Exhibit 99.1
Condensed Consolidated Balance Sheets (Unaudited)
(in CHF thousands)
Balance Sheets | Notes | As of June 30, 2021 | As of December 31, 2020 | |||||||||
ASSETS | ||||||||||||
Non-current assets | ||||||||||||
Property, plant and equipment | 5 | 5,165 | 4,416 | |||||||||
Right-of-use assets | 6 | 2,699 | 2,223 | |||||||||
Long-term accrued income | 3 | 61 | — | |||||||||
Long-term financial assets | 8 | 363 | 334 | |||||||||
Total non-current assets | 8,288 | 6,973 | ||||||||||
Current assets | ||||||||||||
Prepaid expenses | 7 | 2,726 | 3,954 | |||||||||
Short-term accrued income | 3 | 659 | 1,591 | |||||||||
Other current receivables | 282 | 329 | ||||||||||
Short-term financial assets | 8 | 95,000 | 65,000 | |||||||||
Cash and cash equivalents | 8 | 104,135 | 160,893 | |||||||||
Total current assets | 202,802 | 231,767 | ||||||||||
Total assets | 211,090 | 238,740 | ||||||||||
SHAREHOLDERS’ EQUITY AND LIABILITIES | ||||||||||||
Shareholders’ equity | ||||||||||||
Share capital | 1,539 | 1,538 | ||||||||||
Share premium | 354,899 | 346,890 | ||||||||||
Treasury shares | 9 | (85 | ) | (100 | ) | |||||||
Accumulated losses | (167,071 | ) | (132,850 | ) | ||||||||
Total shareholders’ equity | 189,282 | 215,478 | ||||||||||
Non-current liabilities | ||||||||||||
Long-term deferred income | 3 | 61 | — | |||||||||
Long-term lease liabilities | 6 | 2,126 | 1,780 | |||||||||
Net employee defined-benefit liabilities | 7,774 | 7,464 | ||||||||||
Total non-current liabilities | 9,961 | 9,244 | ||||||||||
Current liabilities | ||||||||||||
Trade and other payables | 317 | 2,184 | ||||||||||
Accrued expenses | 10,611 | 11,085 | ||||||||||
Short-term deferred income | 3 | 348 | 306 | |||||||||
Short-term lease liabilities | 6 | 571 | 443 | |||||||||
Total current liabilities | 11,847 | 14,018 | ||||||||||
Total liabilities | 21,808 | 23,262 | ||||||||||
Total shareholders’ equity and liabilities | 211,090 | 238,740 |
The accompanying notes form an integral part of these Interim Condensed Consolidated Financial Statements (Unaudited).
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Condensed Consolidated Statements of Income/(Loss) (Unaudited)
(in CHF thousands except for per share data)
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||
Notes | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
Revenue | ||||||||||||||||||
Contract revenue | 3 | — | 1,083 | — | 13,365 | |||||||||||||
Total revenue | — | 1,083 | — | 13,365 | ||||||||||||||
Operating expenses | ||||||||||||||||||
Research & development expenses | (13,710 | ) | (12,809 | ) | (27,040 | ) | (28,018 | ) | ||||||||||
General & administrative expenses | (5,235 | ) | (4,156 | ) | (9,573 | ) | (8,660 | ) | ||||||||||
Other operating income/(expense) | 256 | 195 | 673 | 324 | ||||||||||||||
Total operating expenses | (18,689 | ) | (16,770 | ) | (35,940 | ) | (36,354 | ) | ||||||||||
Operating loss | (18,689 | ) | (15,687 | ) | (35,940 | ) | (22,989 | ) | ||||||||||
Financial income | — | 17 | — | 78 | ||||||||||||||
Financial expense | (202 | ) | (56 | ) | (228 | ) | (113 | ) | ||||||||||
Exchange differences | (178 | ) | (12 | ) | 365 | (401 | ) | |||||||||||
Finance result, net | 10 | (380 | ) | (51 | ) | 137 | (436 | ) | ||||||||||
Loss before tax | (19,069 | ) | (15,738 | ) | (35,803 | ) | (23,425 | ) | ||||||||||
Income tax expense | — | — | — | — | ||||||||||||||
Loss for the period | (19,069 | ) | (15,738 | ) | (35,803 | ) | (23,425 | ) | ||||||||||
Loss per share: | 4 | |||||||||||||||||
Basic and diluted loss for the period attributable to equity holders | (0.26 | ) | (0.22 | ) | (0.50 | ) | (0.33 | ) |
Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) | For the Three Months ended June 30, | For the Six Months ended June 30, | ||||||||||||||
(in CHF thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Loss for the period | (19,069 | ) | (15,738 | ) | (35,803 | ) | (23,425 | ) | ||||||||
Other comprehensive loss not to be reclassified to income or loss in subsequent periods (net of tax): | ||||||||||||||||
Re-measurement losses on defined-benefit plans (net of tax) | — | — | — | — | ||||||||||||
Total comprehensive loss, net of tax | (19,069 | ) | (15,738 | ) | (35,803 | ) | (23,425 | ) |
The accompanying notes form an integral part of these Interim Condensed Consolidated Financial Statements (Unaudited).
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Condensed Consolidated Statements of Changes in Equity (Unaudited)
(in CHF thousands)
Notes | Share capital | Share premium | Treasury shares | Accumulated losses | Total | |||||||||||||||||
Balance as of January 1, 2020 | 1,437 | 346,526 | — | (75,521 | ) | 272,442 | ||||||||||||||||
Net loss for the period | — | — | — | (23,425 | ) | (23,425 | ) | |||||||||||||||
Other comprehensive income/(loss) | — | — | — | — | — | |||||||||||||||||
Total comprehensive loss | — | — | — | (23,425 | ) | (23,425 | ) | |||||||||||||||
— | ||||||||||||||||||||||
Share-based payments | — | — | — | 1,847 | 1,847 | |||||||||||||||||
Issuance of shares, net of transaction costs: | ||||||||||||||||||||||
restricted share awards | — | 111 | — | (111 | ) | — | ||||||||||||||||
exercise of options | 1 | (3 | ) | — | — | (2 | ) | |||||||||||||||
Balance as of June 30, 2020 | 1,438 | 346,634 | — | (97,210 | ) | 250,862 |
Notes | Share capital | Share premium | Treasury shares | Accumulated losses | Total | |||||||||||||||||
Balance as of January 1, 2021 | 1,538 | 346,890 | (100 | ) | (132,850 | ) | 215,478 | |||||||||||||||
Net loss for the period | — | — | — | (35,803 | ) | (35,803 | ) | |||||||||||||||
Other comprehensive income/(loss) | — | — | — | — | — | |||||||||||||||||
Total comprehensive loss | — | — | — | (35,803 | ) | (35,803 | ) | |||||||||||||||
— | ||||||||||||||||||||||
Share-based payments | — | — | — | 1,694 | 1,694 | |||||||||||||||||
Proceeds from sale of treasury shares in public offerings, net of underwriting fees and transaction costs | 9 | — | 7,825 | 15 | — | 7,840 | ||||||||||||||||
Issuance of shares, net of transaction costs: | ||||||||||||||||||||||
restricted share awards | 1 | 104 | — | (112 | ) | (7 | ) | |||||||||||||||
exercise of options | — | 80 | — | — | 80 | |||||||||||||||||
Balance as of June 30, 2021 | 1,539 | 354,899 | (85 | ) | (167,071 | ) | 189,282 |
The accompanying notes form an integral part of these Interim Condensed Consolidated Financial Statements (Unaudited).
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Condensed Consolidated Statements of Cash Flows (Unaudited)
(in CHF thousands)
For the Six Months Ended June 30, | ||||||||||||
Notes | 2021 | 2020 | ||||||||||
Operating activities | ||||||||||||
Loss for the period | (35,803 | ) | (23,425 | ) | ||||||||
Adjustments to reconcile net loss for the period to net cash flows: | ||||||||||||
Depreciation of property, plant and equipment | 5 | 916 | 734 | |||||||||
Depreciation of right-of-use assets | 6 | 225 | 215 | |||||||||
Finance (income)/expense, net | 10 | (395 | ) | 282 | ||||||||
Share-based compensation expense | 1,694 | 1,847 | ||||||||||
Change in net employee defined benefit liability | 310 | 363 | ||||||||||
Interest expense | 10 | 224 | 109 | |||||||||
Changes in working capital: | ||||||||||||
Decrease/(increase) in prepaid expenses | 7 | 1,131 | (951 | ) | ||||||||
Decrease in accrued income | 870 | 672 | ||||||||||
Decrease/(increase) in other current receivables | 48 | (263 | ) | |||||||||
(Decrease) in accrued expenses | (677 | ) | (2,348 | ) | ||||||||
Increase/(decrease) in deferred income | 3 | 113 | (3,071 | ) | ||||||||
(Decrease)/increase in trade and other payables | (1,824 | ) | 1,357 | |||||||||
Cash used in operating activities | (33,168 | ) | (24,479 | ) | ||||||||
Interest income | — | 78 | ||||||||||
Interest paid | (190 | ) | (151 | ) | ||||||||
Finance costs | (4 | ) | (5 | ) | ||||||||
Net cash flows used in operating activities | (33,362 | ) | (24,557 | ) | ||||||||
Investing activities | ||||||||||||
Short-term financial assets, net | 8 | (30,000 | ) | 10,000 | ||||||||
Purchases of property, plant and equipment | 5 | (1,418 | ) | (587 | ) | |||||||
Rental deposits | 8 | (29 | ) | — | ||||||||
Net cash flows (used in)/provided by investing activities | (31,447 | ) | 9,413 | |||||||||
Financing activities | ||||||||||||
Repayment of short-term financing obligation | — | (263 | ) | |||||||||
Principal payments of lease obligations | 6 | (225 | ) | (215 | ) | |||||||
Proceeds from sale of treasury shares in public offerings, net of underwriting fees and transaction costs | 9 | 7,840 | — | |||||||||
Proceeds from issuance of common shares | 73 | (3 | ) | |||||||||
Net cash flows provided by/(used in) financing activities | 7,688 | (481 | ) | |||||||||
Net decrease in cash and cash equivalents | (57,121 | ) | (15,625 | ) | ||||||||
Cash and cash equivalents at January 1 | 160,893 | 193,587 | ||||||||||
Exchange gain/(loss) on cash and cash equivalents | 363 | (498 | ) | |||||||||
Cash and cash equivalents at June 30 | 104,135 | 177,464 | ||||||||||
Net decrease in cash and cash equivalents | (57,121 | ) | (15,625 | ) |
Additional Information:
For the six months ended June 30, 2021, the acquisition of CHF 0.2 million of property, plant and equipment was non-paid and recorded within accrued expenses.
The accompanying notes form an integral part of these Interim Condensed Consolidated Financial Statements (Unaudited).
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Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)
(in CHF thousands, except share and per share amounts)
1. | Corporate information |
AC Immune SA was founded in 2003. The terms “Company,” “AC Immune,” “ACIU,” “we,” “our,” “ours,” or “us” refer to AC Immune SA together with its fully-owned subsidiary, AC Immune USA, Inc., included in the “Scope of consolidation” (See Note 2).
AC Immune SA is a clinical-stage biopharmaceutical company leveraging our two proprietary technology platforms to discover, design and develop novel proprietary medicines and diagnostics for prevention and treatment of neurodegenerative diseases (NDD) associated with protein misfolding. Misfolded proteins are generally recognized as the leading cause of NDD, such as Alzheimer’s disease (AD) and Parkinson’s disease (PD), with common mechanisms and drug targets, such as amyloid beta (Abeta), Tau, alpha-synuclein (a-syn) and TDP-43. Our corporate strategy is founded upon a three-pillar approach that targets (i) AD, (ii) focused non-AD NDD (including NeuroOrphan indications) and (iii) diagnostics. We use our two unique proprietary platform technologies, SupraAntigen (conformation-specific biologics) and Morphomer (conformation-specific small molecules), to discover, design and develop novel medicines and diagnostics to target misfolded proteins.
The Interim Condensed Consolidated Financial Statements of AC Immune SA as of and for the three and six months ended June 30, 2021 were authorized for issuance by the Company’s Audit and Finance Committee on August 2, 2021.
2. | Basis of preparation and changes to the Company’s accounting policies |
Statement of compliance
These Interim Condensed Consolidated Financial Statements as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020, have been prepared in accordance with International Accounting Standard 34 (IAS 34), Interim Financial Reporting, and such financial information should be read in conjunction with the audited financial statements in AC Immune’s Annual Report on Form 20-F for the year ended December 31, 2020, and any public announcements made by the Company during the interim reporting period.
Basis of measurement
The consolidated financial statements have been prepared under the historical cost convention.
Critical judgments and accounting estimates
The preparation of the Company’s Interim Condensed Consolidated Financial Statements in conformity with IAS 34 requires management to make judgments, estimates and assumptions that affect the amounts reported in the Interim Condensed Consolidated Financial Statements and accompanying notes, and the related application of accounting policies as it relates to the reported amounts of assets, liabilities, income and expenses.
The areas in which the Company has had to make judgments, estimates and assumptions relate to (i) revenue recognition on licensing and collaboration agreements (“LCAs”), (ii) clinical development accruals, (iii) net employee defined-benefit liability, (iv) income taxes, (v) share-based compensation, and (vi) right-of-use assets and lease liabilities. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised.
Scope of consolidation
The Company commenced financial operations in the United States in Q2 2021 via the opening of its fully-owned subsidiary, AC Immune USA, Inc. (“the Subsidiary”). The Subsidiary is registered and organized under the laws of Delaware, USA and fully consolidated in these Interim Condensed Consolidated Financial Statements.
Fair value of financial assets and liabilities
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The Company’s financial assets and liabilities are comprised of receivables, short-term financial assets, cash and cash equivalents, trade payables and lease liabilities. The fair value of these financial instruments approximate their respective carrying values due to the short-term maturity of these instruments, and are held at their amortized cost in accordance with IFRS 9.
Accounting policies, new standards, interpretations and amendments adopted by the Company
The accounting policies adopted in the preparation of the Interim Condensed Consolidated Financial Statements are consistent with those followed in the preparation of the Company’s annual financial statements for the year ended December 31, 2020.
The Company has not adopted any other standard, interpretation or amendment that has been issued but is not yet effective. Such standards are not currently expected to have a material impact on the entity in the current or future reporting periods, and on foreseeable future transactions.
Going concern
The Company believes that it will be able to meet all of its obligations as they fall due for at least 12 months from June 30, 2021, after considering the Company’s cash position of CHF 104.1 million and short-term financial assets of CHF 95.0 million as of June 30, 2021. Hence, the unaudited Interim Condensed Consolidated Financial Statements have been prepared on a going-concern basis.
To date, the Company has financed its cash requirements primarily from its public offerings, share issuances, contract revenues from license and collaboration agreements and grants. The Company is a clinical-stage company and is exposed to all the risks inherent to establishing a business. Inherent to the Company’s business are various risks and uncertainties, including the substantial uncertainty as to whether current projects will succeed. The Company’s success may depend in part upon its ability to (i) establish and maintain a strong patent position and protection; (ii) enter into collaborations with partners in the pharmaceutical and biopharmaceutical industries; (iii) successfully move its product candidates through clinical development; (iv) attract and retain key personnel; and (v) acquire capital to support its operations.
In addition to the foregoing, based on the Company’s current assessment, the Company does not expect any material impact on its long-term development timeline, its liquidity or ability to remain a going concern due to the worldwide spread of the Covid-19 virus. The Company continues to assess the effect on its operations by carefully monitoring the spread of Covid-19 and taking appropriate steps intended to offset any negative impacts from the Covid-19 virus.
3. | Contract revenues |
For the three and six months ended June 30, 2021, AC Immune generated no contract revenues compared with CHF 1.1 million and CHF 13.4 million for the comparable periods in 2020, respectively. This represents a decrease of CHF 1.1 million and CHF 13.4 million, respectively. The Company reclassified CHF 0.2 million and CHF 0.3 million for the comparable periods in 2020, respectively, from contract revenues to other operating income/(expense) for prior grants from the Michael J. Fox Foundation for Parkinson’s Research (“MJFF”).
For the Three Months Ended June 30, | ||||||||
in CHF thousands | 2021 | 2020 | ||||||
Eli Lilly and Company | — | 850 | ||||||
Genentech | — | — | ||||||
Janssen | — | 233 | ||||||
Total contract revenue | — | 1,083 |
For the Six Months Ended June 30, | ||||||||
in CHF thousands | 2021 | 2020 | ||||||
Eli Lilly and Company | — | 12,941 | ||||||
Genentech | — | — | ||||||
Janssen | — | 424 | ||||||
Total contract revenue | — | 13,365 |
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The following table presents changes in the Company’s contract assets and liabilities during the six months ended June 30, 2021 and 2020:
in CHF thousands | Balance at the beginning of the reporting period | Additions | Deductions | Balance at the end of the reporting period | ||||||||||||
Six months ended June 30, 2021 | ||||||||||||||||
Accrued income | 1,591 | 781 | (1,652 | ) | 720 | |||||||||||
Deferred income | 306 | 781 | (678 | ) | 409 | |||||||||||
Six months ended June 30, 2020: | ||||||||||||||||
Accrued income | 1,095 | 424 | (1,095 | ) | 424 | |||||||||||
Deferred income | 4,477 | 196 | (3,266 | ) | 1,407 |
During the three and six months ended June 30, 2021 and 2020, the Company recognized the following contract revenues as a result of changes in the contract asset and the contract liability balances in the respective periods:
For the Three Months Ended June 30, | ||||||||
in CHF thousands | 2021 | 2020 | ||||||
Revenue recognized in the period from: | ||||||||
Amounts included in the contract liability at the beginning of the period | — | 1,045 | ||||||
Performance obligations satisfied in previous periods | — | — |
For the Six Months Ended June 30, | ||||||||
in CHF thousands | 2021 | 2020 | ||||||
Revenue recognized in the period from: | ||||||||
Amounts included in the contract liability at the beginning of the period | — | 3,266 | ||||||
Performance obligations satisfied in previous periods | — | 10,000 |
3.1 | Licensing and collaboration agreements |
For a discussion of our licensing and collaboration agreements for the fiscal year ended December 31, 2020, please refer to Note 12.1 “Licensing and Collaboration agreements” of our Annual Report on Form 20-F for the year ended December 31, 2020 filed on March 23, 2021.
There have been no significant events or transactions associated with our license and collaboration agreements that have occurred for the three and six months ended June 30, 2021.
3.2 | Grant income |
Grants from the Michael J. Fox Foundation
For a discussion of our Grants from the Michael J. Fox Foundation for the fiscal year ended December 31, 2020, please refer to Note 12.2 “Grant Income” of our Annual Report on Form 20-F for the year ended December 31, 2020 filed on March 23, 2021.
For the three months ended June 30, 2021 and 2020, the Company has recognized CHF 0.2 million and CHF 0.2 million in grant income, respectively. For the six months ended June 30, 2021 and 2020, the Company
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has recognized CHF 0.6 million and CHF 0.3 million in grant income, respectively. As of June 30, 2021, the Company has recorded CHF 0.5 million in short-term accrued income and CHF 0.2 million in short-term deferred income.
Grant from the Target ALS Foundation
In Q1 2021, AC Immune was awarded a USD 0.3 (CHF 0.2) million grant from the Target ALS Foundation (“Target ALS”). This grant funds a collaboration between the Company and the Investigators at the Healey Center for ALS at Massachusetts General Hospital (“MGH”) to accelerate the development of the Company’s proprietary immunoassays to detect disease-associated forms of TDP-43 in CSF and blood samples.
For the three months ended June 30, 2021 and 2020, the Company recognized less than CHF 0.1 million and nil in grant income, respectively. For the six months ended June 30, 2021 and 2020, the Company recognized CHF 0.1 million and nil in grant income, respectively. As of June 30, 2021, the Company recorded CHF 0.1 million in short-term and long-term accrued income, respectively, and CHF 0.1 million in short-term and long-term deferred income, respectively.
4. | Loss per share |
For the Three Months Ended June 30, | ||||||||
in CHF thousands except for share and per share data | 2021 | 2020 | ||||||
Loss per share (EPS) | ||||||||
Numerator | ||||||||
Net loss attributable to equity holders of the Company | (19,069 | ) | (15,738 | ) | ||||
Denominator | ||||||||
Weighted-average number of shares outstanding used to compute EPS basic and diluted attributable to equity holders | 72,715,783 | 71,875,102 | ||||||
Basic and diluted loss per share for the period attributable to equity holders | (0.26 | ) | (0.22 | ) |
For the Six Months Ended June 30, | ||||||||
in CHF thousands except for share and per share data | 2021 | 2020 | ||||||
Loss per share (EPS) | ||||||||
Numerator | ||||||||
Net loss attributable to equity holders of the Company | (35,803 | ) | (23,425 | ) | ||||
Denominator | ||||||||
Weighted-average number of shares outstanding used to compute EPS basic and diluted attributable to equity holders | 72,113,581 | 71,869,658 | ||||||
Basic and diluted loss per share for the period attributable to equity holders | (0.50 | ) | (0.33 | ) |
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
For the Three Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Share options issued and outstanding | 1,174,014 | 324,422 | ||||||
Restricted share awards subject to future vesting | 8,511 | 160,396 |
For the Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Share options issued and outstanding | 1,179,992 | 325,828 | ||||||
Restricted share awards subject to future vesting | 11,594 | 157,296 |
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5. | Property, plant and equipment |
The following table shows the movement in the net book values of property, plant and equipment for the six months ended June 30, 2021:
As of June 30, 2021 | ||||||||||||||||||||
in CHF thousands | Furniture | IT Equipment | Lab Equipment | Leasehold Improvements | Total | |||||||||||||||
Acquisition Cost | ||||||||||||||||||||
Balance at December 31, 2020 | 214 | 1,497 | 7,958 | 464 | 10,133 | |||||||||||||||
Acquisitions | 17 | 220 | 1,155 | 273 | 1,665 | |||||||||||||||
Disposals | — | — | (10 | ) | — | (10 | ) | |||||||||||||
Balance at June 30, 2021 | 231 | 1,717 | 9,103 | 737 | 11,788 | |||||||||||||||
Accumulated depreciation | ||||||||||||||||||||
Balance at December 31, 2020 | (61 | ) | (970 | ) | (4,405 | ) | (281 | ) | (5,717 | ) | ||||||||||
Depreciation expense | (21 | ) | (177 | ) | (676 | ) | (42 | ) | (916 | ) | ||||||||||
Disposals | — | — | 10 | — | 10 | |||||||||||||||
Balance at June 30, 2021 | (82 | ) | (1,147 | ) | (5,071 | ) | (323 | ) | (6,623 | ) | ||||||||||
Carrying Amount | ||||||||||||||||||||
December 31, 2020 | 153 | 527 | 3,553 | 183 | 4,416 | |||||||||||||||
June 30, 2021 | 149 | 570 | 4,032 | 414 | 5,165 |
AC Immune continues to enhance its laboratory equipment to support its R&D functions. This effort has continued since the year ended December 31, 2020, with CHF 1.4 million invested in lab and IT equipment, representing an increase of 15%. This is consistent with the Company’s long-term strategic plan.
6. | Right-of-use assets and lease liabilities |
AC Immune recognized additions of CHF 0.7 million for right-of-use of leased assets for the six months ended June 30, 2021.
Regarding lease liabilities, the amortization depends on the rate implicit in the contract or the incremental borrowing rate for the respective lease component. The weighted averages of the incremental borrowing rates are 2.5% for buildings, 4.6% for office equipment and 2.6% for IT equipment, respectively.
The following table shows the movements in the net book values of right-of-use of leased assets for the six months ended June 30, 2021:
in CHF thousands | Buildings | Office Equipment | IT Equipment | Total | ||||||||||||
Balance as of December 31, 2020 | 2,106 | 63 | 54 | 2,223 | ||||||||||||
Additions | 670 | 42 | — | 712 | ||||||||||||
Disposals | — | (11 | ) | — | (11 | ) | ||||||||||
Depreciation | (209 | ) | (9 | ) | (7 | ) | (225 | ) | ||||||||
Balance as of June 30, 2021 | 2,567 | 85 | 47 | 2,699 |
There are no variable lease payments that are not included in the measurement of lease obligations. All extension options have been included in the measurement of lease obligations.
For the three and six months ended June 30, 2021, and 2020, the impact on the Company’s statements of income/(loss) and statements of cash flows is as follows:
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For the Three Months Ended June 30, | ||||||||
in CHF thousands | 2021 | 2020 | ||||||
Statements of income/(loss) | ||||||||
Depreciation of right-of-use assets | 119 | 107 | ||||||
Interest expense on lease liabilities | 15 | 14 | ||||||
Expense for short-term leases and leases of low value | 169 | 142 | ||||||
Total | 303 | 263 | ||||||
Statements of cash flows | ||||||||
Total cash outflow for leases | 303 | 263 |
For the Six Months Ended June 30, | ||||||||
in CHF thousands | 2021 | 2020 | ||||||
Statements of income/(loss) | ||||||||
Depreciation of right-of-use assets | 225 | 215 | ||||||
Interest expense on lease liabilities | 30 | 28 | ||||||
Expense for short-term leases and leases of low value | 356 | 282 | ||||||
Total | 611 | 525 | ||||||
Statements of cash flows | ||||||||
Total cash outflow for leases | 611 | 525 |
The Company’s statements of cash flow were impacted by a shift from cash generated from operations of CHF 0.2 million and CHF 0.2 million to net cash used in financing activities, for the six months ended June 30, 2021, and 2020, respectively.
The following table presents the contractual undiscounted cash flows for lease obligations as of June 30, 2021:
in CHF thousands | As of June 30, 2021 | |||
Less than one year | 634 | |||
1-3 years | 1,261 | |||
3-5 years | 965 | |||
Total | 2,860 |
7. | Prepaid expenses |
Prepaid expenses include prepaid R&D costs, administrative costs and net employee defined benefit liability expenses totaling CHF 2.7 million and CHF 4.0 million as of June 30, 2021 and December 31, 2020, respectively.
8. | Cash and cash equivalents and financial assets |
The following table summarizes AC Immune’s cash and cash equivalents and short-term financial assets as of June 30, 2021 and December 31, 2020:
As of | ||||||||
in CHF thousands | June 30, 2021 | December 31, 2020 | ||||||
Cash and cash equivalents | 104,135 | 160,893 | ||||||
Total | 104,135 | 160,893 |
As of | ||||||||
in CHF thousands | June 30, 2021 | December 31, 2020 | ||||||
Short-term financial assets due in one year or less | 95,000 | 65,000 | ||||||
Total | 95,000 | 65,000 |
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For the six months ended June 30, 2021, the Company purchased a net CHF 30.0 million in short-term financial assets. The Company also has deposits in escrow accounts totaling CHF 0.4 million and CHF 0.3 million for leases of the Company’s premises as of June 30, 2021 and December 31, 2020, respectively.
9. | Share capital and public offerings |
In Q3 2020, AC Immune issued 5,000,000 common shares with a par value of CHF 0.02, which were held as treasury shares. The Company also established an “at the market offering program” (“ATM”) for the sale of up to USD 80.0 (CHF 74.4) million worth of our common shares issued from time to time by entering into an Open Market Sales Agreement (“Sales Agreement”) with Jefferies LLC (“Jefferies”) as the sales agent under a prior registration statement on Form F-3 which expired in Q2 2021.
In Q1 2021, the Company sold 764,977 common shares previously held as treasury shares pursuant to the Sales Agreement, raising USD 8.8 (CHF 8.0) million, net of underwriting fees.
In Q2 2021, the Company filed a new registration statement on Form F-3 and accompanying prospectus supplement in order to renew its ATM program. The Company also entered into a second Open Market Sales Agreement (the “New Sales Agreement”) with Jefferies to continue the ATM program.
For the six months ended June 30, 2021, the Company sold 772,627 common shares previously held as treasury shares pursuant to the New Sales Agreement, raising USD 8.9 (CHF 8.0) million, net of underwriting fees. We paid commissions to Jefferies totaling USD 0.3 (CHF 0.2) million as of June 30, 2021 for share issuances in accordance with our ATM programs.
As a result of these sales, the Company has 4,227,373 treasury shares remaining.
10. | Finance result, net |
For the three months ended June 30, 2021 and 2020, AC Immune recorded CHF 0.4 million and CHF 0.1 million in net financial losses, respectively. The Company recorded CHF 0.2 million in interest expense and foreign currency losses in the period.
For the six months ended June 30, 2021 and 2020, the Company recorded CHF 0.1 million in net financial gains and CHF 0.4 million in net financial losses, respectively. The Company recorded CHF 0.4 million in foreign currency gains compared to CHF 0.4 million in foreign currency losses in the prior period.
11. | Subsequent events |
Asset Purchase and Contribution in Kind Agreement (“Asset Purchase Agreement”)
On July 27, 2021, the Company announced that it is acquiring Affiris AG’s (“Affiris”) portfolio of therapeutics targeting alpha-synuclein (a-syn), notably Affiris PD01, a clinically-validated active vaccine candidate for the treatment of Parkinson’s disease (the “Transferred Assets”).
Pursuant to the Asset Purchase Agreement, AC Immune will acquire the Transferred Assets and USD 5.0 (CHF 4.6) million in cash in exchange for 7,106,840 shares of the Company at closing based on a price of USD 8.26 per common share, for a total value of USD 58.7 (CHF 53.9) million.
The acquisition is subject to customary regulatory approval in Austria and expected to complete at the beginning of Q4 2021.
Convertible Note Agreements
Concurrently with the Asset Purchase Agreement, the Company entered into two separate Convertible Note Agreements with entities affiliated with each of Athos Service GmbH and First Capital Partner GmbH (collectively, the “Investors”), both of which entities are shareholders of Affiris. Each Convertible Note Agreement provides for the sale of an unsecured subordinated Convertible Note of the Company with an aggregate principal amount of USD 12.5 (CHF 11.5) million. The total net proceeds to the Company are USD 25 (CHF 23.0) million.
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The Convertible Notes are convertible into common shares after the Closing Date of the Asset Purchase Agreement at any time at the option of the Investors or of AC Immune at a conversion price of USD 8.26. These options are effective from the signing date of the Convertible Note Agreements until 10 calendar days prior to the Repayment Date (“Conversion Period”). If the Convertible Notes are not converted during the Conversion Period, they shall be repaid on the Repayment Date, which is July 26, 2022. The Convertible Notes do not permit partial settlement and do not bear interest.
In total, the Company is issuing 10.1 million shares in conjunction with the asset acquisition and related financing, in exchange for the aforementioned anti-a-syn assets valued at USD 53.7 (CHF 49.3) million and USD 30.0 (CHF 27.5) million in cash.
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