UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K/A
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of August 2022
Commission File Number: 001-40488
MOLECULAR PARTNERS AG
(Exact name of registrant as specified in its charter)
Wagistrasse 14
8952 Zürich-Schlieren
Switzerland
Telephone: +41 447557700
(Address of registrant’s principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
☒ Form 20-F ☐ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
EXPLANATORY NOTE
This Amendment No. 1 (“Amendment No. 1”) to the Report on Form 6-K originally filed with the U.S. Securities and Exchange on August 25, 2022 (the “Original 6-K”) is being filed solely to provide the Company’s Condensed Consolidated Interim Financial Statements (unaudited) as of and for the six month period ended June 30, 2022 formatted in Inline eXtensible Business Reporting Language (“iXBRL”), in accordance with Rule 405 of Regulation S-T and paragraph C.(6) of the General Instructions to Form 6-K, attached hereto as Exhibit 99.1. Such Condensed Consolidated Interim Financial Statements (unaudited) were previously filed without iXBRL as Exhibit 99.2 to the Original 6-K.
Except as described above, this Amendment No. 1 speaks as of the original filing date of the Original 6-K and does not amend, update or restate any information set forth in the Original 6-K or reflect any events that occurred subsequent to the original filing date of the Original 6-K.
The information contained in this Amendment No. 1, including Exhibits 99.1 and 101, is hereby incorporated by reference into the Company’s Registration Statement on Form F-3 (File No. 333- 265960).
Condensed consolidated interim financial statements (unaudited)
Condensed consolidated interim statement of financial position as of | June 30, 2022 | December 31, 2021 | ||||||||||||
in CHF thousands | Note | |||||||||||||
Assets | ||||||||||||||
Property, plant and equipment | 7,516 | 8,146 | ||||||||||||
Intangible assets | 291 | 331 | ||||||||||||
Total non-current assets | 7,807 | 8,477 | ||||||||||||
Short-term time deposits | 170,124 | 61,000 | ||||||||||||
Other current assets | 3,839 | 5,728 | ||||||||||||
Trade and other receivables | 2,580 | 25,650 | ||||||||||||
Cash and cash equivalents | 114,943 | 71,813 | ||||||||||||
Total current assets | 291,486 | 164,191 | ||||||||||||
Total assets | 299,293 | 172,668 | ||||||||||||
Shareholders' equity and liabilities | ||||||||||||||
Share capital | 5.4 | 3,250 | 3,229 | |||||||||||
Additional paid-in capital | 5.4 | 358,103 | 355,010 | |||||||||||
Cumulative losses | (95,480) | (250,950) | ||||||||||||
Total shareholders' equity | 265,873 | 107,289 | ||||||||||||
Contract liability | 5.3 | 5,400 | 6,925 | |||||||||||
Lease liability | 4,252 | 4,850 | ||||||||||||
Employee benefits | 5.9 | 454 | 6,739 | |||||||||||
Total non-current liabilities | 10,106 | 18,514 | ||||||||||||
Trade and other payables | 5,549 | 7,389 | ||||||||||||
Accrued expenses | 7,558 | 9,975 | ||||||||||||
Contract liability | 5.3 | 9,014 | 28,312 | |||||||||||
Lease liability | 1,193 | 1,189 | ||||||||||||
Total current liabilities | 23,314 | 46,865 | ||||||||||||
Total liabilities | 33,420 | 65,379 | ||||||||||||
Total shareholders' equity and liabilities | 299,293 | 172,668 |
See accompanying notes, which form an integral part of these unaudited condensed consolidated interim financial statements.
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Condensed consolidated interim statement of comprehensive income/loss for the 6 months ended June 30, | 2022 | 2021 | |||||||||
in CHF thousands | Note | ||||||||||
Revenues and other income | |||||||||||
Revenues from research and development collaborations | 5.1 | 184,526 | 4,028 | ||||||||
Other income | 5.2 | 14 | 389 | ||||||||
Total revenues and other income | 184,540 | 4,417 | |||||||||
Operating expenses | |||||||||||
Research and development expenses | (27,043) | (31,581) | |||||||||
Selling, general and administrative expenses | (11,237) | (7,629) | |||||||||
Total operating expenses | (38,280) | (39,210) | |||||||||
Operating result | 146,260 | (34,793) | |||||||||
Financial income | 5.7 | 2,835 | 1,545 | ||||||||
Financial expenses | 5.7 | (490) | (319) | ||||||||
Net finance result | 2,345 | 1,226 | |||||||||
Result before income taxes | 148,605 | (33,567) | |||||||||
Income taxes | 5.8 | — | — | ||||||||
Net result, attributable to shareholders | 148,605 | (33,567) | |||||||||
Other comprehensive result | |||||||||||
Items that will not be reclassified to profit or loss | |||||||||||
Remeasurement of net pension liabilities, net of tax | 5.9 | 6,875 | 6,527 | ||||||||
Items that are or may be reclassified subsequently to profit or loss | |||||||||||
Exchange differences on translating foreign operations | (10) | 3 | |||||||||
Other comprehensive result, net of tax | 6,865 | 6,530 | |||||||||
Total comprehensive result, attributable to shareholders | 155,470 | (27,037) | |||||||||
Basic net result per share (in CHF) | 5.10 | 4.59 | (1.13) | ||||||||
Diluted net result per share (in CHF) | 5.10 | 4.48 | (1.13) |
See accompanying notes, which form an integral part of these unaudited condensed consolidated interim financial statements.
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Condensed consolidated interim cash flow statement for the 6 months ended June 30, | 2022 | 2021 | ||||||
in CHF thousands | ||||||||
Net result attributable to shareholders | 148,605 | (33,567) | ||||||
Adjustments for: | ||||||||
Depreciation and amortization | 1,205 | 1,316 | ||||||
Share-based compensation costs | 2,870 | 1,853 | ||||||
Change in employee benefits | 590 | 590 | ||||||
Financial income | (2,835) | (1,545) | ||||||
Financial expenses | 490 | 319 | ||||||
Changes in working capital: | ||||||||
Change in other current assets | 2,075 | (14,630) | ||||||
Change in trade and other receivables | 23,590 | (5,015) | ||||||
Change in trade and other payables | (1,858) | 4,732 | ||||||
Change in contract liability | (20,822) | (8,175) | ||||||
Change in accrued expenses | (2,568) | 2,028 | ||||||
Exchange gain/(loss) on working capital positions | (17) | (131) | ||||||
Interest paid | (335) | (307) | ||||||
Other financial expense | (5) | (4) | ||||||
Net cash from (used in) operating activities | 150,986 | (52,536) | ||||||
Proceeds from investments in short term time deposits | 42,006 | 20,000 | ||||||
Investments in short term time deposits | (151,131) | (27,699) | ||||||
Acquisition of property, plant and equipment | (426) | (316) | ||||||
Acquisition of intangible assets | (110) | (184) | ||||||
Interest received | 57 | 9 | ||||||
Net cash used in investing activities | (109,604) | (8,190) | ||||||
Proceeds from issuance of new shares, net of transaction costs | — | 52,473 | ||||||
Proceeds from exercise of stock options, net of transaction costs | 244 | 128 | ||||||
Payment of lease liabilities | (593) | (589) | ||||||
Net cash (used in) from financing activities | (349) | 52,012 | ||||||
Exchange gain on cash positions | 2,096 | 1,559 | ||||||
Net increase (decrease) in cash and cash equivalents | 43,130 | (7,155) | ||||||
Cash and cash equivalents at January 1 | 71,813 | 133,721 | ||||||
Cash and cash equivalents at June 30, | 114,943 | 126,566 |
See accompanying notes, which form an integral part of these unaudited condensed consolidated interim financial statements.
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Condensed consolidated interim statement of changes in equity | ||||||||||||||
in CHF thousands | Share capital | Additional paid-in capital | Cumulative losses | Total shareholders' equity | ||||||||||
At January 1, 2021 | 2,915 | 299,479 | (195,174) | 107,220 | ||||||||||
Net result | — | — | (33,567) | (33,567) | ||||||||||
Remeasurement of net pension liabilities | — | — | 6,527 | 6,527 | ||||||||||
Exchange differences on translating foreign operations | — | — | 3 | 3 | ||||||||||
Total comprehensive income | — | — | (27,037) | (27,037) | ||||||||||
Share-based compensation costs (1) | — | 1,853 | — | 1,853 | ||||||||||
Issuance of new shares, net of transaction costs | 300 | 52,173 | — | 52,473 | ||||||||||
Exercise of stock options, net of transaction costs | 12 | 116 | — | 128 | ||||||||||
At June 30, 2021 | 3,227 | 353,621 | (222,210) | 134,638 | ||||||||||
At January 1, 2022 | 3,229 | 355,010 | (250,950) | 107,289 | ||||||||||
Net result | — | — | 148,605 | 148,605 | ||||||||||
Remeasurement of net pension liabilities | — | — | 6,875 | 6,875 | ||||||||||
Exchange differences on translating foreign operations | — | — | (10) | (10) | ||||||||||
Total comprehensive income | — | — | 155,470 | 155,470 | ||||||||||
Share-based compensation costs (1) | — | 2,870 | — | 2,870 | ||||||||||
Exercise of stock options, net of transaction costs | 21 | 223 | — | 244 | ||||||||||
At June 30, 2022 | 3,250 | 358,103 | (95,480) | 265,873 |
(1) See note 5.6
See accompanying notes, which form an integral part of these unaudited condensed consolidated interim financial statements.
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Explanatory notes to the condensed consolidated interim financial statements
1. General Information
Molecular Partners AG ("Company'") and its subsidiary (collectively "Molecular Partners" or, "Group") is a clinical stage biopharmaceutical company focusing on the discovery, development and commercialization of DARPins, a novel class of therapeutic proteins. DARPins combine the specificity and selectivity of monoclonal antibodies with many properties of small molecules, enabling new therapeutic approaches. The Company was founded on November 22, 2004, and is domiciled at Wagistrasse 14, 8952 Schlieren, Canton of Zurich, Switzerland. It is subject to the provisions of the articles of association and to article 620 et seq. of the Swiss Code of Obligations, which describe the legal requirements for limited companies (“Aktiengesellschaften”).
Molecular Partners Inc. is a wholly owned subsidiary of Molecular Partners AG. Molecular Partners Inc. was incorporated in the United States in the State of Delaware on October 8, 2018. Molecular Partners Inc. is based in Cambridge, Massachusetts.
The unaudited condensed consolidated interim financial statements for the six months ended June 30, 2022 were approved for issuance by the Board of Directors on August 24, 2022.
The Company’s shares are listed on the SIX Swiss Exchange (Ticker: MOLN) since November 5, 2014 and on the Nasdaq Global Select Market (Ticker: MOLN) since June 16, 2021.
2. Basis of Preparation
These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended December 31, 2021. They do not include all the information required for a complete set of consolidated financial statements prepared in accordance with IFRS as issued by the IASB. However, selected explanatory notes are included to explain events and transactions that are significant to gain an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended December 31, 2021.
The accounting policies set forth in the notes to those annual consolidated financial statements have been consistently applied to all periods presented, except as per below.
The condensed consolidated interim financial statements are presented in thousands of Swiss Francs (TCHF), unless stated otherwise.
The Group is monitoring the situation surrounding the COVID-19 pandemic and its potential impact on patients, the team, the partners and the business. During the six month period ended June 30, 2022 and as of the reporting date there were no major disruptions to the Group's operations as a result of the COVID-19 pandemic.. The Group continues to comply with all local and federal instructions as it relates to the safety of our employees, patients and citizens.
The business is not subject to any seasonality. Revenues largely depend on the underlying alliance contracts and the achievement of agreed milestones, while expenses are largely affected by the phase of the respective projects, particularly with regard to external research and development expenditures.
Due to rounding, the numbers presented in the financial statements might not precisely equal the accompanying notes.
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3. New or Revised IFRS Standards and Interpretations
A number of new or amended standards became applicable for annual periods beginning on or after January 1, 2022. These standards did not have any significant impact on the Group’s accounting policies and did not require any retrospective adjustments.
4. Critical Accounting estimates and judgment
The condensed consolidated interim financial statements have been prepared under the historical cost convention. In preparing these condensed consolidated interim financial statements management made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
5. Other explanatory notes
5.1 Revenue
On January 7, 2022, Novartis informed the Group of its intention to exercise the option under the October 2020 Option and Equity Rights Agreement . This was followed by the signing of a License agreement between the two parties on January 17, 2022. The License Agreement resulted in the Group becoming eligible to receive CHF 150 million for the option exercise payment and in addition the Group was allowed to charge Novartis CHF 13.1 million for items related to the commercial supply of ensovibep and drug substance secured by the Group. Both amounts were recognized as revenue during the first three months of 2022. At the signing of the License Agreement in January 2022, the Group also assigned the Reservation Agreement with the FOPH (from August 2020 and as amended in December 2021) to Novartis. This assignment allowed the Group to also recognize into revenue, the reservation fee of CHF 7 million received from the FOPH in August 2020.
On December 14, 2021, the Group announced entering into a License and Collaboration Agreement with Novartis to develop DARPin-conjugated radioligand therapeutic candidates for oncology. The Group is able to recharge Novartis its employee related expenses associated with the research activities. During the six months ended June 30, 2022 the Group recognized as revenue an amount of TCHF 626 in relation to this recharge. As part of the same agreement, the Group received in January 2022 the upfront fee of USD 20 million (CHF 18.6 million). Revenue related to the upfront payment is recognized over time in line with the progress made over the duration of the contractually agreed three year research plan. Progress towards completion of the research plan is based on the input method and is measured by employee hours worked on the related research activities as specified in the agreement relative to the total estimated hours to be incurred. During the six months ended June 30, 2022, the Group recognized into revenue an amount of TCHF 4,170 related to this upfront payment.
On April 26, 2022 the Group announced that Amgen, its collaboration partner for MP0310 (AMG 506), had informed the Group of their decision to return the global rights of MP0310 following a strategic pipeline review. With no remaining performance obligations under the agreement, the Group, in the second quarter of 2022 recognized the remaining balance of the Amgen contract liability of TCHF 8,849 into revenue for a total amount reported in the first six months of 2022 of TCHF 9,653.
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Revenues in the table below are attributable to individual countries and are based on the location of the Group’s collaboration partners.
Revenues by country | ||||||||
in TCHF, for the six months ended June 30 | 2022 | 2021 | ||||||
Revenues Switzerland | 174,873 | — | ||||||
Revenues USA | 9,653 | 4,028 | ||||||
Total revenues | 184,526 | 4,028 |
Analysis of revenue by major collaboration partner | ||||||||
in TCHF, for the six months ended June 30 | 2022 | 2021 | ||||||
Novartis AG, Switzerland | 167,873 | — | ||||||
FOPH, Switzerland | 7,000 | — | ||||||
Amgen Inc., USA | 9,653 | 4,028 | ||||||
Total revenues | 184,526 | 4,028 |
5.2 Other income
In the first quarter of 2021 the Group entered into an agreement with Novartis to facilitate manufacturing of MP0420 drug supply at a third party supplier. The related agency services during the six months ended June 30, 2022 amounted to TCHF 14 (six months ended June 30, 2021: TCHF 389) and are presented as other income in the condensed consolidated interim statement of comprehensive income.
5.3 Contract liability
The table below presents the movement in the Group's contract liabilities during the six months ended June 30, 2022:
in CHF thousands | Contract liability at December 31, 2021 | Recognized as revenue | Contract liability at June 30, 2022 | ||||||||||||||
Amgen | 9,653 | (9,653) | — | ||||||||||||||
Novartis | 18,584 | (4,170) | 14,414 | ||||||||||||||
FOPH | 7,000 | (7,000) | — | ||||||||||||||
Total | 35,237 | (20,823) | 14,414 |
in CHF thousands | Current | Non-current | Contract liability | ||||||||
Novartis | 9,014 | 5,400 | 14,414 | ||||||||
Balance at June 30, 2022 | 9,014 | 5,400 | 14,414 |
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5.4 Issuances of equity securities
As of June 30, 2022, as a result of the exercise of employee stock options and the vesting of Performance Share Units ("PSUs" ) the outstanding issued share capital of the Company increased to CHF 3,250,232 divided into 32,502,323 fully paid registered shares.
5.5 Dividends
The Group has paid no dividends since its inception and does not anticipate paying dividends in the foreseeable future.
5.6 Share-based compensation
As of June 30, 2022, 285,925 options were outstanding (December 31, 2021: 318,902 options) under all active option plans. As of June 30, 2022, and December 31, 2021 all outstanding options were fully vested.
As of June 30, 2022, a total of 680,559 PSUs and 96,001 Restricted Stock Units ("RSUs") were outstanding, of which none were vested (as of December 31, 2021 a total of 547,485 PSUs and 95,635 RSUs were outstanding, of which also none were vested). The changes in the number of share-based awards (options, RSUs and PSUs) outstanding during the six month period ended June 30, 2022, is as follows:
Share options / PSU/ RSU movements | Total numbers | Weighted average exercise price (CHF) | Options (numbers) | Weighted average exercise price (CHF) | PSU / RSU (numbers) | Weighted average exercise price (CHF) | ||||||||||||||
Balance outstanding at January 1, 2022 | 962,022 | 2.35 | 318,902 | 6.87 | 643,120 | 0.10 | ||||||||||||||
Granted | 321,366 | 0.10 | — | — | 321,366 | 0.10 | ||||||||||||||
(Performance adjustment)1 | — | 0.10 | — | — | 0.10 | |||||||||||||||
(Forfeited)2 | (11,228) | 0.10 | — | — | (11,228) | 0.10 | ||||||||||||||
(Expired) | — | — | — | — | — | — | ||||||||||||||
(Exercised options), vested PSU / RSU | (209,675) | 1.18 | (32,977) | 6.94 | (176,698) | 0.10 | ||||||||||||||
Balance outstanding at June 30, 2022 | 1,062,485 | 1.92 | 285,925 | 6.87 | 776,560 | 0.10 |
1Performance adjustments indicate forfeitures due to non-market performance conditions not achieved
2Forfeited due to service conditions not fulfilled
The share-based compensation costs recognized during the six months ended June 30, 2022, amounted to TCHF 2,870 (TCHF 1,853 for the six months ended June 30, 2021).
5.7 Financial income and expense
Financial income
in CHF thousands, for the six months ended June 30 | 2022 | 2021 | ||||||
Interest income on financial assets held at amortized cost | 244 | 17 | ||||||
Net foreign exchange gain | 2,591 | 1,528 | ||||||
Total | 2,835 | 1,545 |
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Financial expense
in CHF thousands, for the six months ended June 30 | 2022 | 2021 | ||||||
Negative interest on financial assets held at amortized costs | (462) | (288) | ||||||
Interest expense on leases | (23) | (27) | ||||||
Other financial expenses | (5) | (4) | ||||||
Total | (490) | (319) |
Exchange results primarily represent unrealized foreign exchange results on the cash and short-term time deposit balances held in USD, EUR and in GBP, respectively.
5.8 Income taxes
The Group has in recent years reported operating losses that resulted in a tax loss carry-forward in Switzerland of TCHF 212,218 as of December 31, 2021.
In the six months period, the Group generated taxable income primarily as a result of the revenue generated from the exercise of the Option and Equity Rights Agreement by Novartis followed by the signing of a license agreement (note 5.1). Income tax expense has been calculated for the period ended on June 30, 2022, based on the Group's best estimate of the effective income tax rate expected for the full financial year, being 0% on June 30, 2022, given that the taxable income is anticipated to be offset by the utilization of the Company's tax losses.
Given its past history of operating losses and no tax profitability in prior periods,the Group did not recognize any deferred tax assets in relation to its tax losses and other tax deductible temporary differences.
5.9 Other comprehensive result
In order to recognize remeasurements of the net defined benefit obligation in the period in which they arise, the Group utilizes its independent actuaries to update the calculation of the defined benefit obligation and plan assets at each reporting date. The primary component of the remeasurement as of and for the six months period ended June 30, 2022, relates to the increase in the discount rate by 185 basis points relative to December 31, 2021.
5.10 Earnings per share
Basic net result per share is calculated by dividing the net result attributable to shareholders by the weighted average number of shares issued and outstanding during the interim periods presented, excluding any shares held as own shares. Diluted net result per share additionally takes into account the potential conversion of all dilutive potential ordinary shares.
for the six months ended June 30 | 2022 | 2021 | ||||||
Weighted average number of shares used in computing basic earnings per share | 32,409,491 | 29,705,254 | ||||||
Weighted average number of shares used in computing diluted earnings per share | 33,176,481 | 29,705,254 |
At June 30, 2022, the number of shares that are dilutive is 766,990.
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5.11 Related parties
The Group did not enter into any related party transactions in the interim periods presented.
5.12 Putative Class Action
On July 12, 2022, a putative class action complaint was filed in the U.S. District Court for the Southern District of New York against the Company, its directors, and certain of its executive officers. The complaint alleges that the defendants violated federal securities laws by, among other things, making misrepresentations and omissions regarding its product candidates ensovibep and MP0310 or acting as control persons with respect to such conduct. The complaint seeks unspecified compensatory damages, as well as an award of reasonable attorneys’ fees and other costs, on behalf of plaintiff and all other persons and entities which purchased (a) the Company's American Depositary Shares (ADSs )pursuant to certain offering documents issued in connection with the Company's initial public offering of ADSs; and/or (b) our securities between June 16, 2021 and April 26, 2022 inclusive. The matter remains in its early stages. The Company disputes these claims and intends to defend the matter accordingly.
5.13 Events after the balance sheet date
No events occurred between the balance sheet date and the date on which these condensed consolidated interim financial statements were approved by the Audit and Finance Committee that would require adjustment to these condensed consolidated interim financial statements or disclosure under this section.
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Exhibit | ||||||||
99.1 | ||||||||
101 | The following materials from this Report on Form 6-K/A are formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Interim Statement of Financial Position as of June 30, 2022 and December 31, 2021 (unaudited); (ii) Condensed Consolidated Interim Statement of Comprehensive Income/Loss for the Six Months Ended June 30, 2022 and 2021 (unaudited); (iii) Condensed Consolidated Interim Cash Flow Statement for the Six Months Ended June 30, 2022 and 2021 (unaudited); (iv) Condensed Consolidated Interim Statement of Changes in Equity for the Six Months Ended June 30, 2022 and 2021 (unaudited); and (v) Notes to the Condensed Consolidated Interim Financial Statements (unaudited). | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Molecular Partners AG | |||||||||||||||||||||||
(Registrant) | |||||||||||||||||||||||
Date: August 31, 2022 | /s/ PATRICK AMSTUTZ | ||||||||||||||||||||||
Name: | Patrick Amstutz | ||||||||||||||||||||||
Title: | Chief Executive Officer |
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