            
Acquisitions of property, plant, and equipment
      (131)   (184) 
Proceeds from property, plant and equipment dispositions
      3   0   
Acquisitions of
non-current
financial assets
      (40)   (1) 
Proceeds from
non-current
financial assets
      179   0   
      
 
 
  
 
 
 
Net cash flows provided by (used in) investing activities
     
 
11
 
 
 
(185
) 
      
 
 
  
 
 
 
Cash flows (used in) provided by financing activities:
            
(Decrease) in conditional advances
      (168)   (164) 
Treasury shares
      40   578 
Capital increases, net of transaction costs
      0     42 
Other cash flows related to financing activities
      0     (17) 
      
 
 
  
 
 
 
Net cash flows (used in) provided by financing activities
     
 
(129
) 
 
 
440
 
      
 
 
  
 
 
 
Effect of exchange rate changes on cash and cash equivalents
      (1,594)   (7,944) 
      
 
 
  
 
 
 
Net decrease in cash and cash equivalents
     
 
(3,194
) 
 
 
(43,893
) 
      
 
 
  
 
 
 
Net cash and cash equivalents at the beginning of the period
      77,301   196,352 
      
 
 
  
 
 
 
Net cash and cash equivalents at the end of the period
  
3
  
$
74,107
 
 
$
152,459
 
      
 
 
  
 
 
 
       
    Nine Months Ended September 30,    
 
   
Notes
   
2022
  
2021
 
Net loss for the period
       
$
(57,033
) 
 
$
(84,136
) 
Adjustments to reconcile net loss to net cash used in operating activities:
              
Depreciation, amortization and accrued contingencies
        1,140   9,705 
Retirement pension obligations
        58   127 
Expenses related to share-based payments
  
 
8
 
   3,416   4,078 
Other elements
        (3)   1,214 
Changes in operating assets and liabilities:
              
Decrease (increase) in trade receivables
        —     2,174 
Decrease (increase) in other current assets
        20,900   (9,036) 
(Decrease) increase in trade payables
        5,699   (7,135) 
(Decrease) increase in other current and
non-current
liabilities
        (3,405)   (5,497) 
Change in operating lease liabilities and right of use assets
        (2,554)   (946) 
Net cash flow used in operating activities
       
 
(31,781
) 
 
 
(89,452
) 
        
 
 
  
 
 
 
Cash flows used in investing activities:
              
Acquisitions of property, plant, and equipment
        (742)   —   
Proceeds from property, plant, and equipment dispositions
        3   46 
Acquisition of intangible assets
        —     (8) 
Acquisitions of non-current financial assets
        (149)   —   
Proceeds from
non-current
financial assets
        822   3 
        
 
 
  
 
 
 
Net cash flows used in investing activities
       
 
(66
) 
 
 
41
 
        
 
 
  
 
 
 
Cash flows provided by financing activities:
              
Decrease in conditional advances
        (479)   (518) 
Treasury shares
        149   (359) 
Capital increases, net of transaction costs
        194,732   794 
Other cash flows related to financing activities
        —     (21) 
        
 
 
  
 
 
 
Net cash flows provided by financing activities
       
 
194,403
 
 
 
(103
) 
        
 
 
  
 
 
 
Effect of exchange rate changes on cash and cash equivalents
        (27,186)   (8,643) 
        
 
 
  
 
 
 
Net increase (decrease) in cash and cash equivalents
       
 
135,369
 
 
 
(98,157
) 
        
 
 
  
 
 
 
Net Cash and cash equivalents at the beginning of the period
        77,301   196,352 
        
 
 
  
 
 
 
Net cash and cash equivalents at the end of the period
  
 
3
 
  
$
212,670
 
 
$
98,195
 
        
 
 
  
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
5
Table of Contents
DBV Technologies S.A.
Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)
(amounts in thousands, except share and per share
data)
 
   
Ordinary shares
                     
   
Number of

Shares
   
Amount
   
Additional

paid-in

capital
   
Treasury

stock
  
Accumulated

deficit
  
Accumulated

other

comprehensive

income (loss)
  
Accumulated

currency

translation

effect
  
Total

Shareholders’

Equity
 
Balance at January 1, 2021
  
 
54,929,187
 
  
$
6,518
 
  
$
1,152,042
 
  
$
(1,169
) 
 
$
(958,543
) 
 
$
484
 
 
$
6,158
 
 
$
205,491
 
Net (loss)
   —      —      —      —     (29,449)   —     —     (29,449) 
Other comprehensive loss
   —      —      —      —     —     (85)   (8,744)   (8,829) 
Issuance of ordinary shares
   7,500    1    42    —     —     —     —     42 
Treasury shares
   —      —      —      488   —     —     —     488 
Share-based payments
   —      —      1,433    —     —     —     —     1,433 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance at March 31, 2021
  
 
54,936,687
 
  
$
6,519
 
  
$
1,153,516
 
  
$
(681
) 
 
$
(987,992
) 
 
$
399
 
 
$
(2,586
) 
 
$
169,176
 
  
Ordinary shares
                   
Ordinary shares
                   
  
Number of

Shares
   
Amount
   
Additional

paid-in

capital
   
Treasury

stock
 
Accumulated

deficit
 
Accumulated

other

comprehensive

income (loss)
 
Accumulated

currency

translation

effect
 
Total

Shareholders’

Equity
   
Number of
Shares
   
Amount
   
Additional
paid-in
capital
 
Treasury
stock
 
Accumulated
deficit
 
Accumulated
other
comprehensive
income (loss)
 
Accumulated
currency
translation
effect
 
Total
Shareholders’
Equity
 
Balance at January 1, 2022
  
 
55,095,762
 
  
$
6,538
 
  
$
358,115
 
  
$
(1,232
) 
 
$
(258,528
) 
 
$
519
 
 
$
(6,137
) 
 
$
99,274
 
Balance at January 1, 2021
  
 
54,929,187
 
  
$
6,518
 
  
$
1,152,042
 
 
$
(1,169
) 
 
$
(958,543
) 
 
$
484
 
 
$
6,158
 
 
$
205,491
 
Net (loss)
   —      —      —      —     (16,706)   —     —     (16,706)    —      —      —     —     (29,449)   —     —     (29,449) 
Other comprehensive loss
   —      —      —      —     —     24   (1,933)   (1,909)    —      —      —     —     —     (85)   (8,744)   (8,829) 
Issuance of ordinary shares
   775    1    0      —     —     —     —     1    7,500    1    42   —     —     —     —     42 
Treasury shares
   —      —      —      40   —     —     —     40    —      —      —     488   —     —     —     488 
Share-based payments
   —      —      1,363    —     —     —     —     1,363    —      —      1,433   —     —     —     —     1,433 
Other changes
   —      —      —      —     15     (15)   —   
  
 
   
 
   
 
   
 
  
 
  
 
  
 
  
 
   
 
   
 
   
 
  
 
  
 
  
 
  
 
  
 
 
Balance at March 31, 2022
  
 
55,096,537
 
  
$
6,539
 
  
   $
359,478
 
  
$
(1,193
) 
 
$
(275,219
) 
 
$
543
  
 
$
(8,086
) 
 
$
82,062
 
Balance at March 31, 2021
  
 
54,936,687
 
  
$
6,519
 
  
$
1,153,516
 
 
$
(681
) 
 
$
(987,992
) 
 
$
399
 
 
$
(2,586
) 
 
$
169,176
 
Net (loss)
   —      —      —     —     (30,654)   —     —     (30,654) 
Other comprehensive income
   —      —      —     —     —     48   2,788   2,836 
Issuance of ordinary shares
   75,000    9    464   —     —     —     —     473 
Issuance of warrants
         279           279 
Treasury shares
   —      —        (185)   —     —     —     (185) 
Share-based payments
   —      —      1,094     —     —     —     1,094 
Allocation of accumulated net losses
   —      —      (797,823)   —     797,823   —     —     —   
  
 
   
 
   
 
  
 
  
 
  
 
  
 
  
 
 
Balance at June 30, 2021
  
 
55,011,687
 
  
$
6,529
 
  
$
357,530
 
 
$
(866
) 
 
$
(220,823
) 
 
$
446
 
 
$
203
 
 
$
143,019
 
  
 
   
 
   
 
  
 
  
 
  
 
  
 
  
 
 
Net (loss)
   —      —      —     —     (24,033)   —     —     (24,033) 
Other comprehensive income
   —      —      —     —     —     28   (3,728)  (3,701)
Treasury shares
   —      —        56   —     —     —     56 
Share-based payments
   —      —      1,551     —     —     —     1,551 
  
 
   
 
   
 
  
 
  
 
  
 
  
 
  
 
 
Balance at September 30, 2021
  
 
55,011,687
 
  
$
6,529
 
  
$
359,081
 
 
$
(810
) 
 
$
(244,856
) 
 
$
474
 
 
$
(3,526
) 
 
$
116,892
 
  
 
   
 
   
 
  
 
  
 
  
 
  
 
  
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
46
Table of Contents
DBV Technologies S.A.
Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited) (continued)
(amounts in thousands, except share and per share data)

   
Ordinary shares
                     
   
Number of
Shares
   
Amount
   
Additional
paid-in
capital
  
Treasury
stock
  
Accumulated
deficit
  
Accumulated
other
comprehensive
income (loss)
   
Accumulated
currency
translation
effect
  
Total
Shareholders’
Equity
 
Balance at January 1, 2022
  
 
55,095,762
 
  
$
6,538
 
  
$
358,115
 
 
$
(1,232
) 
 
$
(258,528
) 
 
$
519
 
  
$
(6,137
) 
 
$
99,274
 
Net (loss)
   —      —      —     —     (16,706)   —      —     (16,706) 
Other comprehensive loss
   —      —      —     —     —     24    (1,933)   (1,909) 
Issuance of ordinary shares
   775    1    —     —     —     —      —     1 
Treasury shares
   —      —      —     40   —     —      —     40 
Share-based payments
   —      —      1,363   —     —     —      —     1,363 
Other changes
   —      —      —     —     15        (15)   —   
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
   
 
 
  
 
 
 
Balance at March 31, 2022
  
 
55,096,537
 
  
$
6,539
 
  
$
359,478
 
 
$
(1,193
) 
 
$
(275,219
) 
 
$
543
 
  
$
(8,086
) 
 
$
82,062
 
Net (loss)
   —      —      —     —     (23,039)   —      —     (23,039) 
Other comprehensive loss
   —      —      —     —     —     200    (11,394)   (11,194) 
Issuance of ordinary shares
   38,926,142    4,170    103,007   —     —     —      —     107,176 
Issuance of warrants
   —      —      88,094   —     —     —      —     88,094 
Treasury shares
   —      —      —     240   —     —      —     240 
Share-based payments
   —      —      1,078   —     —     —      —     1,078 
Allocation of accumulated net losses
   —      —      (95,209)   —     95,209   —      —     —   
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
   
 
 
  
 
 
 
Balance at June 30, 2022
  
 
94,022,679
 
  
$
10,708
 
  
$
456,447
 
 
$
(953
) 
 
$
(203,050
) 
 
$
743
 
  
$
(19,480
) 
 
$
244,416
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
   
 
 
  
 
 
 
Net (loss)
   —      —      —     —     (17,287)   —      —     (17,287) 
Other comprehensive loss
   —      —      —     —     —     41    (15,425)   (15,384) 
Issuance of ordinary shares
   2 762    1    (540)   —     —     —      —     (539) 
Treasury shares
   —      —      —     (130)   —     —      —     (130) 
Share-based payments
   —      —      976   —     —     —      —     976 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
   
 
 
  
 
 
 
Balance at September 30, 2022
  
 
94 025 441
 
  
$
10,709
 
  
$
456,884
 
 
$
(1,083
) 
 
$
(220,337
) 
 
$
783
 
  
$
(34,904
) 
 
$
212,052
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
   
 
 
  
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
Table of Contents
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
Note 1: The Company
Incorporated in 2002 under the laws of France, DBV Technologies S.A. (“DBV Technologies,” or the “Company”, or the “group”) is a
clinical-stage
specialty biopharmaceutical company focused on changing the field of immunotherapy by developing a novel technology platform called Viaskin
™
Viaskin™. The Company’s therapeutic approach is based on epicutaneous immunotherapy, or EPIT
™
EPIT™, a proprietary method of delivering biologically active compounds to the immune system through intact skin using Viaskin
™
Viaskin™.
Basis of Presentation
The condensed consolidated financial statements of the Company and its
wholly-owned
subsidiaries are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and are presented in thousands of U.S. Dollars, except for share and per share data and as otherwise noted.dollars. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated on consolidation.
The unaudited condensed consolidated financial statements presented in this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form
10-K
filed with the SEC on March 9, 2022 (the “Annual Report”). The condensed consolidated statement of financial position atas of December 31, 2021 was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. The Company’s critical accounting policies are detailed in the Annual Report. The Company’s critical accounting policies have not changed materially since December 31, 2021.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. However, these condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period. These interim financial results are not necessarily indicative of results to be expected for the full fiscal year ending December 31, 2022, or any other future period.
Use of estimates
The preparation of the Company’s condensed consolidated financial statements requires the use of estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of income and expenses during the period. The Company bases its estimates and assumptions on historical experience and other factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. The actual results may differ from these estimates.
On an
on-going
basis, management evaluates its estimates, primarily those related to: (1) evaluation of costs and measure of progress of the development activities conducted as part of the collaboration agreement with Nestlé Health Science, (2) research tax credits, (3) assumptions used in the valuation of right of use assets - operating lease, (4) impairment of
right
of
use
right-of-use assets related to leases and property, plant and equipment, (5) recoverability of the Company’sCompany's net deferred tax assets and related valuation allowance, (6) assumptions used in the valuation model to determine the fair value and vesting conditions of share-based compensation plan, and (7) estimate of contingencies.
Going concern
These condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company’s ability to continue as a going concern exists.
Since its inception, the Company has primarily funded its operations with equity financings, and, to a lesser extent, public assistance aimed at supporting innovation and payments associated with research tax credits (
Crédit d’Impôt Recherche
). The Company does not generate product revenue and continues to prepare for the potential launch of its first product in the United States and in the European Union, if approved.
Following receipt of a Complete Response Letter (“CRL”) from the U.S. Food and Drug Administration (“FDA”) in connection with its Biologics License Application (“BLA”) for Viaskin
™
Peanut, beginning in August 2020, the Company scaled down its other clinical programs and
pre-clinical
spend to focus on Viaskin
™
Peanut. In response, the Company implemented a global restructuring plan to provide operational latitude to progress the clinical development and regulatory review of Viaskin
™
Peanut in the United States and European Union. This restructuring plan was completed in the second half of 2021.
In January 2021, the Company received written responses from the FDA to questions provided in the Type A meeting request the Company submitted in October 2020 following the CRL. In order to respond to the FDA’s requests and recommendations, the Company 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, the Company 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, the Company decided not to pursue the stepwise approach to the development plans for Viaskin Peanut as requested by the FDA in the October 2021 feedback and announced its plan to initiate a pivotal Phase 3 clinical study for a modified Viaskin Peanut patch (mVP) in children ages 4-11. The Company considers this trial as the most straightforward approach to demonstrate effectiveness, safety, and improved adhesion of the modified Viaskin Peanut system. After receiving agreement from the FDA for its change in strategy, 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 was submitted to the FDA in April 2022.
The
C
ompany has been granted a Type C meeting by the FDA
, which is expected to be held
in the second quarter of 2022
,
to align on the new Phase
3
study protocol.
The Company has incurred operating losses and negative cash flows from operations since inception. As of the date of the filing, the Company’s available cash and cash equivalents are not projected to be sufficient to support its operating plan for at least the next 12 months. As such, there is substantial doubt regarding the Company’s ability to continue as a going concern.
5
Based on its current operations, as well as its plans and assumptions as revised pursuant to its change of strategy, announced in December 2021, the Company expects that its balance of cash and cash equivalents of $74.1 million as of March 31, 2022 will be sufficient to fund its operations into the first quarter of 2023.
The Company intends to seek additional capital as it prepares for the new pivotal study and launch of Viaskin Peanut, if approved, and continues other research and development efforts. The Company may seek to finance its future cash needs through a combination of public or private equity or debt financings, collaborations, license and development agreements and other forms of
non-dilutive
financings.
The Company cannot guarantee that it will be able to obtain the necessary financing to meet its needs or to obtain funds at attractive terms and conditions. The ongoing
COVID-19
pandemic has already caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to the Company, including reduced ability to raise additional capital when needed or on acceptable terms, if at all.
If the Company is not successful in its financing objectives, the Company 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 the Company to relinquish rights to its product candidates that the Company might otherwise seek to develop or commercialize independently.
These Consolidated Financial Statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern
Accounting Pronouncements adopted in 2022
The Company
has
not adoptadopted any new accounting pronouncements in 2022
to date.
Accounting Pronouncements issued not yet adopted
In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13 - Financial Instruments - Credit losses, which replaces the incurred loss impairment methodology for financial instruments in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The FASB has issued ASU
2019-10
which has resulted in the postponement of the effective date of the new guidance for eligible smaller reporting companies to the fiscal year beginning January 1, 2023. The guidance must be adopted using a modified-retrospective approach and a prospective transition approach is required for debt securities for which an
other-than-temporary
impairment had been recognized before the effective date. The Company is currently evaluating the impact of the guidance on its Consolidated Financial Statements. The Company does not expect this new standard will have a material impact on its consolidated financial statements.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s Consolidated Financial Statements upon adoption.
8
Table of Contents
Note 2: Significant Events and Transactions
Clinical programs
Viaskin
TM
Peanut for children ages 4-11 -in the United States Regulatory History and Current Status
In January 2021, the Company received written responses from the FDA to questions provided in the Type A meeting request the Company submitted in October 2020 following the CRL.Complete Response Letter received in August 2020. The FDA agreed with its position that a modified Viaskin Peanut patch should not be considered as a new product entity provided the occlusion chamber of the current Viaskin Peanut patch and the peanut protein dose of 250
µg
(approximately µg (approximately 1/1000 of one peanut) remains unchanged and performs in the same way it has performed previously. In order to confirm the consistency of efficacy data between the existing and a modified patch, FDA requested an assessment comparing the uptake of allergen (peanut protein) between the patches in peanut allergic children ages
4-11.
The Company named that assessment EQUAL, which stands for Equivalence in Uptake of ALlergen. The FDA also recommended conducting a
6-month,
well-controlled safety and adhesion trial to assess a modified Viaskin Peanut patch in the intended patient population. The Company later named this study STAMP, which stands for Safety, Tolerability, and Adhesion of Modified PatchesPatches.
Based on the January 2021 FDA feedback, the Company defined three parallel workstreams:
1. Identify a modified Viaskin patch (which the Company calls mVP).
 
6
1.
Identify a modified Viaskin patch (“mVP”).
2. Generate the
6-month
2.
Generate the 6-month safety and adhesion clinical data FDA requested via STAMP, which the Company expected to be the longest component of the mVP clinical plan. The Company prioritized the STAMP protocol submission so the Company could begin the study as soon as possible.
3.
3.
Demonstrate the equivalence in allergen uptake between the current and modified patches in the intended patient population via EQUAL. The complexity of EQUAL hinged on the lack of established clinical and regulatory criteria to characterize allergen uptake via an epicutaneous patch. To support those exchanges, the Company outlined its proposed approach to demonstrate allergen uptake equivalence between the two patches, and allotted time to generate informative data through two additional studies:
 a.
PREQUAL, a Phase I study with adult healthy volunteers to optimize the allergen sample collection methodologies and validate the assays we intendthe Company intends to use in EQUAL
 b.
‘EQUAL in adults’—a second Phase I study with adult healthy volunteers to compare the allergen uptake of cVP and Mvp;mVP;
In March 2021, the Company commenced CHAMP (Comparison of adHesion Among Modified Patches), a trial in healthy adult volunteers to evaluate the adhesion of five modified Viaskin Peanut patches, to identify the one or two best-performing patches, which the Company completed in the second quarter of 2021. Based on the adhesion parameters studied, the Company selected the modified patch to advance to further clinical testing in the intended patient population. All modified Viaskin Peanut patches demonstrated better adhesion performance as compared to the then-current Viaskin Peanut patch, and the Company then selected two modified patches that performed best out of the five modified patches studied for further development. The Company then selected the circular patch for further development, which is approximately 50% larger in size relative to the current patch and circular in shape.
In May 2021, the Company submitted its proposed STAMP protocol to the FDA, and
in
October 2021, the Company received an Advice/Information Request letter from the FDA. In this letter, the FDA requested a stepwise approach to the modified Viaskin patch development program and provided partial feedback on the STAMP protocol. Specifically, the FDA requested that the Company conduct allergen uptake comparison studies (i.e., ‘EQUAL in Adults’, EQUAL), and submit the allergen uptake comparison data for FDA review and feedback prior to starting the STAMP study. The FDA’s explanation was that the results from the allergen uptake studies might affect the design of the STAMP study.
After careful review of the FDA’s information requests, and consideration of all other options, in December 2021, the Company decided not to pursue the stepwise approach to the development plans for Viaskin Peanut as requested by the FDA in the October 2021 feedback.letter. The Company estimated that the FDA’s newly proposed sequentialstepwise approach would require at least five rounds of exchanges that necessitate FDA alignment prior to initiating STAMP, the
6-month
safety and adhesion study. The Company does not believe this approach to be in the best interest of patients due to the significant time delays associated with FDA review of a resource dependent
(non-PDUFA)
product. As such, in December 2021, the Company announced it plansits plan to initiate a pivotal Phase
3
— III placebo-controlled efficacy trial for a modified Viaskin Peanut patch (mVP) in children ages 4-11.in the intended patient population. The studyclinical trial will also include updates to the Instructions for Use (IFU). The Company considers this trialapproach the most straightforward to potentially demonstrate effectiveness, safety, and improved in vivo adhesion of the modified Viaskin Peanut system. The FDA has confirmed the Company’s change in strategy is agreeable via oral and written exchanges.
9
Table of Contents
The protocol for the new Phase 3 pivotal study of thefor modified Viaskin Peanut (“mVP”) patch was completed athas been named VITESSE (Viaskin Peanut Immunotherapy Trial to Evaluate Safety, Simplicity and Efficacy), which means “speed” in French.
In May 2022, the end of February 2022
Company announced that the FDA granted it a Type C meeting to align on the protocol and the study protocol was submitted to the FDA in April 2022. The Company
has been granted aas part of Type C meeting bybriefing package.
On September 9, 2022, the Company announced the initiation of the Phase 3 study, using the modified Viaskin™ Peanut Patch, in peanut-allergic children ages 4 to 7 years.
On September 21, 2022, the Company announced it received feedback from the U.S. FDA in the second quarterform of 2022a partial clinical hold on its VITESSE Phase 3 clinical study. In the partial clinical hold letter, the FDA specifies changes to alignelements of the VITESSE protocol with the intent for the trial to support a future BLA submission. The modifications noted within the FDA’s communication address design elements, including the statistical analysis of adhesion, minimum daily wear time and technical alignments in methods of categorizing data, to meet study objectives as well as the total number of trial participants on active treatment. The Company has not yet begun the new Phase
3
study protocol.
screening or recruitment of subjects in the VITESSE study. The partial clinical hold is specific to VITESSE and does not impact any other ongoing its clinical studies. The Company expects to provide additional updates following consultation with the FDA.
Viaskin Peanut for children ages 4-11 - European Union Regulatory History and Current Status
In August 2021, the Company announced it has receivedits receipt from the EMA of the Day 180 list of outstanding issues, which is an established part of the prescribed EMA review process. It is a letter that is meant to include any remaining questions or objections at that stage in the process. The EMA indicated many of their objections and major objections from the Day 120 list of questions had been answered. One major objection remained at Day 180. The Major Objection questioned the limitations of the data, for example, the clinical relevance and effect size supported by a single pivotal study.
In December 2021, the Company announced it hashad withdrawn the Marketing Authorization Application for Viaskin Peanut and formally notified the EMA of our decision. The initial filing was supported by positive data from a single, placebo-controlled Phase 3 pivotal trial known as PEPITES
(V712-301).
The decision to withdraw was based on the view of EMA Committee for Medicinal Products for Human Use (CHMP) that the data available to date from a single pivotal study were not sufficient to preclude a Major Objection at Day 180 in the review cycle. The Company believes data from a second Viaskin Peanut pivotal study will support a more robust path for licensure of Viaskin Peanut in the EU. The Company intends to resubmit the MAA when that data set is available.
Viaskin Peanut for children ages
1-3
On
10
Table of Contents
In June 26, 2020, the Company announced that in Part A, patients in both treatment arms showed consistent treatment effects after 12 months of therapy, as assessed by a double-blind placebo-controlled food challenge and biomarker results. Part A subjects were not included in Part B and the efficacy analyses from Part A were not statistically powered to demonstrate superiority of either dose versus placebo. These results validate the ongoing investigation of the 250 Pg dose in this age group, which is the dose being studied in Part B of the study. Enrollment for Part B of EPITOPE was completed in the first quarter of 20212022.
In June 2022, the Company announced that its pivotal Phase III trial EPITOPE, assessing the safety and efficacy of Viaskin™ Peanut 250 µg for the treatment of peanut-allergic toddlers ages 1 to 3 years, met its primary endpoint. Viaskin Peanut demonstrated a statistically significant treatment effect (p<0.001), with 67.0% of subjects in the Viaskin Peanut arm meeting the treatment responder criteria after 12 months, as compared to 33.5% of subjects in the placebo arm (difference in response rates = 33.4 %, 95 % CI = 22.4% - 44.5 %).
top-line
The Company intends to further analyze the data from EPITOPE and explore regulatory pathways for Viaskin Peanut in children ages 1 to 3 years, given the high unmet need and absence of approved treatments for this vulnerable population.
results are expected
Financing

In May 2022, the Company announced that pursuant to the Company’s
At-The-Market
program established in May 2022 (the “ATM Program”), it had issued and completed sales of new ordinary shares (the “Ordinary Shares”) in form of American Depositary Shares (“ADSs”), for a total gross amount of $15.3 million. In this context, 6,036,238 new Ordinary Shares in form of ADS have been 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 dollar per ADS (i.e., a subscription price per Ordinary Share of 2.41 euro based on the USD/EUR exchange rate of 1.0531 dollar for 1 euro, as published by the endEuropean Central Bank on May 4, 2022) and each ADS giving the right to receive
one-half
of one ordinary share of the second quarterCompany.
In June 2022, the Company announced an aggregate $194 million private investment in public equity (PIPE) financing (corresponding to €181 million on the basis of 2022.an exchange rate of $1.0739 = €1.00 published by the European Central Bank on June 8, 2022) 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 were sold to the purchasers 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 the PIPE financing total approximately $194 million (corresponding to €181 million), before deducting private placement expenses.
7The ordinary shares, including the ordinary shares issuable upon exercise of the pre-funded warrants from the PIPE financing, have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. In connection with the PIPE financing, the Company entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company filed has a registration statement with the Securities and Exchange Commission (the “SEC”) registering the resale of 59,269,629 ordinary shares issued in the PIPE financing, including ordinary shares underlying the pre-funded warrants.
COVID-19
Pandemic
On March 11, 2020, the World Health Organization declared
COVID-19
a pandemic. This global health crisis led many countries to impose national containment measures and travel bans. In view of this exceptional situation, the Company decided to take all measures aimed primarily at guaranteeing the safety of its employees and the continuation of ongoing clinical trials, in compliance with the directives of the authorities in each country. The Company has experienced a decrease in new patients enrolling in the ongoing clinical studies and it has had to adapt the protocols of its clinical trials because patients remain subject to travel restrictions.
The Company has assessed the impact of the uncertainties created by the pandemic. As of March 31,September 30, 2022, those uncertainties were taken into account in the assumptions underlying the estimates and judgments used by the Company. The Company continues to update these estimates and assumptions as the situation evolves. The effects of the
COVID-19
pandemic are presented in the relevant line items of the condensed consolidated statement of financial position and the condensed consolidated statement of operations and comprehensive loss according to the function or nature of the income or expense.expense, and Comprehensive Loss.
Legal Proceedings
A class action complaint was filed on January 15, 2019 in the United States District Court for the District of New Jersey, entitled Travis
Ito-Stone
v. DBV Technologies, et al., Case No.
2:19-cv-00525.
The complaint alleged that the Company and its former Chief Executive
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Officer, its current Chief Executive Officer, and its former Deputy Chief Executive Officer violated certain federal securities laws, specifically under Sections 10(b) and 20(a) of the Exchange Act, and Rule
10b-5
promulgated thereunder. The plaintiffs seek unspecified damages on behalf of a purported class of purchasers of the Company’s securities between February 14, 2018 and August 4, 2020 and also held the Company’s securities on December 20, 2018 and/or March 16, 2020 and/or August 4, 2020.
A hearing was held on July 29, 2021 in the U.S. District Court for the District of New Jersey where the Court entered an order granting the Company’s Motion to Dismiss the Second Amended Class Action Complaint without prejudice. As the dismissal was without prejudice, the Plaintiffs replead their case by filing a Third Amended Class Action Complaint on September 30, 2021 in the same Court. The company moved to dismiss third amended complaint on December 10, 2021.
On July 29, 2022 the Court entered an order granting the Company’s Motion to Dismiss the Plaintiff’s Third Amended Complaint with prejudice. The Company believesCourt indicated that the allegations containedThird Amended Complaint was deficient in a number of ways, failing to allege a violation of the amended complaint are without meritSecurities Exchange Act of 1934, and will continueordered the matter closed. Per court procedural rules, the Plaintiffs have 30 days to defendappeal the case vigorously.dismissal of the Third Amended Complaint. The Company believesPlaintiffs failed to file an appeal of the dismissal of the Third Amended Complaint within the 30-day period and this complaint will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.matter is resolved with finality.
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Note 33: Cash and Cash Equivalents
The following table presents for each reported period,tables summarize the breakdown of cash and cash equivalents:equivalents as of September 30, 2022 and December 31,
2021:
 
   
March 31,
   
December 31,
 
   
2022
   
2021
 
Cash
   29,145    31,427 
Cash equivalents
   44,963    45,874 
   
 
 
   
 
 
 
Total cash and cash equivalents as reported in the statements of financial position
  
 
74,107
 
  
 
77,301
 
   
 
 
   
 
 
 
Bank overdrafts
   0      0   
   
 
 
   
 
 
 
Total net cash and cash equivalents as reported in the statements of cash flows
  
 
74,107
 
  
 
77,301
 
   
 
 
   
 
 
 
   
September 30,
   
December 31,
 
   
2022
   
2021
 
Cash
   167,916    31,427 
Cash equivalents
   44,754    45,874 
   
 
 
   
 
 
 
Total cash and cash equivalents as reported in the statements of financial position
  
 
212,670
 
  
 
77,301
 
   
 
 
   
 
 
 
Cash equivalents are immediately convertible into cash at no or insignificant cost, on demand. They are measured using level 1 fair value measurements.
8
Note 4 Other Current Assets
Other current assets consisted of the following:

 
   
March 31,
   
December 31,
 
   
2022
   
2021
 
Research tax credit
   8,430    28,092 
Other tax claims
   3,696    3,561 
Prepaid expenses
   3,386    4,149 
Other receivables
   817    1,283 
   
 
 
   
 
 
 
Total
  
 
16,329
 
  
 
37,085
 
   
 
 
   
 
 
 
   
September 30,
   
December 31,
 
   
2022
   
2021
 
Research tax credit
   4,094    28,092 
Other tax claims
   3,636    3,561 
Prepaid expenses
   4,107    4,149 
Other receivables
   1,188    1,283 
   
 
 
   
 
 
 
Total
  
 
13,025
 
  
 
37,085
 
   
 
 
   
 
 
 
Research tax credit
In the fiscal year ended December 31, 2021, the Company recovered its Small and
Medium-sized
Enterprises, or SMEs, status under EU law, and became therefore eligible again for the immediate reimbursement of the Research Tax Credit.
During the threenine months period ended March 31,September 30, 2022, the Company received the reimbursement of the 2019, 2020 and 20202021 fiscal year research tax credit.
The variance in Research Tax Credit is presented as follow:
follows:
   
Amount in

thousands of US
Dollars

Dollars
 
Opening research tax credit receivable as of January 1, 2022
   28,092 
+ Operating revenue
   1,5694,467 
- Payment received
   (20,87426,386) 
- Adjustment and currency translation effect
   (3582,079) 
   
 
 
 
Closing research tax credit receivable as of March 31,September 30, 2022
  
 
8,4304,094
 
   
 
 
 
Of which -
Non-current
portion
   0—  
Of which - Current portion
  
 
8,4304,094
 
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The other tax claims are primarily related to the VAT as well as the reimbursement of VAT that has been requested. Prepaid expenses are comprised primarily of rental and insurance expenses, as well as legal and scientific consulting fees. Prepaid expenses also include upfront payments which are recognized over the term of the ongoing clinical studies.
9
Note 5 Lease contracts
Future minimum lease payments under the Company’sCompany's operating leases’ right of use as of March 31,September 30, 2022 and December 31, 2021, are as follows:
 
   
March 31, 2022
  
December 31, 2021
 
   
Real estate
  
Other

assets
  
Total
  
Real estate
  
Other

assets
  
Total
 
Current portion
   2,159   66   2,225   3,361   77   3,438 
Year 2
   1,803   18   1,821   3,124   23   3,147 
Year 3
   605   15   620   2,299   18   2,317 
Year 4
   —     —     —     771   1   773 
Year 5
   —     —     —     790   —     790 
Thereafter
   —     —     —     1,220   —     1,220 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total minimum lease payments
  
 
4,567
 
 
 
99
 
 
 
4,666
 
 
 
11,565
 
 
 
119
 
 
 
11,684
 
Less: Effects of discounting
   (358)   (7)   (365)   (1,526)   (8)   (1,534) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Present value of operating lease
  
 
4,209
 
 
 
92
 
 
 
4,302
 
 
 
10,039
 
 
 
111
 
 
 
10,150
 
Less: current portion
   (1,973)   (61)   (2,034)   (2,929)   (74)   (3,003) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Long-term operating lease
  
 
2,236
 
 
 
31
 
 
 
2,268
 
 
 
7,110
 
 
 
37
 
 
 
7,147
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average remaining lease term (years)
   2.21   1.87       4.14   2.01     
Weighted average discount rate
   3.51%   3.32%       4.84%   3.32%     
   
September 30, 2022
  
December 31, 2021
 
   
Real estate
  
Other
assets
  
Total
  
Real estate
  
Other
assets
  
Total
 
Current portion
   1,504   34   1,538   3,361   77   3,438 
Year 2
   1,874   18   1,891   3,124   23   3,147 
Year 3
   103   6   109   2,299   18   2,317 
Year 4
   —     —     —     771   1   773 
Year 5
   —     —     —     790   —     790 
Thereafter
   —     —     —     1,220   —     1,220 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total minimum lease payments
  
 
3,481
 
 
 
58
 
 
 
3,538
 
 
 
11,565
 
 
 
119
 
 
 
11,684
 
Less: Effects of discounting
   (729)   (5)   (734)   (1,526)   (8)   (1,534) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Present value of operating lease
  
 
2,752
 
 
 
52
 
 
 
2,804
 
 
 
10,039
 
 
 
111
 
 
 
10,150
 
Less: current portion
   (1,350)   (31)   (1,381)   (2,929)   (74)   (3,003) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Long-term operating lease
  
 
1,402
 
 
 
22
 
 
 
1,423
 
 
 
7,110
 
 
 
37
 
 
 
7,147
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average remaining lease term (years)
   1.80   —         4.14   2.01     
Weighted average discount rate
   3.50%   0.9%       4.84%   3.32%     
The Company recognizes rent expense, calculated as the remaining cost of the lease allocated over the remaining lease term on a straight-line basis.
Rent expense presented in the condensed consolidated statement of operations and comprehensive loss was:​​​​​​​

 
   
March 31,
 
   
2022
   
2021
 
Operating lease expense / (income)
   (1,150)    847 
   
September 30,
 
  
2022
   
2021
 
Operating lease expense
   1,373    2,480 
Net termination impact
   (1,657)    —   
In January 2022, the company entered into a termination agreement for its U.S. office in Summit, NJ, following the resizing of its facility use. The Company recognized an income
of $1.2 
million
as of March 31,June 30, 2022 due to the early termination of its Summit, NJ lease, offset by the payment of a
one-time
lump sum early termination fee of $1.5 million.
On March 28, 2022, the Company entered into a binding office lease agreement in New Jersey for a lease term of 3 years and 2 months.
The lease commencement was based upon delivery of possession of the premises by the Landlord and occurred on April 1, 2022. Right of use and related lease debt have been recorded starting April 1, 2022 for a gross amount
of
$
0.4 million.
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Supplemental cash flow information related to operating leases is as follows for the period March 31,September 30, 2022 and
2021:
 
   
March 31,
 
   
2022
   
2021
 
Cash paid for amounts included in the measurement of lease liabilities
          
Operating cash flows from operating leases
   583    1,025 
   
September 30,
 
  
2022
   
2021
 
Cash paid for amounts included in the measurement of lease liabilities
   —      —   
Operating cash flows from operating leases
   1,533    2,845 
Note 66: Trade Payables and Other Current Liabilities
6.1 Trade Payables
No discounting was performed on the trade payables to the extent that the amounts did not present payment terms longer than one year at the end of each fiscal period presented.
10
6.2 Other Liabilities
6.2 Other Current LiabilitiesThe following tables summarize the other liabilities as of September 30, 2022 and December 31,
2021:
Other current liabilities consisted of the following:
 
   
March 31,
   
December 31,
 
   
2022
   
2021
 
Social security
   3,995    6,708 
Deferred income
   3,794    4,146 
Tax liabilities
   137    182 
Other debts
   793    1,325 
   
 
 
   
 
 
 
Total
  
 
8,719
 
  
 
12,361
 
   
 
 
   
 
 
 
   
September 30,
   
December 31,
 
   
2022
   
2021
 
   
Other current
liabilities
   
Other non-
current
liabilities
   
Total
   
Other current
liabilities
   
Other non-
current
liabilities
   
Total
 
Employee related liabilities
   4,666    54    4,719    6,708    247    6,954 
Deferred income
   2,911    926    3,836    4,146    1,900    6,046 
Tax liabilities
   405    —      405    182    —      182 
Other debts
   634    —      634    1,325    —      1,325 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  
 
8,615
 
  
 
979
 
  
 
9,594
 
  
 
12,361
 
  
 
2,147
 
  
 
14,508
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
The other current liabilities include short-term debt to employees including social welfare and tax agency obligations.
Deferred income primarily includes deferred income from the collaboration agreement with Nestlé Health Science, which amounted to $3.8 million as of March 31,September 30, 2022.
Note 7: Shareholders’ equity
The share capital as of September 30, 2022 is set at the sum of €9,402,544 ($10,708,725 converted at historical rates). It is divided into 94,025,441 fully authorized, subscribed and
paid-up
shares with a par value of €0.10.
Pursuant to the authorization granted by the General Meeting of the Shareholders held on May 12, 2022 (the “SH General Meeting”), the accumulated net losses of DBV Technologies S.A. after appropriation of the net result for the year ended December 31, 2021 have been allocated to additional
paid-in
capital.
Pursuant to the authorization granted by the SH General Meeting, the Board of Directors, at its meeting of June 9, 2022 (the “Board General
Meeting”):
decided, within the framework of the PIPE financing the principle of a capital increase in cash with cancellation
 of preferential subscription rights, reserved for categories of persons meeting which set out the characteristics included in the 18
th
resolution of the Board General Meeting, through the issuance of Ordinary Shares and warrants to subscribe for Ordinary Shares, for a maximum amount of 6,113,200 New Ordinary Shares, corresponding to the maximum issue ceiling under the 22
nd
resolution of the Board General Meeting;
1
5
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granted a number of authorizations for the purpose of carrying out the
i
ssuance;
sub-delegated
its authority to the Chief Executive Officer for the purpose of implementing the financing.
The Chief Executive Officer, acting pursuant to the sub-delegations of authority granted by the Board of Directors of the Company on June 8, 2022, after receiving the favorable opinion of the Pricing Committee established by the Board of Directors, has, on June 9, 2022 :
decided, making use of the 18
th
resolution of the Board General Meeting, to proceed with a capital increase in cash with cancellation of preferential subscription rights reserved for categories of investors, in accordance with the Article L.
225-128
of French Commercial Code, an amount of € 3,285,566.90, through the issuance of (i) 32,855,669 New Ordinary Shares, to be subscribed in cash at a unit price of €2.90 of share premium) and to be fully paid up at the time of subscription, i.e. a capital increase of a nominal amount of €3,285,566.90 together with a share premium of € 95,281,440.10, i.e. a gross amount of the capital increase of € 98,567,007, and (ii) 28,276,331 prefunded warrants to be subscribed in cash by paying up on the date of issue of € 82,001,359.90 corresponding to the prepayment of the subscription price of the new ordinary shares in the event of exercise of the prefunded warrants,
decided to set the maximum nominal amount of the capital increase resulting from the full exercise of the prefunded warrants at € 2,827,633.10, by issuing a maximum of 28,276,331 ordinary shares, with a value of € 0.10 to be subscribed in cash at the price of € 0.10 euro (without share premium), and to be fully paid up at the time of subscription, i.e. a capital increase of a maximum nominal amount of € 2,827,633.10 (and a share premium corresponding to the amount of the
pre-financed
price released in advance at the time of the subscription of the prefunded warrants ), being specified that this amount does not take into account the nominal value of the ordinary shares to be issued in order to preserve the rights of the holders of securities giving access to the capital issued or to be issued, in accordance with the legal and regulatory provisions and the contractual stipulations providing for other cases of adjustment if necessary;
determined the list of beneficiaries (designated within each of the categories of persons defined in the 18
th
resolution of the Board General Meeting) and the number of New Ordinary Shares and warrants allocated to each of them under the conditions defined in the 18th resolution of the Board General Meeting beneficiaries under the conditions defined in section 5 of the offering circular relating to the PIPE financing. 
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.
The changes in number of outstanding prefunded warrants are as follows:
Prefunded
warrants
Balance as of December 31, 2021
—  
Granted during the period
28,276,331
Forfeited during the period
—  
Exercised/released during the period
—  
Expired during the period
—  
Balance as of September 30, 2022
28,276,331
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Note 78: Share-Based Payments
The Board of Directors has been authorized by the SH General Meeting of the Shareholders to grant restricted stock units (“RSU”), stock options
plan (“SO”) and (Bons
non-employee
warrants (
Bons de Souscription d’Actions
or “BSA”).
During the threenine months ended March 31,September 30, 2022, the Company did not grant anygranted 154,500 stock options and 69,900 restricted stock.
stock units to employees. There have been no changes in the vesting conditions and method of valuation of the SO and RSUs from that disclosed in Note 1
3
13 to the consolidated financial statements included in the Annual Report.
Stock option fair value assumptions during the nine months ended September 30, 2022
Weighted average share price at grant date in €
4.3
Weighted average expected volatility
93.6% 
Weighted average risk-free interest rate
0.89% 
Weighted average expected term (in years)
6
Dividend yield
—  
Weighted average fair value of stock options in €
3.3
Change in Number of BSA/SO/RSU:

   
Number of outstanding
 
   
BSA
   
SO
   
RSUs
 
Balance as of December 31, 2021
  
 
256,693
 
  
 
3,631,210
 
  
 
1,240,520
 
Granted during the period
   —      154,500    69,900 
Forfeited during the period
   —      (238,715)    (92,326) 
Exercised/released during the period
   —      (5,613)    (32,159) 
Expired during the period
   (5,000)    —      —   
   
 
 
   
 
 
   
 
 
 
Balance as of September 30, 2022
  
 
251,693
 
  
 
3,541,383
 
  
 
1,185,936
 
   
 
 
   
 
 
   
 
 
 
Share-based payments exp
e
nses reflected in the condensed consolidated statements of operations is as
follows:
 
   
Number of outstanding
   
BSA
   
SO
   
RSUs
 
Balance as of December 31, 2021
  
 
256,693
   
 
3,631,210
 
  
 
1,240,520
 
Granted during the period
   —      —      —   
Forfeited during the period
   —      (159,403)    (56,113) 
Exercised/released during the period
   0      —      (775) 
Expired during the period
   —      —      0   
   
 
 
   
 
 
   
 
 
 
Balance as of March 31, 2022
  
 
256,693
 
  
 
3,471,808
 
  
 
1,183,633
 
   
 
 
   
 
 
   
 
 
 
Reconciliation of the share-based payments expenses with the consolidated statements of operations
   
Three months Ended March 31,
 
   
2022
   
2021
 
Research and development
  SO   (375)    (376) 
   RSU   (208)    (251) 
    
Sales and marketing
  SO   5    (49) 
   RSU   1    (22) 
    
General and administrative
  SO   (698)    (644) 
   RSU   (87)    (91) 
      
 
 
   
 
 
 
Total share-based compensation (expense)
     
 
(1,363
) 
  
 
(1,433
) 
      
 
 
   
 
 
 
   
Three Months Ended
September 30,
  
Nine Months Ended
September 30,
 
   
2022
  
2021
  
2022
  
2021
 
Research & development
   SO    (337)   (273)   (1,002)   (952) 
    RSU    (201)   (660)   (594)   (795) 
Sales & marketing
   SO    30   (60)   (3)   (172) 
    RSU    20   (27)   4   (75) 
General & administrative
   SO    (423)   (439)   (1,599)   (1,791) 
    RSU    (66)   (92)   (223)   (293) 
        
 
 
  
 
 
  
 
 
  
 
 
 
Total share-based compensation (expense)
       
 
(976
) 
 
 
(1,551
) 
 
 
(3,416
) 
 
 
(4,078
) 
        
 
 
  
 
 
  
 
 
  
 
 
 
 
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Note 89: Contingencies
Current
The following tables summarize the contingencies and
non-current
contingencies break down as follows:
   
March 31,
   
December 31,
 
   
2022
   
2021
 
Current contingencies
   3,529    4,095 
Non-current
contingencies
   5,758    6,758 
 �� 
 
 
   
 
 
 
Total contingencies
  
 
9,288
 
  
 
10,853
 
   
 
 
   
 
 
 
The table below shows movements in contingencies:of September 30, 2022 and December 31, 2021:
 
   
Pension retirement

obligations
   
Collaboration

agreement -

Loss at

completion
   
Other

contingencies
   
Total
 
At January 1, 2022
  
 
1,008
 
  
 
9,800
 
  
 
45
 
  
 
10,853
 
Increases in liabilities
   0      0      0      0   
Used liabilities
   —      (1,286)    (45)    (1,331) 
Reversals of unused liabilities
   (9)    —      —      (9) 
Net interest related to employee benefits, and unwinding of discount
   —      —      —      0   
Actuarial gains and losses on defined-benefit plans
   (24)    —      —      (24) 
Currency translation effect
   (20)    (181)    —      (202) 
   
 
 
   
 
 
   
 
 
   
 
 
 
At March 31, 2022
  
 
955
 
  
 
8,332
 
  
 
0  
 
  
 
9,288
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Of which Current
  
 
—  
 
  
 
3,529
 
  
 
0  
 
  
 
3,529
 
Of which
Non-current
  
 
955
 
  
 
4,803
 
  
 
—  
 
  
 
5,758
 
   
September 30,
   
December 31,
 
   
2022
   
2021
 
Current contingencies
   3,026    4,095 
Non-current contingencies
   5,272    6,758 
   
 
 
   
 
 
 
Total contingencies
  
 
8,298
 
  
 
10,853
 
   
 
 
   
 
 
 
The changes in contingencies are as follows:
   
Pension
retirement
obligations
   
Collaboration
agreement -
Loss at
completion
   
Other
contingencies
   
Total
 
At January 1, 2022
  
 
1,008
 
  
 
9,800
 
  
 
45
 
 
 
10,853
 
Increases in liabilities
   58    —      —     58 
Used liabilities
   —      (889)    (43)   (932) 
Reversals of unused liabilities
   —      —      —     —   
Net interest related to employee benefits, and unwinding of discount
   —      —      —     —   
Actuarial gains and losses on defined-benefit plans
   (264)    —      —     (264) 
Currency translation effect
   (123)    (1,291)    (3)   (1,417) 
   
 
 
   
 
 
   
 
 
  
 
 
 
At September 30, 2022
  
 
678
 
  
 
7,620
 
  
 
—  
 
 
 
8,298
 
   
 
 
   
 
 
   
 
 
  
 
 
 
Of which Current
  
 
—  
 
  
 
3,026
 
  
 
—  
 
 
 
3,026
 
Of which
Non-current
  
 
678
 
  
 
4,594
 
  
 
—  
 
 
 
5,272
 
In 2021 and during the first threenine months of 2022, the Company updated its measurement of progress of the Phase 2 clinical trial (“PII”) conducted as part of the collaboration and license agreement with Nestlé and updated the cumulative income recognized. The Company has recorded an accrual in the amount of the excess between the Company’s current best estimates of costs yet to be incurred and incomes yet to be recognized for the completion of the PII.
There have been no significant changes in assumptions for the estimation of the retirement commitments from those disclosed in Note 14 to the consolidated financial statements included in the Annual Report.
Note 910: Operating income
The following table summarizes the operating income is broken down induring the following manner:
   
Three months Ended March 31,
 
   
2022
   
2021
 
Research tax credit
   1,569    1,807 
Other operating income
   976    1,133 
   
 
 
   
 
 
 
Total
  
 
2,546
 
  
 
2,941
 
   
 
 
   
 
 
 
12
three and six months ended September 30, 2022 and 2021:
   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2022
   
2021
   
2022
   
2021
 
Research tax credit
   1,407    1,647    4,467    5,324 
Other operating income
   668    (324)    1,681    (2,549) 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  
 
2,074
 
  
 
1,323
 
  
 
6,148
 
  
 
2,776
 
   
 
 
   
 
 
   
 
 
   
 
 
 
As of March 31,September 30, 2022, the Company recorded its collaboration contract’s incomeagreement’s revenue based on its updated measurement of progress of
1
8
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the Phase II clinical trial conducted as part of the collaboration and license agreement with Nestlé Health Science.agreement. The accrual recorded in the amount of the difference between the Company’s current best estimates of costs yet to be incurred and income
revenues yet
to be recognized for the completion of the Phase II clinical trial has been updated accordingly.
Note 1011: Allocation of Personnel Expenses
The Company had an average of 8885 employees during the threenine months ended March 31,September 30, 2022, in comparison with an average of 121105 employees during the threenine months ended March 31,September 30, 2021.
Allocation
The following table summarizes the allocation of Personnel Expensespersonnel expenses by Function:function during the three and nine months ended September 30, 2022 and 2021:
 
   
Three months Ended March 31,
 
   
2022
   
2021
 
Research and Development expenses
   3,075    4,718 
Sales and Marketing expenses
   245    518 
General and Administrative expenses
   2,595    3,766 
   
 
 
   
 
 
 
Total personnel expenses
  
 
5,915
 
  
 
9,002
 
   
 
 
   
 
 
 
   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2022
   
2021
   
2022
   
2021
 
Research and Development expenses
   3,186    4,161    9,357    12,272 
Sales and Marketing expenses
   138    492    727    1,528 
General and Administrative expenses
   1,598    2,583    6,961    9,347 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total personnel expenses
  
 
4,922
 
  
 
7,236
 
  
 
17,045
 
  
 
23,148
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Allocation
The following table summarizes the allocation of Personnel Expensespersonnel expenses by Nature:nature during the three and nine months ended September 30, 2022 and 2021:

 
   
Three months Ended March 31,
 
   
2022
   
2021
 
Wages and salaries
   3,987    4,454 
Social security contributions
   251    1,332 
Expenses for pension commitments
   297    402 
Employer contribution to bonus shares
   16    1,381 
Share-based payments
   1,363    1,433 
   
 
 
   
 
 
 
Total
  
 
5,915
 
  
 
9,002
 
   
 
 
   
 
 
 
   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2022
   
2021
   
2022
   
2021
 
Wages and salaries
   3,505    3,793    11,001   12,629 
Social security contributions
   634    1,110    2,141   3,505 
Expenses for pension commitments
   214    286    723   981 
Employer contribution to bonus shares
   (406)    497    (236)   1,955 
Share-based payments
   976    1,551    3,416   4,078 
   
 
 
   
 
 
   
 
 
  
 
 
 
Total
  
 
4,922
 
  
 
7,236
 
  
 
17,045
 
 
 
23,148
 
   
 
 
   
 
 
   
 
 
  
 
 
 
The decrease in personnel expenses is mainly due to a decreaseddecrease in headcount following the full implementation of athe new organization.
Note 1112: Commitments
There have been 0no significant changes in other commitments from those disclosed in Note 18 to the consolidated financial statements included in the Annual Report.
Note 1213: Relationships with Related Parties
The Company’s related parties consist exclusively of the members of the Board of Directors and the members of the Executive Committee. As of September 30, 2022, the total amount of remuneration granted to the members of the Board of Directors and Executive Committee has not changed significantly since December 31, 2021.
There were 0no new significant
related-party
transactions during the period nor any change in the nature of the transactions from those described in Note 19 to the consolidated financial statements included in the Annual Report.
 
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Note 1314: Loss Per Share
Basic loss per share is calculated by dividing the net loss attributable to the shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. As the Company was in a loss position for each of the three and nine months periods ended March 31,September 30, 2022 and 2021, the diluted loss per share is equal to basic loss per share because the effects of potentially dilutive shares were
anti-dilutive
as a result of the Company’s net loss.
The following is a summary of the ordinary share equivalents that were excluded from the calculation of diluted net loss per share for each of the three and six months ended March 31,September 30, 2022 and 2021 indicated in number of potential shares:
 
   
Three months
Ended
March 31,
 
   
2022
   
2021
 
Non-employee
warrants
   256,693    225,008 
Employee warrants
   0      75,000 
Stock-options
   3,471,808    2,670,710 
Restricted stock units
   1,183,633    1,129,945 
   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2022
   
2021
   
2022
   
2021
 
Non-employee warrants
   251,693    256,693    251,693    256,693 
Stock options
   3,541,383    2,585,710    3,541,383    2,585,710 
Restricted stock units
   1,185,936    1,104,145    1,185,936    1,104,145 
Prefunded warrants
   28,276,331    —      28,276,331    —   
Note 1415: Events after the Close of the Period
The Company evaluated subsequent events that occurred after March 31,September 30, 2022, through the date the condensed consolidated financial statements were issued after their approval by the Board of Directors on April 29, 2022.
On March 28,November 3, 2022 the Company entered into a binding office lease agreementand determined that there are no significant events that require adjustments or disclosure in New Jersey for a lease term of 3 years and 2 months. The lease commencement was based upon delivery of possession of the premises by the
l
andlord and occurred on April 1, 2022. Right of use and related lease debt will be recorded starting April 1, 2022.such condensed consolidated financial statements.
 
14
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Item 2.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part 1, Item 1 of this Report and with our audited financial statements and related notes thereto for the year ended December 31, 2021, included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 9, 2022, or the Annual Report. This discussion and other parts of this Report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause such differences are discussed in the section of this Report titled “Special Note Regarding Forward-Looking Statements” and under “Item 1A. Risk Factors” in the Annual Report.
Overview
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,EPIT
TM
, our proprietary method of delivering biologically active compounds to the immune system through intact skin using Viaskin. We have generated significant data demonstrating that 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. We believe Viaskin may offer convenient, self-administered,
non-invasive
immunotherapy to patients. Our most advanced clinical program is Viaskin Peanut.
Following receipt of a CRL from the FDA in connection with our BLA
Viaskin
TM
Peanut 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 Peanutchildren ages 4-11 in the United States and European Union.
In January 2021, wethe Company received written responses from the FDA to questions provided in the Type A meeting request wethe Company submitted in October 2020 following the CRL.Complete Response Letter received in August 2020. The FDA agreed with ourits position that a modified Viaskin Peanut patch should not be considered as a new product entity provided the occlusion chamber of the current Viaskin Peanut patch and the peanut protein dose of 250 µg (approximately 1/1,0001000 of one peanut) remains unchanged and performs in the same way it has performed previously. In order to confirm the consistency of efficacy data between the existing and a modified patch, FDA requested an assessment comparing the uptake of allergen (peanut protein) between the patches in peanut allergic children ages
4-11.
We The Company named that assessment EQUAL, which stands for Equivalence in Uptake of Allergen.ALlergen. The FDA also recommended conducting a
6-month,
well-controlled safety and adhesion trial to assess a modified Viaskin Peanut patch in the intended patient population. WeThe Company later named this clinical trialstudy STAMP, which stands for Safety, Tolerability, and Adhesion of Modified Patches.Patches
Based on the January 2021 FDA feedback, wethe Company defined three parallel workstreams:
 
1.
Identify a modified Viaskin patch (which we call mVP)(“mVP”).
 
2.
Generate the
6-month
safety and adhesion clinical data FDA requested via STAMP, which wethe Company expected to be the longest component of the mVP clinical plan. WeThe Company prioritized the STAMP protocol submission so wethe Company could begin the clinical trialstudy as soon as possible.
 
3.
Demonstrate the equivalence in allergen uptake between the current and modified patches in the intended patient population via EQUAL. The complexity of EQUAL hinged on the lack of established clinical and regulatory criteria to characterize allergen uptake via an epicutaneous patch. To support those exchanges, wethe Company outlined ourits proposed approach to demonstrate allergen uptake equivalence between the two patches, and allotted time to generate informative data through two additional Phase I clinical trials in healthy adult volunteers:studies:
 
 a.
PREQUAL, a Phase I trialstudy with adult healthy volunteers to optimize the allergen sample collection methodologies and validate the assays we intendthe Company intends to use in EQUAL. The data collection phase of the trial is complete, and the data analysis phase is ongoing.EQUAL
 
 b.
‘EQUAL in adults,’ adults’—a second Phase I trialstudy with adult healthy volunteers to compare the allergen uptake of cVP and mVP.mVP;
In March 2021, wethe Company commenced CHAMP (Comparison of adHesion Among Modified Patches), a Phase I trial in healthy adult volunteers to evaluate the adhesion of five modified Viaskin Peanut patches. Wepatches, to identify the one or two best-performing patches, which the Company completed CHAMP in the second quarter of 2021. Based on the adhesion parameters studied, the Company selected the modified patch to advance to
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further clinical testing in the intended patient population. All modified Viaskin Peanut patches demonstrated better adhesion performance as compared to the then-current Viaskin Peanut patch, and based on the results of CHAMP, weCompany then selected two modified patches that performed best out of the five modified patches studied for further development. WeThe Company then selected the circular patch for further development, which is approximately 50% larger in size relative to the current patch and circular in shape.
In May 2021, wethe Company submitted ourits proposed STAMP protocol to the FDA, and onin October 14, 2021, wethe Company received an Advice/Information Request letter from the FDA. In this letter, the FDA requested a stepwise approach to the modified Viaskin patch development program and provided partial feedback on the STAMP protocol. Specifically, the FDA requested that wethe Company conduct allergen uptake comparison trialsstudies (i.e., ‘EQUAL in Adults,’Adults’, EQUAL), and submit the allergen uptake comparison data for FDA review and feedback prior to starting the STAMP study. The FDA’s explanation was that the results from the allergen uptake trials might affect the design of the STAMP study.
After careful review of the FDA’s information requests, in December 2021, wethe Company decided not to pursue the sequentialstepwise approach to the development plans for Viaskin Peanut as requested by the FDA in the October 2021 feedback. Weletter. The Company estimated that the FDA’s newly proposed sequentialstepwise approach would require at least five rounds of exchanges that necessitate FDA alignment prior to initiating STAMP, the
6-month
safety and adhesion study. As such, in December 2021, wethe Company announced weits plan to initiate a pivotal Phase 3III placebo-controlled efficacy trial for a modified Viaskin Peanut patch (mVP) in children in the intended patient population. The clinical trial will also include updates to the Instructions for Use (IFU). We considerThe Company considers this approach the most straightforward to potentially demonstrate effectiveness, safety, and improved in vivo adhesion of the modified Viaskin Peanut system. The FDA has confirmed (“mVP”)the Company’s change in strategy is agreeable via oral and written exchanges.
The protocol for the new Phase 3 pivotal study of thefor modified Viaskin Peanut (mVP) patch was completed athas been named VITESSE (Viaskin Peanut Immunotherapy Trial to Evaluate Safety, Simplicity and Efficacy), which means “speed” in French.
In May 2022, the end of February 2022Company announced that the FDA granted it a Type C meeting to align on the protocol and the study protocol was submitted to the FDA as part of the Type C meeting briefing package.
On September 9, 2022, the Company announced the initiation of the Phase 3 study, using the modified Viaskin™ Peanut Patch, in April 2022.peanut-allergic children ages 4 to 7 years.
On September 21, 2022, the Company announced it received feedback from the U.S. FDA in the form of a partial clinical hold on its VITESSE Phase 3 clinical study. In the partial clinical hold letter, the FDA specifies changes to elements of the VITESSE protocol with the intent for the trial to support a future BLA submission. The modifications noted within the FDA’s communication address design elements, including the statistical analysis of adhesion, minimum daily wear time and technical alignments in methods of categorizing data, to meet study objectives as well as the total number of trial participants on active treatment. The Company has been granted a Type C meeting bynot yet begun the FDA , which is expected to be heldscreening or recruitment of subjects in the second quarter of 2022,VITESSE study. The partial clinical hold is specific to align onVITESSE and does not impact any other ongoing its clinical studies. The Company expects to provide additional updates following consultation with the new Phase 3 study protocol.FDA.
 
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Viaskin Peanut for children ages 4-11 - European Union Regulatory History and Current Status
In August 2021, the Company announced its receipt from the EMA of the Day 180 list of outstanding issues, which is an established part of the prescribed EMA review process. It is a letter that is meant to include any remaining questions or objections at that stage in the process. The EMA indicated many of their objections and major objections from the Day 120 list of questions had been answered. One major objection remained at Day 180. The Major Objection questioned the limitations of the data, for example, the clinical relevance and effect size supported by a single pivotal study.
In December 2021, the Company announced it had withdrawn the Marketing Authorization Application for Viaskin Peanut and formally notified the EMA of our decision. The initial filing was supported by positive data from a single, placebo-controlled Phase 3 pivotal trial known as PEPITES (V712-301). The decision to withdraw was based on the view of EMA Committee for Medicinal Products for Human Use (CHMP) that the data available to date from a single pivotal study were not sufficient to preclude a Major Objection at Day 180 in the review cycle. The Company believes data from a second Viaskin Peanut pivotal study will support a more robust path for licensure of Viaskin Peanut in the EU. The Company intends to resubmit the MAA when that data set is available.
Viaskin Peanut for children ages 1-3
In June 2020, the Company announced that in Part A, patients in both treatment arms showed consistent treatment effects after 12 months of therapy, as assessed by a double-blind placebo-controlled food challenge and biomarker results. Part A subjects were not included in Part B and the efficacy analyses from Part A were not statistically powered to demonstrate superiority of either dose versus placebo. These results validate the ongoing investigation of the 250 Pg dose in this age group, which is the dose being studied in Part B of the study. Enrollment for Part B of EPITOPE was completed in the first quarter of 2022.
In June 2022, The Company announced that its pivotal Phase III trial EPITOPE, assessing the safety and efficacy of Viaskin™ Peanut 250 µg for the treatment of peanut-allergic toddlers ages 1 to 3 years, met its primary endpoint. Viaskin Peanut demonstrated a statistically significant treatment effect (p<0.001), with 67.0% of subjects in the Viaskin Peanut arm meeting the treatment responder criteria after 12 months, as compared to 33.5% of subjects in the placebo arm (difference in response rates = 33.4 %, 95 % CI = 22.4% - 44.5 %).
DBV intends to further analyze the data from EPITOPE and explore regulatory pathways for Viaskin Peanut in children ages 1 to 3 years, given the high unmet need and absence of approved treatments for this vulnerable population.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the revenue, costs and expenses recognized during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no new policies or significant changes to our critical accounting policies as disclosed in the critical accounting policies described in the Annual Report. Our significant accounting policies are more fully described in Note 1 of the Notes to the Consolidated Financial Statements in Part I, Item 1 of our Annual Report.
Business trends and Results of Operations
Comparison of the Three Months Ended September 30, 2022 and 2021
The following table summarizes our results of operations, derived from our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and presented in thousands of U.S. Dollars, for the three months ended March 31,September 30, 2022 and 2021.
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Three months ended
September 30,
         
   
2022
   
2021
   
$ change
   
% change
 
Operating income
  
$
2,074
 
  
$
1,323
 
  
 
751
 
  
 
57
% 
Operating expenses
        
Research and development expenses
   (15,096)    (16,320)    1,224    (8%) 
Sales and marketing expenses
   (159)    (1,072)    913    (85%) 
General and administrative expenses
   (4,839)    (8,299)    3,460    (42%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Operating expenses
   (20,094)    (25,691)    5,597    (22%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Financial income
   732    336    396    118% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Income tax
   —      —      —      —   
  
 
 
   
 
 
   
 
 
   
 
 
 
Net loss
  
$
(17,287
) 
  
$
(24,033
) 
  
 
6,745
 
  
 
(28
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Basic/diluted Net loss per share attributable to shareholders
  
$
(0.18
) 
  
$
(0.44
) 
    
Operating Income
The following table summarizes our operating income during the three months ended September 30, 2022 and 2021:
 
   
Three months ended
 
   
2022
   
2021
 
Operating income
  
$
2,546
 
  
$
2,941
 
Operating expenses
          
Research and development expenses
   (12,223)    (22,164) 
Sales and marketing expenses
   (464)    (729) 
General and administrative expenses
   (6,630)    (9,683) 
   
 
 
   
 
 
 
Total Operating expenses
  
 
(19,317
) 
  
 
(32,575
) 
   
 
 
   
 
 
 
Financial income
   152    215 
   
 
 
   
 
 
 
Income tax
   (87)    (30) 
   
 
 
   
 
 
 
Net loss
  
$
(16,706
) 
  
$
(29,449
) 
   
 
 
   
 
 
 
Basic/diluted Net loss per share attributable to shareholders
  
$
(0.30
) 
  
$
(0.54
) 
   
Three months ended
September 30,
   
$ change
   
% change
 
   
2022
   
2021
 
Sales
   —      —      —      —   
Other income
   2,074    1,323    751    57% 
Research tax credit
  
 
1,407
 
  
 
1,647
 
   (240)    (15%) 
Other operating income
  
 
668
 
  
 
(324
) 
   992    (306%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total operating income
  
 
2,074
 
  
 
1,323
 
  
 
751
 
  
 
57
% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Comparison of the three months ended March 31, 2022 to the three months ended March 31, 2021
Operating Income
We generatedOur operating income of $2.5 million during the three months ended March 31, 2022 compared to $2.9 million during the three months ended March 31, 2021, a decrease of 13.4%. This income was mainlyis primarily generated from the French research tax credit (
créCrédit d’impôd’Iimpôt recherche)Recherche
, or CIR,“CIR”), and by the revenue recognized under our collaboration agreement with Nestlé Health Science.
   
Three months Ended March

31
   
% change
 
   
2022
   
2021
     
Sales
   —      —     
Other income
   2,546    2,941    (13%) 
Research tax credit
  
 
1,569
 
  
 
1,807
 
   (13%) 
Other operating (loss) income
  
 
976
 
  
 
1,133
 
   (14%) 
  
 
 
   
 
 
   
 
 
 
Total operating income
  
 
2,546
 
  
 
2,941
 
  
 
(13
%) 
  
 
 
   
 
 
   
 
 
 
We generated operating income of $2.1 million during the three months ended September 30, 2022 compared to $ 1.3 million during the three months ended September 30, 2021. The decreaseincrease in operating income is primarily attributable to the decrease ofrevenue recognized under the CIR,Nestlé’s collaboration agreement, as eligible expenses have declined in correlation with Research and Development costs.
As of March 31, 2022, we recorded our collaboration contract income based on our updated the measurement of progress of the Phase II clinical trial conducted as part of the agreement. During the three months ended September 30, 2021 negative revenue was recognized under the Nestlé’s collaboration agreement due to delays in new patient enrollment. The decrease in research tax credit is attributable to the decrease in eligible costs in connection with Research and license agreement with Nestlé Health Science. The accrual recorded in the amount of the difference between our current best estimates of costs yet to be incurred and income yet to be recognized for the completion of the Phase II clinical has been updated accordingly.
16
Operating Expense
Development costs.
Research and Development Expenses
The following table summarizes our research and development expenses incurred during the three months ended March 31,September 30, 2022 and 2021
:
2021:
 
  
Three months ended March 31,
   
$ change
   
% change
   
Three Months Ended
September 30,
         
Research and Development expenses
  
2022
   
2021
           
2022
   
2021
   
$ change
   
% change
 
External clinical-related expenses
   7,350    12,878    (5,528)    (43%)    11,136    8,633    2,503    29% 
Employee-related costs
   2,492    4,091    (1,599)    (39%)    2,648    3,228    (581)    (18%) 
Share-based payment expenses
   583    627    (45)    (7%)    538    933    (395)    (42%) 
Depreciation, amortization and other costs
   1,799    4,568    (2,769)    (61%)    774    3,526    (2,752)    (78%) 
  
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
Total Research and Development expenses
  
 
12,223
 
  
 
22,164
 
  
 
(9,941
) 
  
 
(45
%) 
  
 
15,096
 
  
 
16,320
 
  
 
(1,224
) 
  
 
(8
%) 
  
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
Research and developmentDevelopment expenses decreased by $9.9$1.2 million for the three months ended March 31,September 30, 2022, compared to the three
24
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months ended September 30, 2021, primarily due to a decrease in depreciation, amortization and following the loss at completion recorded on the Phase II clinical trial conducted as part of the Nestlé agreement for the three months ended September 30, 2021. The increase in external clinical-related expenses is driven by the launch of work on VITESSE protocol. We have also continued to practice financial discipline and implemented further cost containment strategies.
Employee-related costs, excluding share-based payment expenses, decreased by $1.0 million for the three months ended September 30, 2022 compared to the three months ended March 31,September 30, 2021 mostly due to EUR/USD exchange variation and workforce reduction.
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Sales and Marketing expenses
The following table summarizes our sales and marketing expenses incurred during the three months ended September 30, 2022 and 2021:
   
Three Months Ended
September 30,
   
$ change
   
% change
 
Sales and Marketing expenses
  
2022
   
2021
 
Personnel expenses
   138    492    (354)    (72%) 
External professional services and other costs
   20    580    (559)    (96%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Sales and Marketing expenses
  
 
159
 
  
 
1,072
 
  
 
(913
) 
  
 
(85
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Sales and marketing expenses amounted to $0.2 million for the three months ended September 30, 2022, compared to $1.1 million for the three months ended September 30, 2021.
Employee-related costs decreased by $0.3 million for the three months ended September 30, 2022, compared to the three months ended September 30, 2021 due to the workforce reduction following full implementation of the new organization.
General and Administrative expenses
The following table summarizes our general and administrative expenses incurred during the three months ended September 30, 2022 and 2021:
   
Three Months Ended
September 30,
   
$ change
   
% change
 
General and Administrative expenses
  
2022
   
2021
 
External professional services
   1,292    2,216    (924)    (42%) 
Employee-related costs
   1,110    2,052    (942)    (46%) 
Share-based payment expenses
   488    530    (42)    (8%) 
Depreciation, amortization and other costs
   1,949    3,501    (1,552)    (44%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total General and Administrative expenses
  
 
4,839
 
  
 
8,299
 
  
 
(3,460
) 
  
 
(42
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
General and Administrative expenses decreased by $3.5 million for the three months ended September 30, 2022, compared to the three months ended September 30, 2021 primarily due to a decrease in depreciation, amortization and other costs as we continued to practice financial discipline and implemented further cost containment strategies.
Financial income (expense)
Our financial income was approximately $0.7 million for the three months ended September 30, 2022, compared to a financial income of $5.5$0.3 million for the three months ended September 30, 2021. This item mainly includes foreign exchange income.
Income tax
We did not have any income tax profit or expense for the three months ended September 30, 2022 nor 2021.
Net loss
Net loss was $17.3 million for the three months ended September 30, 2022, compared to $24.0 million for the three months ended September 30, 2021. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.18 and $0.44 for the three months ended September 30, 2022 and 2021, respectively.
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Business trends and Results of Operations
Comparison of the Nine Months Ended September 30, 2022 and 2021
The following table summarizes our results of operations, derived from our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and presented in thousands of U.S. Dollars, for the nine months ended September 30, 2022 and 2021.
   
Nine months ended
September 30,
   
$ change
   
% change
 
   
2022
   
2021
 
Operating income
  
$
6,148
 
  
$
2,776
 
  
 
3,373
 
  
 
122
% 
Operating expenses
        
Research and development expenses
   (45,930)    (58,663)    12,733    (22)% 
Sales and marketing expenses
   (1,659)    (2,999)    1,340    (45)% 
General and administrative expenses
   (17,173)    (26,250)    9,077    (35)% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Operating expenses
   (64,762)    (87,912)    23,150    (26)% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Financial income
   1,668    597    1,071    179% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Income tax (expense)
   (87)    404    (491)    (122)% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Net loss
  
$
(57,033
) 
  
$
(84,136
) 
  
 
27,103
 
  
 
(32
)% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Basic/diluted Net loss per share attributable to shareholders
  
$
(0.79
) 
  
$
(1.53
) 
    
Operating Income
The following table summarizes our operating income during the nine months ended September 30, 2022 and 2021:
   
Nine months ended
September 30,
   
$ change
   
% change
 
   
2022
   
2021
 
Sales
   —      —       
Other income
   6,148    2,776    3,373    122% 
Research tax credit
  
 
4,467
 
  
 
5,324
 
  
 
(857
) 
  
 
(16
%) 
Other operating income
  
 
1,681
 
  
 
(2,549
) 
  
 
4,230
 
  
 
(166
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total operating income
  
 
6,148
 
  
 
2,776
 
  
 
3,373
 
  
 
122
% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Our operating income was primarily generated from the French research tax credit (
Crédit d’Impôt Recherche
or “CIR”) and from revenue recognized under our collaboration agreement with Nestlé Health Science. We generated operating income of $6.1 million during the nine months ended September 30, 2022, compared to $2.8 million during the nine months ended September 30, 2021.
The increase in operating income is primarily attributable to 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. During the nine months ended September 30, 2021 negative revenue was recognized under the Nestlé’s collaboration 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 costs.
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Research and Development Expenses
The following table summarizes our research and development expenses incurred during the nine months ended September 30, 2022 and 2021:
   
Nine Months Ended
September 30,
         
   
2022
   
2021
   
$ change
   
% change
 
Research and Development expenses
        
External clinical-related expenses
   30,150    31,319    (1,169)    (4%) 
Employee-related costs
   7,761    10,525    (2,764)    (26%) 
Share-based payment expenses
   1,596    1,747    (151)    (9%) 
Depreciation, amortization and other costs
   6,423    15,072    (8,649)    (57%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Research and Development expenses
  
 
45,930
 
  
 
58,663
 
  
 
(12,733
) 
  
 
(22
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Research and Development expenses decreased by $12.7 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 primarily due to a decrease in external clinical-related expenses as main component of the work on clinical studies such as REALISE and EPITOPE has been finalized during the year 2021. We have also continued to practice financial diligencediscipline and implemented further cost containment strategies.
Employee-related costs, excluding share-based paymentpayments expenses, decreased by $1.6$2.8 million for the threenine months ended March 31,September 30, 2022, compared to the threenine months ended March 31,September 30, 2021 due to the workforce reduction following full implementation of the new organization.
The decrease in depreciation, amortization and other costs was primarily due to the reversal of loss at completion recorded on the Phase II clinical trial conducted as part of the Nestlé agreement.
Sales and Marketing expenses
The following table summarizes our sales and marketing expenses incurred during the threenine months ended March 31,September 30, 2022 and 2021:
 
   
Three months ended March

31,
   
$ change
   
% change
 
Sales & Marketing expenses
  
2022
   
2021
         
Employee-related costs
   245    518    (273)    (53%) 
External professional services
   122    84    38    45% 
Share-based payment expenses
   (5)    71    (76)    (108%) 
Depreciation, amortization and other costs
   102    56    46    82% 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Sales & Marketing expenses
  
 
464
 
  
 
729
 
  
 
(265
) 
  
 
(36
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
   
Nine Months Ended
September 30,
         
   
2022
   
2021
   
$ change
   
% change
 
Sales and Marketing expenses
        
Personnel expenses
   727    1,528    (801)    (52%) 
External professional services and other costs
   932    1,471    (538)    (37%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Sales and Marketing expenses
  
 
1,659
 
  
 
2,999
 
  
 
(1,340
) 
  
 
(45
%) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Sales and marketing expenses decreased by $0.3$1.3 million for the threenine months ended March 31,September 30, 2022, compared to the threenine months ended March 31,September 30, 2021, primarily due to a decrease in employee-related costs, partially offset by depreciation and amortization costs.
Employee-related costs, excluding share-based paymentsPersonnel expenses, decreased by $0.3$0.8 million for the threenine months ended March 31,September 30, 2022, compared to the threenine months ended March 31,September 30, 2021 due to the workforce reduction following full implementation of the new organization.
17
General and Administrative expenses
The following table summarizes our general and administrative expenses incurred during the threenine months ended March 31,September 30, 2022 and 2021:
 
  
Three months ended March 31,
   
$ change
   
% change
   
Nine Months Ended
September 30,
         
General & Administrative expenses
  
2022
   
2021
         
  
2022
   
2021
   
$ change
   
% change
 
General and Administrative expenses
        
External professional services
   1,108    2,287    (1,179)    (52%)    4,171    6,425    (2,255)    (35%) 
Employee-related costs
   1,810    3,031    (1,221)    (40%)    5,139    7,263    (2,124)    (29%) 
Share-based payment expenses
   786    735    51    7%    1,822    2,084    (263)    (13%) 
Depreciation, amortization and other costs
   2,927    3,630    (702)    (19%)    6,042    10,478    (4,436)    (42%) 
  
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
Total General & Administrative expenses
  
 
6,630
 
  
 
9,683
 
  
 
(3,052
) 
  
 
(32
%) 
Total General and Administrative expenses
  
 
17,173
 
  
 
26,250
 
  
 
(9,077
) 
  
 
(35
%) 
  
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
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General and administrativeAdministrative expenses decreased by $3.1$9.1 million for the threenine months ended March 31,September 30, 2022, compared to the threenine months ended March 31,September 30, 2021, primarily due to a decrease in employee-related costsof depreciation, amortization and external professional services as weother costs. We have continued to practice financial diligencediscipline and implemented further cost containment strategies.
Employee-relatedThe decrease in employee-related costs, excluding share-based paymentspayment expenses, decreased by $1.2 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021 dueis directly related to the workforce reduction following full implementation of the new organization.organization
.
Financial income (expense)
Our financial income was $0.2$1.7 million for the threenine months ended March 31,September 30, 2022, andcompared to a financial income of $0.6 million for the nine months ended September 30, 2021. This item mainly includes foreign exchange income.income (expense).
Income tax
Our income tax expense was $87,000 for the nine months ended September 30, 2022, compared to a US Tax income of $404,000 for the nine months ended September 30, 2021.
Net loss
Net loss was $16.7$57.0 million for the threenine months ended March 31,September 30, 2022, compared to $29.4$84.1 million for the threenine months ended March 31,September 30, 2021. Net loss per share (based on the weighted average number of shares outstanding over the period) was $0.30$0.79 and $0.54$1.53 for threethe nine months ended March 31,September 30, 2022 and 2021, respectively.
Liquidity and Capital Resources
Financial Condition
On March 31,September 30, 2022, we had $74.1$212.7 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 $1.5$31.8 and $36.2$89.5 million for the threenine months ended March 31,September 30, 2022 and 2021, respectively. As of March 31,For the nine months ended September 30, 2022, we recorded a net loss of $16.7$57 million. Our net cash flows provided by financing activities increased to $194.4 million during the nine months ended September 30, 2022 from $(0.1) million during the nine months ended September 30, 2021. Financing activities consisted mainly of our global offering in the second quarter of 2022.
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 $74.1 million as of March 31, 2022 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.
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. 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 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.
Our financial statements have been prepared on a going concern basis assuming that we will be successful in our financing objectives. As such, no adjustments have been made to the financial statements relating to the recoverability and classification of the asset carrying amounts or classification of liabilities that might be necessary should we not be able to continue as a going concern.
Sources of Liquidity and Material Cash Requirements
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 $74.1 million as of March 31, 2022 will be sufficient to fund our operations into the first quarter of 2023.
18
We fund short-term cash requirements primarily from payments associated with research tax credits (
Crédit d’Impôt Recherche
).
We have incurred net losses each year since our inception. Substantially all of our net losses resulted from costs incurred in connection with our development programs and from general and administrative expenses associated with our operations. We have not incurred any bank debt.
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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
In May 2022, the Company announced that pursuant to continuethe Company’s ATM program, it had issued and completed sales of new Ordinary Shares in the form of ADSs, for a total gross amount of $15.3 million.
In June 2022, the Company announced an aggregate $194 million PIPE financing (corresponding to €181 million on the basis of an exchange rate of $1.0739 = €1.00 published by the European Central Bank on June 8, 2022) from the sale of 32,855,669 Ordinary Shares, as a going concern. We intendwell as pre-funded warrants to seek additional capital as we prepare for the launch of Viaskin Peanut, if approved, and continue other research and development efforts. We may seekpurchase up 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 of28,276,331 Ordinary Shares.
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. 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 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.
The following table presents our material cash requirements for future periods:
 
  
Material Cash Requirements Due by the period Ended
March 31,
   
Material Cash Requirements Due by the period
Ended
September 30,
 
  
2023
   
2024-2025
   
2026-2027
   
Thereafter
   
Total
   
2023
   
2024
   
2025
   
Thereafter
   
Total
 
  
(Amounts in thousands)
   
(Amounts in thousands)
 
Conditional advances
   333    —      —      —      333 
Operating leases
   2,034    2,268    —      —      4,302    1,381    1,423    —      —      2,804 
Purchase obligations - Obligations Under the Terms of CRO Agreements
   20,785    8,825    3,457    —      33,067    12,411    36,234    7,805    —      56,450 
  
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
Total
   23,152    11,094    3,457    —      37,703    13,791    37,657    7,805    —      59,254 
The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including interest on long-term debt, fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty.
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 financingfinance the pharmaceutical development of Viaskin
™
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 will endended 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 $3.9$3 million cash requirement as of March 31,September 30, 2022 which expires March 8, 2024.
We also have facilities in North America that were initially intended to support our U.S. subsidiary as well as future commercialization needs. We lease 3,780 square feet of office space in Tower 49, New York, New York. This lease is for a period of 65 months and expires on February 25, 2023. In light of our global restructuring, the current stage of regulatory interactions regarding Viaskin Peanut, and the ongoing
COVID-19
pandemic, we entered into a sublease agreement of this office space in June 2021. The NYC office represents a $0.3$0.2 million cash requirement as of March 31,September 30, 2022 until the first quarter of 2023.
On March 28, 2022, the Company entered into a binding office lease agreement in New Jersey for a lease term of 3 years and 2 months. The lease commencement was based upon delivery of possession of the premises by the Landlord and occurred on April 1, 2022. RightThe principal offices occupy a 5,799 square meter facility, and represents a $0.4 million cash requirement as of use and related lease debt will be recorded starting AprilSeptember 30, 2022 which expires May 1, 2022.2025.
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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 $105.5$125.9 million. As of March 31,September 30, 2022, the amount we are still obligated to pay in connection with these contracts through 20242025 is $33.1$56.4 million.
 
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Summary Statement of Cash flowsFlows
The table below summarizes our sources and uses of cash for the threenine months ended March 21,September 30, 2022 and 2021:2021.
 
  
Three months ended March

31,
   
% change
   
Nine months ended
September 30,
     
(Amounts in thousands of U.S. Dollars)
  
2022
   
2021
       
2022
 
2021
 
$ change
 
% of change
 
Net cash flow used in operating activities
   (1,483)    (36,204)    (96%)    (31,781)   (89,452)   57,671   (64%) 
Net cash flow provided by (used in) investing activities
   11    (185)    (106%) 
Net cash flow (used in) provided by financing activities
   (129)    440    
(129
%)
 
Net cash flow used in investing activities
   (66)   41   (107)   (262%) 
Net cash flow provided by financing activities
   194,403   (103)   194,506   * 
Effect of exchange rate changes on cash and cash equivalents
   (1,594)    (7,944)    
(80
%)
 		   (27,186)   (8,643)   (18,543)   215% 
  
 
   
 
   
 
   
 
  
 
  
 
  
 
 
Net (decrease) increase in cash and cash equivalents
  
 
(3,194
) 
  
 
(43,893
) 
  
 
(93
%) 
  
 
135,369
 
 
 
(98,157
) 
 
 
233,527
 
 
 
(238
%) 
  
 
   
 
   
 
   
 
  
 
  
 
  
 
 
 
Operating
*
Activities
Percentage not meaningful
Operating Activities
Our net cash flows used in operating activities were $1.4$31.8 million and $36.2$89.5 million during the threenine months ended March 31,September 30, 2022 and 2021, respectively. OurDuring the nine months period ended September 30, 2022, we received $21.1 million of research tax credit’s reimbursement for the 2019, 2020 and 2021 fiscal year. Excluding research tax credit reimbursement, our net cash flows used in operating activities decreased by $34.7$31.3 million, or 95.9%35%, mainly due to the budget disciplinecost containment measures we took, in particular the decrease in personnel expenses, which was directly relatedand to the workforce reduction we implemented as partfollowing full implementation of our global restructuring plan. the new organization
.
Cash flows used in operating activities for the threenine months ended March 31,September 30, 2021 included restructuring costs paid for $0.7 million.
Financing Activities
Our net cash flows provided by financing activities increased to $194.4 million during the nine months ended September 30, 2022 also included $20.9 millionfrom $103,000 during the nine months ended September 30, 2021. Financing activities consisted mainly of reimbursement ofour global offering in the Research Tax Credit.
Based on our current assumptions, we expect that our current cash and cash equivalents will support our operations into the firstsecond quarter of 2023.2022.
Off-Balance
Sheet Arrangements
We have not entered into any
off-balance
sheet arrangements and do not have variable interests in variable interest entities.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the revenue, costs and expenses recognized during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no new policies or significant changes to our critical accounting policies as disclosed in the critical accounting policies described in the Annual Report. Our significant accounting policies are more fully described in Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 9, 2022.
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.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this item.
 
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4.Our market risks have not changed materially from those disclosed in item 7A of the Annual Report.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Based on theirits evaluation as of March 31,September 30, 2022, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures (as defined in Rule
13a-15(e)
and 15d-15(e) under the Exchange Act) were effective to provide reasonable assurance that (i) the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’sSEC's rules and forms, and (ii) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’smanagement's evaluation pursuant to Rules
13a-15(d)
or
15d-15(d)
of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitation on Effectiveness of Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies and procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error of fraud may occur and not be detected.
 
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PART II – Other Informationinformation
Item 1.
Item 1. Legal Proceedings
See “Note 2: Significant Events and Transactions – Legal Proceedings” in the notes to the condensed consolidated financial statements included elsewhere in this Report.
Item 1A.
Item 1A. Risk Factors
Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and trading price of our securities. In addition to the other informationExcept as set forth in this Quarterly Report, you should carefully consider the factors described in Part I, Item 1A. “ Risk Factors” of our Annual Report. Therebelow, there have been no material changes in our risk factors from those disclosed in the Annual Report.
Future sales of ordinary shares or ADSs by existing shareholders could depress the market price of the ADSs.
Item 2.
As of December 31, 2021, 55,095,762 Ordinary Shares were issued and outstanding. Sales of a substantial number of shares of our Ordinary Shares or ADSs in the public market, or the perception that these sales might occur, could depress the market price of our securities and could impair our ability to raise capital through the sale of additional equity securities. A substantial number of our shares are now generally freely tradable, subject, in the case of sales by our affiliates, to the volume limitations and other provisions of Rule 144 under the Securities Act. If holders of these shares sell, or indicate an intent to sell, substantial amounts of our securities in the public market, the trading price of our securities could decline significantly.
In June 2022, we completed a $194 million PIPE financing from the sale of (i) 32,855,669 Ordinary Shares, nominal value €0.10 per share at a price per Ordinary Share of €3.00 (corresponding to $3.22 on the basis of an exchange rate of $1.0739 = €1.00 published by the European Central Bank on June 8, 2022), and (ii) pre-funded warrants to purchase an aggregate of 28,276,331 Ordinary Shares (the “Warrant Shares”) at a pre-funded price per pre-funded warrant of €2.90 (corresponding to $3.11), which equals the per share price of the Ordinary Shares less the exercise price of €0.10 per pre-funded warrant. Each pre-funded warrant has an exercise price of €0.10 per Warrant Share. Pursuant to a registration rights agreement (the “Registration Rights Agreement”) with the investors, the Company filed a registration statement with the SEC registering the resale of 59,269,629 ordinary shares issued in the PIPE financing, including ordinary shares underlying the pre-funded warrants. The Company also filed a registration statement with the SEC registering the resale of 11,593,170 ordinary shares by Entities affiliated with Baker Bros. Advisors, issued in the PIPE financing, including ordinary shares underlying the pre-funded warrants. As a result, subject to certain beneficial ownership limitations contained in the pre-funded warrants, these shares are freely tradable, without restriction, in the public market. In addition, the exercise of some or all of the pre-funded warrants will increase the number of our outstanding ordinary shares, which may dilute the ownership percentage or voting power of our shareholders.
In addition, we have filed a registration statement with the SEC to register the Ordinary Shares that may be issued under our equity incentive plans. The Ordinary Shares subject to outstanding options under our equity incentive plans, Ordinary Shares reserved for future issuance under our equity incentive plans and Ordinary Shares subject to outstanding warrants will become eligible for sale in the public market in the future, subject to certain legal and contractual limitations. Sales of a large number of the shares issued under these plans in the public market could have an adverse effect on the market price of our securities.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2022, we did not grant any stock options and restricted stock units to employees in France and in the United States.
During the threenine months ended March 31,September 30, 2022, we issued the following unregistered securities:
On March 23, 2022, the issuance of an aggregate of 775 ordinary shares to a non-U.S. employee upon settlement of RSUs;
On May 19, 2022, the issuance of an aggregate of 5,000 ordinary shares to a non-U.S. employee upon settlement of RSUs;
On May 24, 2022, the issuance of an aggregate of 26,135 ordinary shares to a non-U.S. employee upon settlement of RSUs;
Pursuant to the authorization granted by the General Meeting of the Shareholders held on May 12, 2022, the Company offered the opportunity to subscribe for warrants to purchase ordinary shares on May 12, 2022, and on June 9, 2022, the Chief Executive Officer authorized a capital increase for an amount of €3,285,566.90 through the issue of (i) 32,855,669 New Shares with a per value of €0.10 each and (ii) the issuance of 28,276,331 prefunded warrants, with cancellation of shareholders' preferential subscription rights in favor of Braidwell LP, funds advised by Baker Bros. Advisors LP and BpiFrance Participations SA, existing shareholders of the Company and Venrock Healthcare Capital Partners.
On June 8, 2022, we entered into a securities purchase agreement with certain institutional and accredited investors pursuant to which we agreed to issue and sell to the investors i) 32,855,669 ordinary shares, nominal value €0.10 per share, at a price per ordinary share of €3.00 (corresponding to $3.22 on the basis of an exchange rate of $1.0739 = €1.00 published by the European Central Bank on June 8, 2022), and (ii) pre-funded warrants to purchase an aggregate of 28,276,331 ordinary shares (the “Warrant
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Shares”) at a pre-funded price per pre-funded warrant of €2.90 (corresponding to $3.11), which equals the per share price of the ordinary shares less the exercise price of €0.10 per Pre-Funded Warrant. Each Pre-Funded Warrant has an exercise price of €0.10 per Warrant Share. The Pre-Funded Warrants are exercisable at any time after their original issuance and will expire ten years following their issuance. The exercise price and number of shares of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances, including stock splits, stock dividends, reclassifications and the like. The pre-funded warrants issued in the PIPE provide that the holder of the pre-funded warrants will not have the right to exercise any portion of its pre-funded warrants if such holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of ordinary shares outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”). The holder may increase or decrease the Beneficial Ownership Limitation, provided, however, that the holder may only increase the Beneficial Ownership Limitation by (i) obtaining authorization from the French Ministry of Economy in the event the Beneficial Ownership Limitation is being raised above 9.99%, and (ii) by providing 61 days’ notice to the Company, except that in no event will the Beneficial Ownership Limitation exceed 19.99%. The securities issued by us pursuant to the securities purchase agreement and to be issued upon exercise of the warrants were not registered under the Securities Act of 1933, as amended, or the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Pursuant to the Registration Rights Agreement, the Company filed a registration statement with the Securities and Exchange Commission registering the resale of 59,269,629 ordinary shares issued in the PIPE financing, including ordinary shares underlying the pre-funded warrants.
On June 10, 2022, the issuance of 3,100 ordinary shares to a non-U.S. employee upon exercise of 3,100 SO at an exercise price of 4.16 euros per SO, for aggregate proceeds to the Company of 12,896 euros.
On July 8, 2022, the issuance of 2,513 ordinary shares to a U.S. employee upon exercise of 2,513 SO at an exercise price of 4.16 euros per SO, for aggregate proceeds to the Company of 10,454 euros.
On September 23, 2022, the issuance of an aggregate of 249 ordinary shares to a non-U.S. employee upon settlement of RSUs.
None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe these transactions were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Regulation S promulgated under Section 5 of the Securities Act, as transactions by an issuer not involving any public offering or as offerings made to
non-U.S.
resident employees pursuant to an employee benefit plan established and administered in accordance with the law of a country other than the United States (namely, the Republic of France) and in accordance with that country’s practices and documentation. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising.
Item 3.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Item 4.
Not applicable.
Item 5. Other Information
Mine Safety Disclosures
Not applicable.
 
Item 5.
Other Information
None35
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Item 6. Exhibits.
Exhibit Index
 
Incorporated by Reference
Exhibit
  
Description
  
Incorporated by Reference
Schedule
/ Schedule/
Form
  
File
Number
  
Exhibit
  
File
Date
    3.1  By-laws (statuts)(status) of the registrant (English translation)        
  31.1  Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as Amended        
  31.2  Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended        
  32.1*  Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes- OxleySarbanes-Oxley Act of 2002, as amended        
101.INS  Inline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document        
101.SCH  Inline XBRL Taxonomy Extension Schema Document        
101.CAL  Inline XBRL Taxonomy Extension Calculation Linkbase Document        
101.DEF  Inline XBRL Taxonomy Extension Definition Linkbase Document        
101.LAB  Inline XBRL Taxonomy Extension Labels Linkbase Document        
101.PRE  Inline XBRL Taxonomy Extension Presentation Linkbase Document        
104  Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101.        
 
*
Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, (whether made before or after the date of the
Form 10-Q),
irrespective of any general incorporate language contained in such filing.
 
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registration has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
  
DBV Technologies S.A.
  (Registrant)
Date: May     ,November 3, 2022
  
By:
 
/s/ Daniel Tassé
 
  Daniel Tassé
  
Chief Executive Officer
  
(Principal Executive Officer)
Date: May     ,November 3, 2022
  
By:
 
/s/ Sébastien Robitaille
                                
  Sébastien Robitaille
  
Chief Financial Officer
  
(Principal Financial and Accounting Officer)
 
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