phvs-ex993

Unaudited condensed consolidated statements of profit or loss and other comprehensive income

			Three months ended September 30						Nine months ended September 30
			2021			2020			2021			2020
	Notes		€			€			€			€
Research and development expenses		3		(8,956,174	)		(5,062,742	)		(25,088,223	)		(11,797,986	)
General and administrative expenses		4		(4,374,081	)		(1,210,757	)		(12,810,500	)		(3,447,208	)
Total operating expenses				(13,330,255	)		(6,273,499	)		(37,898,723	)		(15,245,194	)

Net foreign exchange income/(loss)		6		4,254,526			(126,338	)		7,598,899			(176,602	)
Loss before income tax				(9,075,729	)		(6,399,837	)		(30,299,824	)		(15,421,796	)

Income taxes		7		(68,190	)		—			(89,744	)		—
Loss for the period				(9,143,919	)		(6,399,837	)		(30,389,568	)		(15,421,796	)

Other comprehensive income/(Loss)
Exchange gains arising on translation of foreign operations				1,245			—			2,920			—

Total comprehensive loss attributable to:
Equity holders of the Company				(9,142,674	)		(6,399,837	)		(30,386,648	)		(15,421,796	)

Loss per share attributable to the equity holders of the Company during the periods
Basic and diluted loss per share:	19			(0.39	)		(1.32	)		(1.31	)		(3.18	)

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

			September 30, 2021			December 31, 2020
	Notes		€			€
Assets
Non-current assets
Property, plant and equipment		8		97,829			48,503
Right of use assets		9		262,549			—
Current assets
Deferred tax assets		7		117,138			99,339
Receivables		10		632,367			569,578
Other current assets		11		3,385,574			1,753,327
Cash and cash equivalents		12		218,595,778			98,628,871
Total assets				223,091,235			101,099,618

Equity and liabilities
Equity
Share capital		13		3,975,432			235,693
Share premium				278,435,529			138,034,580
Other reserves				8,095,502			1,979,875
Currency translation reserve				(1,445	)		(4,365	)
Accumulated loss				(75,078,406	)		(44,459,954	)
Total equity				215,426,612			95,785,829

Long term liabilities
Non-current lease liability	9			171,466			—
Current liabilities
Trade and other payables		14		3,846,476			846,952
Accrued liabilities		15		3,646,681			4,466,837
Total liabilities				7,664,623			5,313,789
Total equity and liabilities				223,091,235			101,099,618

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

			Share capital		Share premium			Other reserves			Currency translation reserve			Accumulated losses			Total Equity
	Notes		€		€			€			€			€			€
Balance at January 1, 2020				130,962		36,624,697			392,139			—			(18,474,250	)		18,673,548
Loss for the period				—		—			—			—			(15,421,796	)		(15,421,796	)
Increase in par value				—		—			—			—			—			—
Issue of share capital		13		46,468		34,986,290			—			—			—			35,032,758
Transaction costs on issue of shares				—		(786,477	)		—			—			—			(786,477	)
Currency translation reserve				—		—			—			361			141,304			141,665
Shares issued upon exercise of options	18			—		—			—			—			—			—
Share-based payments		18		—		—			1,050,424			—			—			1,050,424
Balance at September 30, 2020				177,430		70,824,510			1,442,563			361			(33,754,742	)		38,690,122
Balance at January 1, 2021				235,693		138,034,580			1,979,875			(4,365	)		(44,459,954	)		95,785,829
Loss for the period				—		—			—			—			(30,386,648	)		(30,386,648	)
Increase in par value				2,592,621		(2,592,621	)		—			—			—			—
Issue of share capital		13		1,141,329		156,014,570			—			—			—			157,155,899
Transaction costs on issue of shares				—		(13,154,360	)		—			—			—			(13,154,360	)
Currency translation reserve				—		—			—			2,920			—			2,920
Shares issued upon exercise of options or RSU's	18			5,789		133,360			(91,681	)		—			(231,803	)		(184,335	)
Share-based payments		18		—		—			6,207,308			—			—			6,207,308
Balance at September 30, 2021				3,975,432		278,435,529			8,095,502			(1,445	)		(75,078,405	)		215,426,613

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

			2021			2020
	Notes		€			€
Operating activities
Loss before tax				(30,299,824	)		(15,421,796	)
Non-cash adjustments to reconcile loss before tax to net cash flows from operations:
Share-based payment expense		18		6,207,308			1,050,424
Depreciation expense	4			44,003			4,818
Net foreign exchange (gain)/loss	6			(7,837,250	)		141,665
Finance costs		6		238,351			—

Changes in working capital:
Decrease/(Increase) in receivables				(62,789	)		(803,630	)
Increase in other current assets				(3,067,974	)		—
Increase in trade and other payables				2,723,748			2,301,823
Increase in accrued liabilities				163,657			138,176
Paid interest				(177,640	)		—
Taxes paid				(28,157	)		—
Net cash flows used in operating activities				(32,096,567	)		(12,588,520	)

Investing activities
Purchase of property, plant and equipment		8		(61,494	)		(35,657	)
Net cash flows used in investing activities				(61,494	)		(35,657	)

Financing activities
Proceeds from issue of shares		13		157,236,819			35,032,758
Transaction costs on issue of shares				(12,925,547	)		(786,477	)
Payment of lease liabilities				(20,575	)		—
Net cash flows provided by financing activities				144,290,697			34,246,281

Net increase (decrease) in cash and cash equivalents				112,132,636			21,622,104
Cash and cash equivalents at the beginning of the period				98,628,871			20,326,372
Effect of exchange rate changes				7,834,271			—
Cash and cash equivalents at the end of the period		12		218,595,778			41,948,476

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements

This section provides general corporate and group information about Pharvaris N.V. (formerly Pharvaris B.V.) and its subsidiaries.

Pharvaris N.V. was incorporated on September 30, 2015 and is based in Leiden, the Netherlands.

The address of its registered office is J.H. Oortweg 21, Leiden. It has been registered at the Chamber of Commerce under file number 64239411.

The unaudited condensed consolidated interim financial statements of Pharvaris N.V. (the “Company” or “Pharvaris”) and its subsidiaries (collectively, “The Group”) as at September 30, 2021 and December 31, 2020, and for the three and nine months ended September 30, 2021 and 2020 were authorised for issue in accordance with a resolution of the directors on November 10, 2021.

The unaudited condensed consolidated interim financial statements of the Group include:

The ultimate parent company of the Group is Pharvaris N.V., which is based in the Netherlands.

On July 10, 2021, the Company presented clinical data supporting the multiple-dose safety and pharmacokinetic (PK) profile of PHA121 (PHA-022121) for the treatment of hereditary angioedema (HAE) at the European Academy of Allergy and Clinical Immunology (EAACI) Annual Congress 2021.

With Dr. Souverijns joining as Chief Community Engagement and Commercial Officer to engage with patient advocacy groups, clinicians, and payers, per July 1, 2021, the Company further strengthened capabilities in Community Engagement and Commercialization, as well as CMC, Clinical, and organizational development.

On April 21, 2021, the Company announced that an Investigational new Drug (IND) was in effect in the US for prophylactic treatment of HAE using PHVS416. Patient recruitment has begun and the study is expanding to Canada, Europe, Israel, and the UK.

The unaudited condensed consolidated interim financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The 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 annual consolidated financial statements for the year ended December 31, 2020 (“last annual financial statements”). These unaudited condensed consolidated interim financial statements do not include all the information required for a complete set 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 an understanding of the changes in the Group’s financial position and performance since the last annual financial statements.

The unaudited condensed consolidated interim financial statements have been prepared on a historical cost basis. Unless otherwise stated, the unaudited condensed consolidated interim financial statements are presented in euros and all values are rounded to the nearest EUR (€), except per share amounts.

Pharvaris is a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for rare diseases with significant unmet need, initially focused on angioedema and other bradykinin-mediated diseases. These therapies will need to go through clinical development trials to achieve regulatory approval for commercialization. Therefore, Pharvaris is incurring annual research and development and other operating costs and has no revenues to date (as is typical in the biotech industry for development stage and early commercial stage companies). As such, Pharvaris anticipates on-going negative operating cash flows for several years before the company has a product candidate ready for commercialization, if proven successful. This makes the Group dependent on external capital sources, debt capital and equity capital. The Group is currently fully financed by equity capital.

As of September 30, 2021 and December 31, 2020 the Group had cash of €218.6 million and €98.6 million, respectively. The Group incurred net losses of €30.4 million in the nine months ended September 30, 2021 and €15.4 million in the same period in 2020 and negative operating cash flows of €32.1 million and €12.6 million in the nine months ended September 30, 2021 and the nine months ended September 30, 2020 respectively.

The Group does not expect positive operating cash flows in the foreseeable future and remains dependent on additional financings to fund its research and development expenses, general and administrative expenses and financing costs. However, the Group believes that the available cash balances are sufficient to execute the Group’s operating plan and strategies and to meet the anticipated working capital requirements and settle all expected liabilities for a period of at least twelve months after the signing date of these unaudited condensed consolidated interim financial statements. Accordingly, unaudited condensed consolidated interim financial statements have been prepared on a going concern basis.

The outbreak of a novel strain of the coronavirus, specifically identified as “COVID-19”, has spread globally. COVID-19 is a virus causing potentially deadly respiratory tract infections and has impacted the global economy. In March 2020, the World Health Organization declared COVID-19 a pandemic.

The Group has taken appropriate measures to protect the safety of the employees and continuously monitors and evaluates the situation regarding COVID-19. The COVID-19 outbreak has delayed, and may continue to delay, enrollment in our clinical trials. The Group previously experienced an approximate two-month delay in starting the enrollment of our now completed Phase 1 multiple ascending dose study of PHA121 in healthy volunteers as a result of COVID-19.

The spread of an infectious disease, including COVID-19, may also result in the inability of our suppliers to deliver components or raw materials, and the inability of our CDMOs to provide supplies of our product candidates for our planned clinical trials, on a timely basis or at all. Further, it may impact the ability of our CROs, including non-clinical CROs, to provide services to support our clinical program. The extent to which the COVID-19 pandemic impacts our business will depend on future developments, which are uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 pandemic and the actions to contain COVID-19 or treat its impact, among others. If we are unable to meet our milestones it might jeopardize our funding opportunities.

In addition, the COVID-19 pandemic has already caused, and is likely to result in further, significant disruptions and uncertainties in global financial markets, which may reduce our ability to access capital on favorable terms or at all. A recession, depression or other sustained adverse market event resulting from the spread of COVID-19 could also materially and adversely affect our business and the value of our ordinary shares.

The Group continuously monitors the situation regarding COVID-19, and the possible impact on the CROs, contract manufacturing organizations and clinical sites performing research and development activities for the Group. All efforts are made to develop alternatives to limit the impact of COVID-19 going forward.

The ultimate impact of the COVID-19 pandemic is uncertain and subject to change. Management does not expect that COVID-19 will have a material adverse effect on the financial condition or liquidity of the Company.

In preparing these unaudited condensed consolidated interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements, except for the share options granted, refer to note 18.

The accounting policies applied in these unaudited condensed consolidated interim financial statements are the same as those applied in the consolidated financial statements for the year ended December 31, 2020, except for:

Lease policies and disclosure are related to leases entered into in the second quarter of 2021.

All leases are accounted for by recognizing a right-of-use asset and a lease liability except for:

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the Group’s incremental borrowing rate on commencement of the lease used.

On initial recognition, the carrying value of the lease liability also includes:

Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease.

When the Group revises its estimate of the term of any lease, it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted using a revised discount rate.

	For the three months ended September 30						For the nine months ended September 30
	2021			2020			2021			2020
	€			€			€			€
Personnel expenses (Note 5)		(2,382,973	)		(771,396	)		(6,151,138	)		(1,677,630	)
Clinical expenses		(4,568,346	)		(2,595,990	)		(11,330,269	)		(5,293,514	)
Non-clinical expenses		(924,636	)		(921,159	)		(3,068,349	)		(2,065,658	)
Manufacturing costs		(1,052,191	)		(717,371	)		(3,972,363	)		(2,624,638	)
License costs		—			—			(500,000	)		—
Intellectual Property costs		(28,028	)		(56,826	)		(66,104	)		(136,546	)
		(8,956,174	)		(5,062,742	)		(25,088,223	)		(11,797,986	)

Development expenses are currently not capitalized but are recorded in the unaudited condensed consolidated statements of profit or loss and other comprehensive income because the recognition criteria for capitalization are not met.

Clinical expenses include costs of conducting and managing our sponsored clinical trials, including clinical investigator cost, costs of clinical sites, and costs for CRO’s assisting with our clinical development programs.

Non-clinical expenses include costs of our outsourced discovery, medicinal chemistry, preclinical and nonclinical development studies.

Manufacturing expenses include costs related to manufacturing of active pharmaceutical ingredients and manufacturing of the products used in our clinical trials and research and development activities.

License costs consist of a milestone payment of €500,000 which was paid to AnalytiCon upon commencement of Phase 2 development.

	For the three months ended September 30						For the nine months ended September 30
	2021			2020			2021			2020
	€			€			€			€
Personnel expenses (Note 5)		(1,982,190	)		(96,717	)		(5,018,977	)		(708,645	)
Consulting fees		(207,461	)		(254,215	)		(598,337	)		(732,915	)
Professional fees		(349,575	)		(277,615	)		(1,482,281	)		(656,798	)
Accounting, tax and auditing fees		(230,113	)		(375,096	)		(1,316,869	)		(778,696	)
Facilities, communication & office expenses		(1,550,713	)		(185,177	)		(4,012,860	)		(419,879	)
Travel expenses		(6,760	)		(3,117	)		(10,117	)		(25,161	)
Other expenses		(47,269	)		(18,820	)		(371,059	)		(125,114	)
		(4,374,081	)		(1,210,757	)		(12,810,500	)		(3,447,208	)

In 2021 the Group entered into a number of lease arrangements, which were assessed to be short-term leases (with a lease term of 12 months equaling its non-cancellable period). The total outflow for the leases in the first nine months of 2021 was €153,859 (2020: €91,466) and is included in the Facilities, communication & office expenses line. The total outflow for the leases in the third quarter of 2021 amounts to €55,294 (2020: €25,059).

Depreciation expense of €44,003 (2020: €4,818) related to property, plant and equipment and leases and is included in the other expenses line for the nine months ended September 30, 2021. For the third quarter of 2021 a total of €28,955 (2020: €2,155) depreciation charge was included in Other expenses.

	For the three months ended September 30						For the nine months ended September 30
	2021			2020			2021			2020
	€			€			€			€
Wages and salaries		(1,671,507	)		(437,882	)		(4,290,152	)		(1,190,877	)
Pension charges		(94,587	)		(16,712	)		(175,876	)		(46,246	)
Other social security charges		(261,109	)		(23,227	)		(496,779	)		(98,728	)
Share-based payments		(2,337,960	)		(390,292	)		(6,207,308	)		(1,050,424	)
		(4,365,163	)		(868,113	)

Unaudited condensed consolidated statements of profit or loss and other comprehensive income	3

Unaudited condensed consolidated statements of financial position	4

Unaudited condensed consolidated statements of changes in equity	5

Unaudited condensed consolidated statements of cash flows	6

Notes to the unaudited condensed consolidated interim financial statements	7

		Country of	% of equity interest as September 30,
Name	Legal seat	incorporation	2021	2020
Pharvaris Holdings B.V.	Leiden	The Netherlands	100%	100%
Pharvaris Netherlands B.V.	Leiden	The Netherlands	100%	100%
Pharvaris GmbH	Zug	Switzerland	100%	100%
Pharvaris, Inc.	Delaware	United States of America	100%	100%