0001193125-22-208808.txt : 20220801 0001193125-22-208808.hdr.sgml : 20220801 20220801164931 ACCESSION NUMBER: 0001193125-22-208808 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 73 CONFORMED PERIOD OF REPORT: 20220630 FILED AS OF DATE: 20220801 DATE AS OF CHANGE: 20220801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DBV Technologies S.A. CENTRAL INDEX KEY: 0001613780 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 000000000 STATE OF INCORPORATION: I0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-36697 FILM NUMBER: 221125481 BUSINESS ADDRESS: STREET 1: 177-181 AVENUE PIERRE BROSSOLETTE CITY: MONTROUGE STATE: I0 ZIP: 92120 BUSINESS PHONE: 33(0)155427878 MAIL ADDRESS: STREET 1: 177-181 AVENUE PIERRE BROSSOLETTE CITY: MONTROUGE STATE: I0 ZIP: 92120 10-Q 1 d243373d10q.htm 10-Q 10-Q
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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 June 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)
 
Name of each exchange
on which registered
American Depositary Shares, each representing
one-half
of one ordinary share, nominal value €0.10 per share
 
DBVT
 
The Nasdaq Stock Market LLC
Ordinary shares, nominal value €0.10 per 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            ☐  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            ☐  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    ☒  No

As of August 1
st
, 2022, the registrant had 94,025,192
 
ordinary shares, nominal value €0.10 per share, outstanding including treasury shares.
 
 
 

Table of contents
 
Part I
  Financial information      3  
Item 1
  Condensed Consolidated Statements of Financial Position (Unaudited) as of June 30, 2022 and December 31, 2021      3  
  Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the Three and Six Months Ended June 30, 2022 and 2021      4  
  Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2022 and 2021      5  
  Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) for the Six Months Ended June 30, 2022 and 2021      6  
  Notes to the Condensed Consolidated Financial Statements (Unaudited)      7  
Item 2
  Management’s Discussion and Analysis of Financial Condition and Results of Operations      19  
Item 3
  Quantitative and Qualitative Disclosures About Market Risk      28  
Item 4
  Controls and Procedures      29  
Part II
       30  
Item 1
  Legal Proceedings      30  
Item 1A
  Risk Factors      30  
Item 2
  Unregistered Sales of Equity Securities and Use of Proceeds      30  
Item 3
  Defaults Upon Senior Securities      31  
Item 4
  Mine Safety Disclosures      31  
Item 5
       31  
Item 6
       32  
Unless the context otherwise requires, we use the terms “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
”, “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 Quarterly Report are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Quarterly Report 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.

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS.
This 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 Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or 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 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;
 
   
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;
 
   
our financial performance; and
 
   
other risks and uncertainties, including those listed under the caption “Risk Factors.”
 
1

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

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)
 
         
June 30,
   
December 31,
 
    
Note
  
2022
   
2021
 
Assets
                     
Current assets:
                     
Cash and cash equivalents
  
3
   $ 247,971     $ 77,301  
Other current assets
  
4
     11,981       37,085  
         
 
 
   
 
 
 
Total current assets
       
 
259,953
 
 
 
114,386
 
Property, plant, and equipment, net
          15,677       18,146  
Right-of-use
assets related to operating leases
  
5
     3,146       7,336  
Intangible assets
          14       22  
Other non-current assets
          6,189       6,833  
         
 
 
   
 
 
 
Total non-current assets
       
 
25,025
 
 
 
32,338
 
         
 
 
   
 
 
 
Total Assets
       
$
284,978
 
 
$
146,723
 
         
 
 
   
 
 
 
Liabilities and shareholders’ equity
                     
Current liabilities:
                     
Trade payables
  
6
   $ 16,341     $ 11,429  
Short-term operating leases
  
5
     1,968       3,003  
Short-term financial debt
          156       510  
Current contingencies
  
9
     3,189       4,095  
Other current liabilities
  
6
     8,778       12,361  
         
 
 
   
 
 
 
Total current liabilities
       
 
30,431
 
 
 
31,397
 
         
 
 
   
 
 
 
Long-term operating leases
  
5
     1,945       7,147  
Non-current contingencies
  
9
     6,421       6,758  
Other non-current liabilities
  
6
     1,764       2,147  
         
 
 
   
 
 
 
Total non-current liabilities
       
 
10,130
 
 
 
16,052
 
         
 
 
   
 
 
 
Total Liabilities
       
$
40,562
 
 
$
47,449
 
         
 
 
   
 
 
 
Shareholders’ equity:
                     
Ordinary shares, €0.10 par value; 94,022,679 and 55,095,762 shares authorized, and issued as at June 30, 2022 and December 31, 2021, respectively
        $ 10,708     $ 6,538  
Additional paid-in capital
          456,447       358,115  
Treasury stock, 106,287 and 153,631 ordinary shares as of June 30, 2022 and December 31, 2021, respectively, at cost
          (953     (1,232
Accumulated deficit
          (203,050     (258,528
Accumulated other comprehensive income
          743       519  
Accumulated currency translation effect
          (19,480     (6,137
         
 
 
   
 
 
 
Total Shareholders’ equity
  
7
  
$
244,416
 
 
$
99,274
 
         
 
 
   
 
 
 
Total Liabilities and Shareholders’ equity
       
$
284,978
 
 
$
146,723
 
         
 
 
   
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
3

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 June 30,
   
Six Months Ended 
June 30,
 
    
Note
  
2022
   
2021
   
2022
   
2021
 
Operating income
  
10
  
$
1,529
 
 
$
(1,488
 
$
4,074
 
 
$
1,453
 
Operating expenses
                                     
Research and development expenses
          (18,611     (20,179     (30,834     (42,343
Sales and marketing expenses
          (1,037     (1,198     (1,500     (1,927
General and administrative expenses
          (5,704     (8,269     (12,334     (17,951
         
 
 
   
 
 
   
 
 
   
 
 
 
Total Operating expenses
       
 
(25,352
 
 
(29,646
 
 
(44,669
 
 
(62,221
         
 
 
   
 
 
   
 
 
   
 
 
 
Loss from operations
       
 
(23,823
 
 
(31,134
 
 
(40,595
 
 
(60,768
         
 
 
   
 
 
   
 
 
   
 
 
 
Financial income
          784       46       936       261  
         
 
 
   
 
 
   
 
 
   
 
 
 
Loss before taxes
       
 
(23,039
 
 
(31,088
 
 
(39,659
 
 
(60,507
         
 
 
   
 
 
   
 
 
   
 
 
 
Income tax
                   434       (87     404  
         
 
 
   
 
 
   
 
 
   
 
 
 
Net loss
       
$
(23,039
 
$
(30,654
 
$
(39,746
 
$
(60,103
         
 
 
   
 
 
   
 
 
   
 
 
 
Foreign currency translation differences, net of taxes
          (11,394     2,788       (13,327     (5,956
Actuarial gains (losses) on employee benefits, net of taxes
          200       48       224       (38
         
 
 
   
 
 
   
 
 
   
 
 
 
Total comprehensive loss
       
$
(34,234
 
$
(27,818
 
$
(52,849
 
$
(66,097
         
 
 
   
 
 
   
 
 
   
 
 
 
Basic/diluted net loss per share attributable to shareholders
  
14
  
$
(0.35
 
$
(0.56
 
$
(0.66
 
$
(1.09
Weighted average shares outstanding used in computing per share amounts:
          66,047,949       54,904,764       60,490,075       54,892,794  
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
4

DBV Technologies S.A.
Condensed Consolidated Statements of Cash Flows (unaudited)
(amounts in thousands)
 
         
Six Months 
Ended June 30,
 
    
Notes
  
2022
   
2021
 
Net loss for the period
       
$
(39,746
 
$
(60,103
Adjustments to reconcile net loss to net cash used in operating activities:
                
Depreciation, amortization and accrued contingencies
          1,249       8,619  
Retirement pension obligations
          14       57  
Expenses related to share-based payments
  
8
     2,441       2,527  
Other elements
          (3     (843
Changes in operating assets and liabilities:
                     
Decrease (increase) in trade receivables
                   2,175  
Decrease (increase) in other current assets
          23,436       (8,393
(Decrease) increase in trade payables
          5,894       (3,165
(Decrease) increase in other current and
non-current
liabilities
          (3,040     (6,608
Change in operating lease liabilities and right of use assets
          (1,979     (769
Net cash flow used in operating activities
       
 
(11,733
 
 
(66,503
         
 
 
   
 
 
 
Cash flows used in investing activities:
                     
Acquisitions of property, plant, and equipment, net from proceeds
          (369     (13
Proceeds from property, plant, and equipment dispositions
          3           
Acquisitions of non-current financial assets
          (279         
Proceeds from
non-current
financial assets
          426           
         
 
 
   
 
 
 
Net cash flows used in investing activities
       
 
(218
 
 
(13
         
 
 
   
 
 
 
Cash flows provided by financing activities:
                     
Decrease in conditional advances
          (328     (345
Treasury shares
          279       638  
Capital increases, net of transaction costs
          195,270       794  
Other cash flows related to financing activities
                   (17
         
 
 
   
 
 
 
Net cash flows provided by financing activities
       
 
195,221
 
 
 
1,071
 
         
 
 
   
 
 
 
Effect of exchange rate changes on cash and cash equivalents
          (12,600     (5,423
         
 
 
   
 
 
 
Net increase (decrease) in cash and cash equivalents
       
 
170,670
 
 
 
(70,868
         
 
 
   
 
 
 
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
  
$
247,971
 
 
$
125,484
 
         
 
 
   
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
5

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
 
Net (loss)
     —          —          —         —         (30,654     —         —         (30,654
Other comprehensive income
     —          —          —         —         —         48       2,788       2,836  
Issuance of ordinary shares
     75,000        9        464       —         —         —         —         473  
Insuance 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
 
 
    
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
Insuance 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
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
6

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
. The Company’s therapeutic approach is based on epicutaneous immunotherapy, or EPIT
, a proprietary method of delivering biologically active compounds to the immune system through intact skin using 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 U.S. 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 at 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
assets related to leases and property, plant and equipment, (5) recoverability of the Company’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.
Accounting Pronouncements adopted in 2022
The Company has not adopted 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.

 
7

Note 2: Significant Events and Transactions
Clinical programs
Viaskin
TM
Peanut for children ages
4-11
in the United States
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 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 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 Patches
.
Based on the January 2021 FDA feedback, the Company defined three parallel workstreams:
 
  1.
Identify a modified Viaskin patch (which the Company calls mVP).
 
  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.
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 intend 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;
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 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.
After careful review of the FDA’s information requests, 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 letter. The Company estimated that the FDA’s newly proposed stepwise 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, the Company announced its plan to initiate a pivotal Phase III 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). The 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 confirmed the Company’s change in strategy is agreeable via oral and written exchanges.
 
8

The new Phase 3 pivotal study for modified Viaskin Peanut has been named VITESSE (Viaskin Peanut Immunotherapy Trial to Evaluate Safety, Simplicity and Efficacy), which means “speed” in French.
In May 2022, the 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 as part of the the Type C meeting briefing package.
 
DBV continues to engage in productive dialogue with the FDA on the key elements of the VITESSE protocol. As previously disclosed, the Company will communicate key elements of the VITESSE trial design and projected timelines once this process has concluded.
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 has 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.
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 European Central Bank on May 4, 2022) and each ADS giving the right to receive
one-half
of one ordinary share of the Company).
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 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.
The 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. The Company has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the ordinary shares, including the ordinary shares underlying
the pre-funded warrants.
 

9

Following the financing operations carried out in the first half of 2022, the Company has cash and cash equivalent to support the Company’s operations several months beyond the projected completion of VITESSE, the planned Phase 3 clinical study of the modified Viaskin
Peanut patch in peanut allergic children ages 4 years and older.
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 June 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 according to the function or nature of the income or expense.

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 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 Court indicated that the Third Amended Complaint was deficient in a number of ways, failing to allege a violation of the Securities Exchange Act of 1934, and ordered the matter closed. Per court procedural rules, the Plaintiffs have 30 days to appeal the dismissal of the Third Amended.
The Company believes that the allegations contained in the amended complaint are without merit and will continue to defend the case vigorously. The Company believes this complaint will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.
Note 3: Cash and Cash Equivalents
The following tables summarize the cash and cash equivalents as of June 30, 2022 and December 31, 2021:
 
    
June 30,
    
December 31,
 
    
2022
    
2021
 
Cash
     226,674        31,427  
Cash equivalents
     21,298        45,874  
    
 
 
    
 
 
 
Total cash and cash equivalents as reported in the statements of financial position
  
 
247,971
 
  
 
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.

10

Note 4 Other Current Assets
Other current assets consisted of the following:
 
    
June 30,
    
December 31,
 
    
2022
    
2021
 
Research tax credit
     2,908        28,092  
Other tax claims
     4,339        3,561  
Prepaid expenses
     3,773        4,149  
Other receivables
     961        1,283  
    
 
 
    
 
 
 
Total
  
 
11,981
 
  
 
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 six months period ended June 30, 2022, the Company received the reimbursement of the 2019, 2020 and 2021 fiscal year research tax credit.
 

The variance in Research Tax Credit is presented as follows:
 
    
Amount in
thousands of US
Dollars
 
Opening research tax credit receivable as of January 1, 2022
     28,092  
+ Operating revenue
     3,060  
- Payment received
     (27,119
- Adjustment and currency translation effect
     (1,125
    
 
 
 
Closing research tax credit receivable as of June 30, 2022
  
 
2,908
 
    
 
 
 
Of
which -
 
Non
-current
portion
  
 
  
 
Of
which - Current
 
portion
  
 
2,908
 
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 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.

11

Note 5 Lease contracts
Future minimum lease payments under the Company’s operating leases’ right of use as of June 30, 2022 and December 31, 2021, are as follows:
 
    
June 30, 2022
   
December 31, 2021
 
    
Real estate
   
Other

assets
   
Total
   
Real estate
   
Other
assets
   
Total
 
Current portion
     2,104       50       2,154       3,361       77       3,438  
Year 2
     1,843       19       1,862       3,124       23       3,147  
Year 3
     284       11       295       2,299       18       2,317  
Year 4
     —         —         —         771       1       773  
Year 5
     —         —         —         790       —         790  
Thereafter
     —         —         —         1,220       —         1,220  
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total minimum lease payments
  
 
4,231
 
 
 
80
 
 
 
4,311
 
 
 
11,565
 
 
 
119
 
 
 
11,684
 
Less: Effects of discounting
     (363     (6     (370     (1,526     (8     (1,534
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Present value of operating lease
  
 
3,868
 
 
 
73
 
 
 
3,941
 
 
 
10,039
 
 
 
111
 
 
 
10,150
 
Less: current portion
     (1,922     (46     (1,968     (2,929     (74     (3,003
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Long-term operating lease
  
 
1,946
 
 
 
27
 
 
 
1,973
 
 
 
7,110
 
 
 
37
 
 
 
7,147
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Weighted average remaining lease term (years)
     1.79       —                 4.14       2.01          
Weighted average discount rate
     3.14     1.29             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 consolidated statement of operations and comprehensive loss was:
 
 
 
June 30,

 
 
    
2022
 
2021
 
 
Operating lease expense
     950
 
 
1,698
 
 
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 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 will be recorded starting April 1, 2022 for a gross amount of 0.4 million.

Supplemental cash flow information related to operating leases is as follows for the period June 30, 2022 and 2021:
 
 
 
June 30,

 
    
2022
 
2021
 
Cash paid for amounts included in the measurement of lease liabilities
     —  
 
 
Operating cash flows from operating leases
     1,079  
2,077
 

12

Note 6: 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.
6.2 Other Liabilities
The following tables summarize the other liabilities as of June 30, 2022 and December 31, 2021:
 
 
 
  
June 30,
 
  
December 31,
 
 
  
2022
 
  
2021
 
 
  
Other current
liabilities
 
  
Other non-current

liabilities
 
  
Total
 
  
Other current
liabilities
 
  
Other non-current

liabilities
 
  
Total
 
Employee related liabilities
    
4,135
      
77
       4,212        6,708        247        6,954  
Deferred income
    
3,012
      
1,687
       4,700        4,146        1,900        6,046  
Tax liabilities
    
400
                 400        182                  182  
Other debts
    
1,231
                 1,231        1,325                  1,325  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Total
  
 
8,778
 
  
 
1,764
 
  
 
10,542
 
  
 
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 $4.7 million as of June 30, 2022.
Note 7: Shareholders’ equity
The share capital as of June 30, 2022 is set at the sum of €9,402,268 ($10,708,445 converted at historical rates). It is divided into 94,022,679 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 Issuance 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;
 
 
granted a number of authorizations for the purpose of carrying out the Issuance;
 
   
s
u
b-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
 
13

 
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 Issu
e
.
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 June 30, 2022
  
 
28,276,331
 
    
 
 
 
Note 8: Share-Based Payments
The Board of Directors has been authorized by the SH General Meeting to grant restricted stock units (“RSU”), stock options plan (“SO”), employee warrants (
Bons de Souscription de Parts de Créateur d’Entreprise
or “BSPCE”) and
non-employee
warrants (
Bons de Souscription d’Actions
or “BSA”).
During the six months ended June 30, 2022, the Company granted 19,000 stock options and 3,200 restricted 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 13 to the consolidated financial statements included in the Annual Report.
 
1
4

Stock option fair value assumptions during the six months ended June 30, 2022
 
Weighted average share price at grant date in €
     2.42  
Weighted average expected volatility
     92.4
Weighted average risk-free interest rate
     0.86
Weighted average expected term (in years)
     6  
Dividend yield
         
Weighted average fair value of stock options in €
     1.81  
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
     —          19,000        3,200  
Forfeited during the period
     —          (205,728      (66,588
Exercised/released during the period
               (2,125      (31,910
Expired during the period
     —          —              
    
 
 
    
 
 
    
 
 
 
Balance as of June 30, 2022
  
 
256,693
 
  
 
3,442,358
 
  
 
1,145,223
 
    
 
 
    
 
 
    
 
 
 
Share-based payments expenses reflected in the condensed consolidated statements of o
p
erations is as follow
s
:
 
           
Three Months
Ended June 30,
   
Six Months
Ended June 30,
 
 
  
 
 
  
2022
 
 
2021
 
 
2022
 
 
2021
 
Research & development
     SO        (290     (302     (665     (678
       RSU        (185     115       (393     (136
Sales & marketing
     SO        (38     (63     (33     (112
       RSU        (17     (26     (16     (48
General & administrative
     SO        (478     (709     (1,176     (1,353
       RSU        (70     (110     (157     (201
             
 
 
   
 
 
   
 
 
   
 
 
 
Total share-based compensation (expens
e
)
           
 
(1,078
 
 
(1,094
 
 
(2,441
 
 
(2,527
             
 
 
   
 
 
   
 
 
   
 
 
 
Note 9: Contingencies
The following tables summarize the contingencies as of June 30, 2022 and December 31, 2021:
 
                 
    
June 30,
    
December 31,
 
    
2022
    
2021
 
Current contingencies
     3,189        4,095  
Non-current contingencies
     6,421        6,758  
    
 
 
    
 
 
 
Total contingencies
  
 
9,610
 
  
 
10,853
 
    
 
 
    
 
 
 
15

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
     14                         14  
Used liabilities
     —         (108     (44     (152
Reversals of unused liabilities
              —         —             
Net interest related to employee benefits, and unwinding of discount
     —         —         —             
Actuarial gains and losses on defined-benefit plans
     (224     —         —         (224
Currency translation effect
     (73     (807     (2     (882
    
 
 
   
 
 
   
 
 
   
 
 
 
At June 30, 2022
  
 
725
 
 
 
8,885
 
 
 
  
 
 
 
9,610
 
    
 
 
   
 
 
   
 
 
   
 
 
 
Of which Current
     —        
3,189
      —        
3,189
 
Of which
Non-current
    
725
     
5,696
      —        
6,421
 
In 2021 and during the first six 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 10: Operating income
The following table summarizes the operating income during the three and six months ended June 30, 2022 and 2021:
 
                                 
    
Three Months Ended
June 30,
    
Six Months Ended
June 30,
 
    
2022
    
2021
    
2022
    
2021
 
Research tax credit
     1,491        1,870        3,060        3,677  
Other operating income
     37        (3,358      1,014        (2,225
    
 
 
    
 
 
    
 
 
    
 
 
 
Total
  
 
1,529
 
  
 
(1,488
  
 
4,074
 
  
 
1,453
 
    
 
 
    
 
 
    
 
 
    
 
 
 
As of June 30, 2022, the Company recorded its collaboration agreement’s revenue based on its updated measurement of progress of the Phase II clinical trial conducted as part of the agreement. The accrual recorded in the amount of the difference between the Company’s current best estimates of costs yet to be incurred and revenues yet to be recognized for the completion of the Phase II clinical trial has been updated accordingly.
Note 11: Allocation of Personnel Expenses
The Company had an average of 87 employees during the six months ended June 30, 2022, in comparison with an average of 111 employees during the six months ended June 30, 2021.
 
1
6

The following table summarizes the allocation of personnel expenses by function during the three and six months ended June 30, 2022 and 2021:

 
                                 
 
  
Three Months
Ended June 30,
 
  
Six Months

Ended June 30,
 
 
  
2022
 
  
2021
 
  
2022
 
  
2021
 
                                 
Research and Development expenses
     3,097        3,393        6,172        8,111  
Sales and Marketing expenses
     344        518        589        1,036  
General and Administrative expenses
     2,767        2,999        5,362        6,765  
    
 
 
    
 
 
    
 
 
    
 
 
 
Total personnel expenses
  
 
6,208
 
  
 
6,910
 
  
 
12,123
 
  
 
15,912
 
    
 
 
    
 
 
    
 
 
    
 
 
 
The following table summarizes the allocation of personnel expenses by nature during the three six months ended June 30, 2022 and 2021:

                                 
 
  
Three Months
Ended June 30,
 
  
Six Months

Ended June 30,
 
 
  
2022
 
  
2021
 
  
2022
 
  
2021
 
                                 
Wages and salaries
     3,509        4,382        7,497        8,836  
Social security contributions
     1,256        1,064        1,507        2,396  
Expenses for pension commitments
     211        293        509        695  
Employer contribution to bonus shares
     154        77        170        1,458  
Share-based payments
     1,078        1,094        2,441        2,527  
    
 
 
    
 
 
    
 
 
    
 
 
 
Total
  
 
6,208
 
  
 
6,910
 
  
 
12,123
 
  
 
15,912
 
    
 
 
    
 
 
    
 
 
    
 
 
 
The decrease in personnel expenses is mainly due to a decrease in headcount following the full implementation of the new organization.
Note 12: Commitments
There have been no significant changes in other commitments from those disclosed in Note 18 to the consolidated financial statements included in the Annual Report.
Note 13: 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 June 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 no 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.
Note 14: 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 six month periods ended June 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.
 
1
7

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 June 30, 2022 and 2021 indicated in number of potential shares:
 

 
  
Three Months Ended

June 30,
 
  
Six Months Ended

June 30,
 
 
  
2022
 
  
2021
 
  
2022
 
  
2021
 
Non-employee warrants
     256,693        256,693        256,693        256,693  
Stock options
     3,442,358        2,594,410        3,442,358        2,594,410  
Restricted stock units
     1,145,223        1,092,445        1,145,223        1,092,445  
Prefunded warrants
     28,276,331                  28,276,331            
Note 15: Events after the Close of the Period
As previously disclosed, a class action complaint was filed in January 2019 in the U.S. District Court, District of New Jersey, alleging that the Company and certain current and former executive officers violated certain U.S. federal securities laws. Plaintiffs filed a Third Amended Complaint on September 30, 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 Court indicated that the Third Amended Complaint was deficient in a number of ways, failing to allege a violation of the Securities Exchange Act of 1934, and ordered the matter closed. Per court procedural rules, the Plaintiffs have 30 days to appeal the dismissal of the Third Amended Complaint. The Company believes that the allegations contained in the complaint are without merit and will continue to defend the case vigorously. The Company evaluated no other subsequent events that occurred after June 30, 2022, through the date the condensed consolidated financial statements were issued after their approval by the Board of Directors on July 29, 2022 and determined that there are no significant events that require adjustments or disclosure in such condensed consolidated financial statements.
 
1
8

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 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.
Viaskin
TM
Peanut for children ages
4-11
in the United States
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 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 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 Patches
Based on the January 2021 FDA feedback, the Company defined three parallel workstreams:
 
  4.
Identify a modified Viaskin patch (which the Company calls mVP).
 
  5.
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.
 
  6.
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:
 
  c.
PREQUAL, a Phase I study with adult healthy volunteers to optimize the allergen sample collection methodologies and validate the assays we intend to use in EQUAL
 
  d.
‘EQUAL in adults’—a second Phase I study with adult healthy volunteers to compare the allergen uptake of cVP and 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 larger in size relative to the current patch and circular in shape.
 
1
9

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.
After careful review of the FDA’s information requests, 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 letter. The Company estimated that the FDA’s newly proposed stepwise 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, the Company announced its plan to initiate a pivotal Phase III 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). The 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 confirmed the Company’s change in strategy is agreeable via oral and written exchanges.
The new Phase 3 pivotal study for modified Viaskin Peanut has been named VITESSE (Viaskin Peanut Immunotherapy Trial to Evaluate Safety, Simplicity and Efficacy), which means “speed” in French.
In May 2022, the 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 as part of the the Type C meeting briefing package.
 
DBV continues to engage in productive dialogue with the FDA on the key elements of the VITESSE protocol. As previously disclosed, the Company will communicate key elements of the VITESSE trial design and projected timelines once this process has concluded.
Viaskin Peanut for children ages